A product supply agreement is an agreement in which a supplier sells products to a business, and specifies the terms for the transactions, including the price, timing, quantities, delivery, shipping, payment terms, exclusivity, return of defective or nonconforming goods, and return of unsold goods. A supplier may be a distributor, wholesaler, dealer, or merchant.

In Tennessee, a product supply agreement is a legally binding contract between a supplier and a business that outlines the terms and conditions of the sale and purchase of products. The agreement typically includes details on pricing, delivery schedules, quantities, shipping and handling, payment terms, and other transactional specifics. It may also cover exclusivity arrangements, which would restrict the business from purchasing similar products from other suppliers. Additionally, the agreement should address the protocol for handling defective or nonconforming goods, including returns and replacements, as well as the return of unsold goods. These agreements are subject to general contract laws in Tennessee, and both parties must adhere to the agreed-upon terms. Failure to comply with the terms of a product supply agreement can result in legal disputes, which may be resolved through negotiation, mediation, arbitration, or court proceedings. It is advisable for businesses to consult with an attorney to ensure that their product supply agreements are in compliance with applicable state statutes and federal laws, and to safeguard their interests in these commercial transactions.