Can this agreement be signed electronically?

Yes. Electronic signatures are generally binding under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states if the parties show intent, consent, attribution, and retention capability.

Are there exceptions to e-signability?

Some categories are excluded, such as wills, certain court orders, and a few notices. Check state law and the agreement's subject matter before relying solely on e-signature.

Do I need a notary or witnesses?

Most Business Material Agreements do not require notarization or witnesses. If a particular state or transaction requires notarization, use remote online notarization procedures that meet state RON rules.

How do I correct a signed agreement?

Execute an amendment signed by authorized parties or reissue a corrected agreement and obtain fresh signatures. Use version control and retain both the superseded and amended copies.

How long must we retain executed copies?

Follow record-retention rules: federal tax records at least 3 years (IRC §6501(a)), HIPAA-related documents 6 years (45 CFR §164.530(j)), and any longer state or industry requirements.

What about protected health information?

If materials include PHI, implement HIPAA safeguards and execute a Business Associate Agreement (BAA) where required to ensure compliance with privacy and security obligations.

Electronic Signature
Templates
Miscellaneous
Business Material Agreement

Business Material Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

BUSINESS MATERIAL AGREEMENT

Parties

Supplier (Provider of Materials) Supplier Address Client (Recipient of Materials) Client Address

Recitals

WHEREAS, Supplier has developed, owns, or lawfully controls certain tangible and intangible materials, documentation, samples and related information described as "" (Materials); and

WHEREAS, Client desires to obtain and Supplier agrees to provide the Materials for Client's business use, subject to the terms and conditions set forth in this Agreement, effective as of .

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows.

Scope of Work

Supplier will deliver, and Client will accept, the Materials and any agreed deliverables in accordance with the schedule, specifications and acceptance criteria described below.

Detailed Scope of Work

Payment Terms

Client shall pay Supplier as compensation for the Materials and services in the amounts and according to the schedule set forth below. All fees are payable in United States dollars unless otherwise agreed in writing.

Total Contract Amount Payment Schedule / Milestones Late Payment Fee

Unless otherwise stated, payments are due within days of invoice. Client shall be responsible for any collection costs and interest on past-due amounts at the rate set forth above.

Term and Termination

This Agreement shall commence on the Start Date and continue until the End Date, unless earlier terminated pursuant to this section.

Start Date End Date Termination Notice Period (Days)

Either party may terminate for material breach if the breaching party fails to cure such breach within the notice period provided above. Termination shall not relieve either party of obligations accrued prior to the effective date of termination.

Confidentiality

Each party acknowledges that in connection with this Agreement it may receive Confidential Information of the other party. "Confidential Information" means non-public information that a reasonable person would deem confidential. Confidential Information does not include information that is (a) publicly known through no wrongful act of the receiving party; (b) rightfully received from a third party without breach of any obligation of confidentiality; or (c) independently developed by the receiving party without use of the disclosing party's Confidential Information.

The receiving party shall: (i) use Confidential Information solely to perform its obligations under this Agreement; (ii) protect Confidential Information with at least the same degree of care it uses to protect its own confidential information, but no less than reasonable care; and (iii) not disclose Confidential Information to third parties except as required by law or to employees and contractors with a need to know who are bound by confidentiality obligations no less restrictive than those herein.

Intellectual Property; Materials

Unless expressly agreed in writing, Supplier retains all right, title and interest in and to the Materials, including all intellectual property rights. Supplier grants Client a non-exclusive, non-transferable license to use the Materials solely for Client's internal business purposes as specified in the Scope of Work. Any use beyond that license requires prior written authorization and may be subject to additional fees.

Representations, Warranties and Indemnification

Each party represents and warrants that it has the full right and authority to enter into this Agreement. Supplier warrants that, to the best of its knowledge, the Materials will not infringe third party intellectual property rights. Supplier's sole obligation and Client's exclusive remedy for breach of this warranty shall be, at Supplier's option, to replace or modify the Materials to avoid infringement or to terminate this Agreement and refund any prepaid, unused fees.

Each party shall indemnify and hold harmless the other party from and against any liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising from third party claims attributable to the indemnifying party's breach of this Agreement, willful misconduct, or gross negligence.

Limitation of Liability

Except for liability arising from breach of confidentiality, willful misconduct, or indemnification obligations, neither party shall be liable for consequential, incidental, special or punitive damages. The aggregate liability of either party for any claim arising under this Agreement shall not exceed the total amounts actually paid by Client to Supplier under this Agreement in the twelve (12) months preceding the event giving rise to the claim.

Governing Law and Dispute Resolution

Governing Law Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified above without regard to its conflict of law principles. The parties shall attempt to resolve disputes in good faith through negotiation prior to initiating any formal proceedings.

