Supply chain clause: Copy, customize, and use instantly
Introduction
A supply chain clause sets expectations and responsibilities for managing the supply chain associated with the goods or services provided under the agreement. This clause ensures that both parties maintain transparency and responsibility in their supply chain operations, including ethical sourcing, sustainability, and compliance with relevant regulations.
Below are templates for supply chain clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard supply chain clause
This version includes general provisions for managing the supply chain.
[Party B] agrees to manage its supply chain in a manner that ensures the ethical sourcing of materials, the protection of human rights, and compliance with all applicable laws and regulations. [Party B] will provide [Party A] with details of its supply chain upon request.
Supply chain clause with provision for third-party audits
This version includes third-party audits.
[Party A] reserves the right to conduct third-party audits of [Party B]’s supply chain to verify compliance with ethical sourcing standards, environmental regulations, and other applicable laws. [Party B] will cooperate with these audits and provide all necessary access and documentation.
Supply chain clause with provision for ethical sourcing
This version applies to ethical sourcing.
[Party B] agrees to source all materials and products used in the performance of this Agreement from suppliers that adhere to ethical standards, including fair labor practices, environmentally responsible sourcing, and the prohibition of child or forced labor.
Supply chain clause with provision for sustainability practices
This version applies to sustainability practices in the supply chain.
[Party B] will ensure that all suppliers in the supply chain follow sustainable practices, including reducing waste, conserving energy, and minimizing the environmental impact of production. [Party B] will provide [Party A] with evidence of sustainability efforts upon request.
Supply chain clause with provision for compliance with supply chain transparency regulations
This version applies to supply chain transparency.
[Party B] agrees to comply with all applicable supply chain transparency regulations, including providing information regarding the origin of materials, labor practices, and environmental impacts of the products or services supplied under this Agreement.
Supply chain clause with provision for continuous improvement
This version includes continuous improvement.
[Party B] will work to continuously improve the supply chain, identifying opportunities for reducing costs, improving efficiency, and minimizing environmental impact. [Party B] will regularly review its supply chain practices and implement necessary changes to align with best practices.
Supply chain clause with provision for supplier diversification
This version applies to supplier diversification.
[Party B] agrees to diversify its supply chain by sourcing materials and services from multiple suppliers. This will reduce dependence on any single supplier and ensure greater flexibility and resilience in the supply chain.
Supply chain clause with provision for compliance with international standards
This version applies to international standards.
[Party B] agrees to ensure that its supply chain complies with all relevant international standards, including those set by the World Trade Organization (WTO), the International Labour Organization (ILO), and other industry-specific regulatory bodies.
Supply chain clause with provision for conflict-free sourcing
This version applies to conflict-free sourcing.
[Party B] guarantees that all materials used in the production of goods or services under this Agreement are sourced from conflict-free regions and do not contribute to armed conflicts, human rights abuses, or exploitation.
Supply chain clause with provision for supplier certifications
This version requires supplier certifications.
[Party B] will ensure that all suppliers involved in the supply chain hold the necessary certifications for quality, safety, and ethical practices. These certifications may include ISO, Fair Trade, or other relevant standards. [Party B] will provide certification details to [Party A] upon request.
Supply chain clause with provision for traceability of goods
This version applies to goods traceability.
[Party B] agrees to implement systems that allow for the full traceability of goods and materials within the supply chain. [Party A] may request documentation on the traceability of any goods supplied under this Agreement.
Supply chain clause with provision for addressing human rights violations
This version applies to human rights violations.
[Party B] will ensure that all suppliers in its supply chain adhere to strict human rights standards. In the event of any human rights violations, [Party B] will take immediate corrective action and may suspend the use of the offending supplier.
Supply chain clause with provision for supplier performance evaluations
This version applies to supplier performance.
[Party B] will evaluate the performance of all suppliers at regular intervals to ensure they meet the agreed standards for quality, ethical practices, and compliance with environmental and labor regulations. [Party A] may request copies of these performance evaluations.
Supply chain clause with provision for risk management
This version includes risk management.
[Party B] will implement risk management procedures to identify, assess, and mitigate potential risks within its supply chain. These risks may include supply disruptions, compliance failures, or reputational risks related to supplier behavior.
Supply chain clause with provision for contingency plans
This version includes contingency planning.
