Reviewing Vendor Contracts: Protecting Your Small Business

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Staring at a vendor contract and wondering what you're really signing up for? You're not alone. Let's break down vendor contract review in a way that makes sense—no law degree required.

Why Vendor Contracts Matter

Your Business Safety Net

  • • Defines what you get and when
  • • Protects your cash flow
  • • Prevents operational disruptions
  • • Sets clear responsibilities

"Imagine counting on a shipment for your holiday collection, but it arrives late—or not at all. Without clear contract terms, you're left holding the bag."

Real-World Example: The Furniture Maker's Story

Meet Our Example Business:

The Business

Small furniture manufacturing company

The Contract

Lumber supply agreement for cedar and oak

Key Clauses to Watch

1. Delivery Terms

What to Check:

✓ Exact delivery dates or timeframes

✓ Penalties for delays

✓ Shipping cost responsibility

Pro Tip:

Add a "time is of the essence" clause to emphasize delivery timing importance

2. Payment Schedules

What to Check:

✓ Payment due dates

✓ Accepted payment methods

✓ Late payment penalties

Pro Tip:

Request net-30 terms for better cash flow management

3. Liability

What to Check:

✓ Indemnification terms

✓ Product/service warranties

✓ Liability limits

Pro Tip:

Push for a 90-day warranty and reasonable liability caps

Protect Your Business Today

Don't let unclear vendor contracts put your business at risk. Get a free risk assessment with OpenAmend and review your contracts with confidence.