Entire Agreement; Amendment

This Agreement, including any exhibits and attachments executed contemporaneously herewith, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements, whether written or oral. No amendment or modification of this Agreement will be binding unless in writing and signed by authorized representatives of both parties.

Miscellaneous Provisions

Assignment: Neither party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party, except that either party may assign to an affiliate or to a successor in connection with a merger or sale of substantially all of its assets.

Notices: All notices required or permitted under this Agreement shall be in writing and delivered to the addresses provided above or to such other address as a party may designate in writing pursuant to this section.

Supplier Name:

By:

Date:

Client Name:

By:

Date:

What a Business Material Agreement Is and when it's used

A Business Material Agreement documents the transfer, licensing, or limited use of physical or intellectual materials between organizations. It identifies the parties, describes the materials, sets permitted uses and restrictions, allocates ownership and liability, and establishes confidentiality and return or destruction obligations. These agreements are commonly used when one company provides prototypes, samples, technical documentation, source materials, or proprietary inputs to another party for evaluation, manufacturing, testing, or integration.

Why a clear Business Material Agreement matters

A concise agreement reduces ambiguity about ownership, permitted uses, risk allocation, and return obligations. Clear terms limit disputes, support compliance with trade-secret and IP rules, and document responsibilities for handling confidential or regulated materials under applicable law.

Who typically prepares and signs this agreement

The agreement is usually prepared by the supplying party and reviewed by legal or procurement teams before signature.

Procurement Managers who control incoming materials and ensure compliance with supplier requirements.
Product Managers who need evaluation samples and must document permitted uses and return timelines.
Legal Counsel who review IP assignment, confidentiality, and liability clauses prior to execution.

Final signers are designated executives, contract administrators, or authorized agents with authority to bind their organizations.

Primary signers and their roles

Procurement Manager

Oversees receipt and inventory of materials, confirms delivery terms, and enforces return and disposition obligations. Often coordinates with operations to verify condition and acceptance criteria before final sign-off.

General Counsel

Reviews IP, confidentiality, indemnity, and governing-law clauses; ensures the agreement preserves trade-secret protection and limits corporate exposure to liability or unexpected assignment of rights.

Core sections every Professional Business Material Agreement should include

A well-drafted agreement balances description, usage limits, ownership, confidentiality, duration, and remedies so parties understand expectations and risk allocation.

Parties

Full legal names and entity types for each party, with a named primary contact and business address for notices.

Materials Description

Detailed list or reference exhibit describing materials, sample identifiers, quantities, and condition at delivery to avoid future disputes.

Permitted Uses

Specific allowed activities (testing, evaluation, manufacturing) and explicit prohibitions (resale, modification) including territorial limits if needed.

Ownership & IP

Statement confirming ownership of provided materials and any IP licenses granted, plus treatment of derivative works or improvements.

Confidentiality

Duration and scope of confidentiality obligations, handling requirements, and permitted disclosures to employees or subcontractors.

Return / Disposal

Timing and condition for return or certified destruction, who bears shipping costs, and steps for post-termination verification.

Quick step-by-step: complete a Business Material Agreement

Follow these four essential steps to prepare, review, execute, and retain the agreement with minimal rework.

01

Gather Information: Collect party names, material details, and delivery terms before drafting.
02

Draft Terms: Define permitted use, return schedule, confidentiality, and liability provisions.
03

Review & Approve: Have legal and operations verify terms and acceptance criteria.
04

Execute and Store: Obtain authorized signatures, notarize if required, and archive the final agreement.

Where to send, file, or submit the completed agreement

Decide routing based on internal controls: legal review, procurement filing, and operational receipt should each have a destination for the executed agreement.

Upload Repository: Place the signed PDF in your contract management system or secure cloud folder.
Email Copies: Distribute execution copies to signers, legal, procurement, and the receiving operations team.
File with Counsel: Provide legal counsel a copy for claims handling and IP tracking purposes.
Maintain Originals: Retain the executed original or certified e-copy as the official record of the transaction.

Digital workflow settings to use when sending the agreement

Configure these fields to reduce signer friction and preserve an auditable record during electronic execution.

Field	Configuration
Signer Order	Sequential or parallel routing depending on approval needs.
Authentication	Email link by default; add SMS code or KBA for stronger identity.
Reminder Schedule	Set automatic reminders at configurable intervals until signed.
Storage Location	Save completed documents in the designated contract repository.

Platform and file requirements for e-signing and storage

Confirm the e-signature provider supports required integrations, authentication, and file formats before routing the agreement.

