By framework agreement we mean a set of rules organizing long-term commercial cooperation between a supplier and a buyer.
Brief description
Master agreements have the advantage that buyers, on the one hand, get better terms, and suppliers, on the other hand, can bond with their customers. The main purpose of these contracts is to reduce costs and the amount of time spent on procurement, with the understanding that a contract with baseline parameters is already in place.
In this way, for example, the price, delivery terms as well as the place of delivery can be set in the contract, and the corresponding quantity is then included in a specific order. Quantities and time frames for collection can also be included in the framework agreement. The agreed quantity will be made available over a period of time and in appropriate batches.
The framework agreement should include all the basic aspects of cooperation, but leave enough room for individual cases.