[Party B] will develop and maintain contingency plans for its supply chain to address potential disruptions, including natural disasters, geopolitical issues, or supplier bankruptcies. These plans will ensure that [Party B] can continue to meet its obligations under this Agreement without significant delays.
Supply chain clause with provision for supplier code of conduct
This version applies to a supplier code of conduct.
[Party B] will ensure that all suppliers comply with [Party B]’s Supplier Code of Conduct, which outlines expectations for ethical behavior, environmental stewardship, and fair labor practices. [Party A] may request a copy of the Supplier Code of Conduct at any time.
Supply chain clause with provision for supply chain mapping
This version involves supply chain mapping.
[Party B] will create and maintain a map of its entire supply chain, from raw material sourcing to the delivery of final goods. This map will be updated regularly and made available to [Party A] for transparency and compliance verification.
Supply chain clause with provision for compliance with anti-corruption laws
This version applies to anti-corruption laws.
[Party B] agrees to ensure that all suppliers in the supply chain comply with anti-corruption laws, including the Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act. [Party B] will take appropriate action if any supplier is found in violation of these laws.
Supply chain clause with provision for environmental risk assessments
This version applies to environmental risk assessments.
[Party B] will conduct regular environmental risk assessments of its supply chain to identify potential environmental impacts. If any risks are identified, [Party B] will take corrective actions to minimize or eliminate the identified risks.
Supply chain clause with provision for third-party supply chain monitoring
This version involves third-party monitoring.
[Party A] may engage third-party organizations to monitor and audit [Party B]'s supply chain to ensure compliance with sustainability, ethical sourcing, and environmental standards. [Party B] agrees to cooperate with any third-party monitoring efforts.
Supply chain clause with provision for transparency in supplier relationships
This version applies to transparency in relationships.
[Party B] will maintain transparency in its relationships with all suppliers, ensuring that both parties are fully informed of any issues or changes within the supply chain. [Party A] may request regular updates on the status of key suppliers.
Supply chain clause with provision for traceability of ethical sourcing practices
This version applies to ethical sourcing traceability.
[Party B] will implement systems to track and document the ethical sourcing practices of its suppliers. This includes ensuring that suppliers adhere to fair labor practices, environmental sustainability, and responsible sourcing of raw materials.
Supply chain clause with provision for compliance with labor laws
This version applies to compliance with labor laws.
[Party B] will ensure that all suppliers comply with relevant labor laws and regulations, including the payment of fair wages, safe working conditions, and the prohibition of child labor. [Party A] reserves the right to inspect compliance records as necessary.
Supply chain clause with provision for diversification of sourcing strategies
This version applies to diversification strategies.
[Party B] will diversify its sourcing strategies to reduce the risk of supply chain disruptions. This includes sourcing materials from multiple suppliers, both domestic and international, to ensure that [Party A] can continue to meet its obligations under this Agreement.
Supply chain clause with provision for continuous supply chain monitoring
This version includes continuous monitoring.
[Party B] agrees to continuously monitor the performance and compliance of its supply chain. [Party B] will take corrective actions when issues arise, ensuring that the supply chain remains efficient, ethical, and compliant with all relevant regulations.
Supply chain clause with provision for risk assessment of suppliers
This version applies to supplier risk assessments.
[Party B] will assess the potential risks posed by its suppliers, including financial stability, environmental impact, and regulatory compliance. [Party B] will take appropriate actions to mitigate any identified risks to ensure a reliable and sustainable supply chain.
Supply chain clause with provision for supply chain resilience planning
This version focuses on supply chain resilience.
[Party B] will develop and implement a resilience plan for its supply chain, addressing potential disruptions caused by economic, environmental, or geopolitical factors. This plan will be reviewed regularly to ensure it aligns with changing circumstances.
Supply chain clause with provision for ethical supply chain sourcing
This version applies to ethical sourcing.
[Party B] commits to sourcing all materials and goods in an ethical manner, ensuring that suppliers uphold human rights, fair wages, and environmental sustainability. [Party A] may request documentation proving that these standards are being met.
Supply chain clause with provision for compliance with export regulations
This version applies to export regulations.
[Party B] agrees to comply with all relevant export regulations, including those related to the import and export of goods within and outside of [relevant jurisdiction]. Any changes in export laws will be promptly communicated to [Party A], and adjustments to the supply chain will be made accordingly.
Supply chain clause with provision for tracking supply chain emissions
This version applies to tracking emissions.