Integrations: Salesforce, NetSuite, Google Workspace, Microsoft 365 supported.
File Formats: Use PDF or DOCX for best compatibility and archival integrity.
Security: TLS in transit and AES-256 at rest are recommended.

Typical deadlines and timing expectations

Set clear deadlines for delivery, review, return, and dispute periods to avoid misunderstandings and to trigger retention timelines.

Effective Date:

Date when obligations begin; use MM/DD/YYYY format.

Material Delivery:

Specify delivery date or lead time for shipped items.

Review Period:

State how long recipient has to inspect materials, e.g., 10 business days.

Return Deadline:

Set the return or destruction deadline, often 30–90 days post-evaluation.

Dispute Notice:

Require prompt written notice of defects or nonconformity within a stated period.

Key milestones from draft to archive

Track these sequential stages so the agreement moves cleanly from draft to enforceable record and archival storage.

01

Draft Preparation

Compose terms and exhibits describing materials and obligations.

02

Internal Review

Legal and operations confirm risk allocation and acceptance criteria.

03

Execution

Collect authorized signatures and any notarizations required.

04

Archival

Store executed copy in secure contract management and record retention system.

Common mistakes to avoid when preparing the agreement

Using vague material descriptions that lead to disputes over what was provided or returned.
Failing to specify permitted uses, resulting in implicit broad licenses or unauthorized commercial use.
Omitting return or destruction procedures, which creates uncertainty and storage liability.
Not aligning signature authority with corporate bylaws, producing an agreement that can be contested.

Potential legal and operational consequences of a flawed agreement

Contract Void Risk: Enforceability challenges

IP Loss: Unintended rights transfer

Regulatory Exposure: HIPAA or export control penalties

Tax Withholding: Backup withholding errors

Increased Costs: Legal fees and remediation

Reputational Harm: Partner or customer distrust

How a Business Material Agreement differs from an NDA

Compare core purposes and obligations so you can choose the right document or combine provisions appropriately.

Document Type	Business Material Agreement	NDA
Primary Purpose	transfer/usage terms	confidentiality only
Materials Covered	physical and ip	usually information/records
Return Obligations		rarely
IP Assignment	often addressed	typically not addressed

Common eSignature vendor pricing and capability snapshot

Compare starting prices and key capabilities for typical eSignature providers. signNow is shown first per comparison conventions.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	Yes, 7-day trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes (available)	Yes	Yes	Yes	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Real-world examples and practical outcomes

These condensed examples show how organizations apply material agreements to control risk and speed transactions.

Optica Ventures (COO)

The team used a clear materials agreement to standardize evaluations and limit use to testing only.

This reduced ambiguity in supplier handoffs.
As a result, return cycles shortened and litigation risk decreased because ownership and permitted use were documented up front, improving operational throughput.

Martin Properties (Founder)

A property-management firm required material exhibits for vendor work and logged chain of custody.

The exhibit schedule clarified deliverables.
That clarity prevented disputes over missing components, streamlined payment approvals, and supported faster closeout of projects while preserving documentation for audits.

Practical tips for accurate and efficient completion

Adopt consistent naming, version control, and signatory verification to reduce rework and preserve enforceability.

Use precise descriptions

Avoid generic terms; include serial numbers, quantities, and condition to eliminate ambiguity regarding supplied items.

Align signer authority

Confirm the signer has corporate authority and include title and date to prevent challenges to validity.

Record chain of custody

Document transfers, receipts, and inspections; attach delivery receipts or packing lists as exhibits.

Control confidentiality

Limit disclosure to necessary personnel and require subcontractors follow the same security and return obligations.

Frequently asked questions and practical answers

Answers to common legal and operational questions about execution, e-signature, notarization, and retention for Business Material Agreements.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures are generally binding under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states if the parties show intent, consent, attribution, and retention capability.
Are there exceptions to e-signability?
Some categories are excluded, such as wills, certain court orders, and a few notices. Check state law and the agreement's subject matter before relying solely on e-signature.
Do I need a notary or witnesses?
Most Business Material Agreements do not require notarization or witnesses. If a particular state or transaction requires notarization, use remote online notarization procedures that meet state RON rules.
How do I correct a signed agreement?
Execute an amendment signed by authorized parties or reissue a corrected agreement and obtain fresh signatures. Use version control and retain both the superseded and amended copies.
How long must we retain executed copies?
Follow record-retention rules: federal tax records at least 3 years (IRC §6501(a)), HIPAA-related documents 6 years (45 CFR §164.530(j)), and any longer state or industry requirements.
What about protected health information?
If materials include PHI, implement HIPAA safeguards and execute a Business Associate Agreement (BAA) where required to ensure compliance with privacy and security obligations.

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