What is a Term Contract?

A Term Contract is a long-term agreement between a buyer and supplier to provide goods or services at pre-agreed prices over a specified period (e.g., 6 months, 1 year, or longer).

For Buyers

A Term Contract allows you to:

• Lock in pricing — Secure stable prices for frequently purchased items, protecting against market fluctuations
• Streamline procurement — Place orders directly against the contract without running a new RFQ each time
• Reduce administrative overhead — Minimize repetitive sourcing for recurring needs
• Ensure supply availability — Guarantee access to critical items from a committed supplier

For Suppliers

A Term Contract provides you with:

• Predictable revenue — Secure a steady stream of orders over the contract duration
• Simplified sales process — Receive orders directly without competing in new RFQs for each purchase
• Stronger buyer relationships — Build long-term partnerships with committed customers
• Better planning — Forecast demand and manage inventory more effectively

Things to Note for Suppliers

When participating in a Term Contract RFQ, keep these considerations in mind:

• Price commitment — Your quoted prices are locked for the contract duration. Factor in potential cost increases before submitting.
• Quantities are estimates — Actual order volumes may vary. Do not assume guaranteed minimums unless explicitly stated.
• Capacity and delivery — Ensure you can consistently fulfill orders on short notice throughout the contract period.