[Party B] will track the carbon emissions generated by its supply chain and work toward reducing its carbon footprint. [Party A] may request periodic reports on the emissions from [Party B]’s supply chain and any actions taken to reduce them.
Supply chain clause with provision for conflict mineral sourcing
This version applies to conflict minerals.
[Party B] will ensure that all minerals used in its products are sourced from conflict-free regions, in compliance with international standards. [Party B] will provide [Party A] with reports confirming that conflict minerals are not used in any goods supplied under this Agreement.
Supply chain clause with provision for supplier diversity
This version applies to supplier diversity.
[Party B] will actively seek to diversify its supplier base by engaging with minority-owned, women-owned, and other underrepresented businesses. This diversity will be a key consideration in the sourcing decisions made under this Agreement.
Supply chain clause with provision for proactive supply chain innovation
This version includes proactive innovation.
[Party B] agrees to explore innovative methods to enhance the efficiency, sustainability, and cost-effectiveness of its supply chain. [Party A] encourages [Party B] to implement new technologies and strategies that improve supply chain operations and reduce environmental impact.
Supply chain clause with provision for data sharing in the supply chain
This version applies to data sharing.
[Party B] will share necessary supply chain data with [Party A], including information about the sourcing, production, and transportation of goods. This will allow [Party A] to evaluate the efficiency and sustainability of the supply chain and ensure compliance with agreed standards.
Supply chain clause with provision for maintaining supply chain transparency
This version applies to transparency.
[Party B] will maintain transparency in its supply chain by providing [Party A] with full visibility into the operations, processes, and practices of all suppliers. [Party A] reserves the right to verify this transparency through audits or inspections.
Supply chain clause with provision for maintaining confidentiality of supply chain data
This version applies to confidentiality.
[Party B] agrees to maintain the confidentiality of any sensitive supply chain data shared by [Party A]. This data will be used solely for the purpose of ensuring compliance with the terms of this Agreement and will not be disclosed to third parties without prior consent.
Supply chain clause with provision for monitoring compliance with local labor laws
This version applies to labor law compliance.
[Party B] will monitor its supply chain to ensure that all suppliers comply with local labor laws, including fair wages, non-discrimination policies, and safe working conditions. [Party A] reserves the right to request records that demonstrate compliance with these laws.
Supply chain clause with provision for implementing supply chain best practices
This version applies to best practices.
[Party B] will implement industry-recognized best practices in its supply chain, including those related to sourcing, production, quality control, and logistics. [Party A] may request a summary of the best practices used and evaluate their effectiveness.
Supply chain clause with provision for dispute resolution with suppliers
This version applies to dispute resolution.
[Party B] will establish clear processes for resolving disputes with suppliers, including mediation or arbitration if necessary. [Party A] will be notified of any disputes that may affect the performance of this Agreement, and [Party B] will take action to resolve them swiftly.
Supply chain clause with provision for ensuring compliance with anti-slavery laws
This version applies to anti-slavery laws.
[Party B] will ensure that all suppliers in its supply chain comply with anti-slavery and human trafficking laws. [Party B] will provide [Party A] with written assurance that no forced or child labor is used within the supply chain.
Supply chain clause with provision for implementing a supply chain code of conduct
This version applies to a code of conduct.
[Party B] agrees to implement a supply chain code of conduct that outlines expectations for suppliers, including compliance with ethical, environmental, and labor standards. [Party B] will ensure that all suppliers sign and adhere to this code.
Supply chain clause with provision for supplier termination due to non-compliance
This version applies to non-compliance.
If a supplier fails to meet the sustainability, ethical, or regulatory standards outlined in this Agreement, [Party B] will terminate the relationship with the supplier and find a suitable replacement. [Party B] will notify [Party A] of the termination and the reasons behind it.
Supply chain clause with provision for tracking and reducing waste in the supply chain
This version applies to waste reduction.
[Party B] will track waste generated at every stage of the supply chain and implement strategies to reduce waste, such as reusing materials or recycling products. [Party A] may request a report on waste reduction efforts and results.
Supply chain clause with provision for ensuring product safety across the supply chain
This version applies to product safety.
[Party B] will ensure that all products delivered under this Agreement meet applicable safety standards, including those related to manufacturing processes and materials. [Party A] reserves the right to inspect the supply chain to verify product safety compliance.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.