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Medical Device Supply Agreement

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MEDICAL DEVICE SUPPLY AGREEMENT

Medical Device Supply Agreement (this "Agreement") is made effective as of this day of , 20 (the "Effective Date"), by and between

, a corporation having its principal place of business at ("Supplier"), and

, a corporation , having its principal place of business at ("Buyer").

1. Recitals.

1.1. Buyer develops, manufactures and sells certain medical products, including its , for use on a worldwide basis in critical medical procedures; and

1.2. Supplier desires to sell to Buyer, and Buyer desires to purchase from Supplier, certain products for Buyer's use in the manufacture of its medical products.

NOW, THEREFORE, in consideration of the foregoing and the covenants contained herein, the parties agree as follows:

2. Manufacture, Purchase and Supply of Components; Terms.

2.1. Components. Supplier will manufacture or purchase, and assemble the components described on Exhibit B attached hereto and incorporated herein (the "Components") and make the Components available for purchase by Buyer, according to the terms and conditions of this Agreement.

2.3. Buyer will furnish Supplier: (1) a forecast with estimated purchase dates, quantities of Components and monthly delivery schedules covering a -month period; and (2) an updated forecast on a rolling basis on the first day of each , which forecast will be binding on a rolling -month basis.

2.5. Price. The prices to be paid by Buyer for the Components purchased hereunder for the first months of this Agreement are in Exhibit B or, for new items added as Components during the term of this Agreement, as may be agreed upon in writing by the parties; provided that, any increase with respect to a Component will not be more than % during any rolling twelve-month period be limited to reflect Supplier's actual changes in its costs to produce the Components.

2.6. Payment Terms. Supplier will submit invoices upon shipment of the applicable Order, and Buyer will pay such invoices in full within 30 days after the later of acceptance of the Components or receipt of the related invoice.

2.7. No Backorders. Supplier will: (1) plan production schedules and provide the Components in accordance with the Orders without backorders; (2) maintain not less than a -month inventory of each Component; and (3) if Buyer has insufficient stock levels as a result of Supplier's failure to supply Components, reimburse Buyer for resulting costs.

3. Specifications; Quality Assurance; Inspections; Component Support.

3.1. Component Specifications. All Components supplied by Supplier will:

(1) meet all requirements, standards and specifications in this Agreement, including those on Exhibit B;

(2) comply with all Laws, including those relating to manufacturing, assembling, labeling, packaging, storing, transporting, and selling the Components;

(3) be manufactured in accordance with "Quality System Regulations" as required by any regulatory authority and ISO standards;

(4) be labeled as indicated by Buyer;

(5) consist only of materials, components, parts and other items that are new and of suitable quality for their intended purpose;

(6) be free from any defects in design, material, or workmanship, and be of good and merchantable quality and fit for their intended uses;

(7) be manufactured, packaged, and stored in facilities that are approved by the FDA and/or other applicable regulatory authorities; and

(8) be free and clear of all liens and encumbrances or other defects in title.

3.2. Quality Assurance Program. Supplier will maintain ongoing quality assurance and testing procedures sufficient to satisfy and ensure compliance with the QA Standards and Buyer's standard requirements.

3.3. Compliance with Laws. Supplier will manufacture, assemble, label, package, store and transport all Components consistent with all applicable laws, regulations, rules, ordinances and requirements.

3.4. Shipping. Supplier will ship all Components according to Buyer's shipping instructions, FOB delivered freight prepaid.

3.5. Documentation and Inspections. Supplier will provide Buyer with copies of requested documentation and samples of the Components upon request.

3.6. Required Notification. Supplier will immediately give Buyer notice if Supplier becomes aware of any defect or condition that alters the Specifications or quality of any Component supplied by Supplier.

3.7. Tracing. Supplier will trace and maintain records regarding the source and lot number of each Component and provide copies upon request.

3.8. Critical Components. Buyer will identify which Components it deems to be safety or performance related ("Critical Components").

4. Confidentiality; Rights to Inventions, etc.; Non-Compete.

4.1. Confidential Information.

4.1.1. "Buyer Confidential Information" will mean all information disclosed by or on behalf of Buyer or its Affiliated Entities to Supplier or any of its representatives.

4.1.2. Supplier will limit dissemination of Buyer Confidential Information to only those Supplier Representatives having a need to know and will not disclose or use such information except as permitted herein.

4.1.3. Neither party will issue a press release or other public announcement concerning this Agreement without prior written approval.

4.2. Supplier's Disclosure of Information. Supplier's disclosure of any information to Buyer will be with the understanding that the information disclosed is not confidential unless otherwise agreed.

4.3. Buyer Property. All tangible property provided to Supplier in connection with this Agreement will be and remain the exclusive property of Buyer unless otherwise agreed to in writing.

4.4. Patents, Inventions and Copyrights. All inventions, improvements or discoveries conceived or made by Supplier relating to the subject matter of this Agreement will be the exclusive property of Buyer.

4.5. Protection of Buyer's Intangible Property. Supplier will not gain any right, title or interest in the Intangible Property and will use such property only as directed by Buyer.

4.6. Covenant Not to Compete. During the term of this Agreement and for a period of one year thereafter, Supplier will not manufacture or sell any Components or substantially similar product to any of Buyer's competitors.

4.7. Injunctive Relief. Each party agrees that any breach under this Section will cause irreparable injury to the other party.

5. Representations and Warranties.

5.1. Of Supplier relating to Components. Supplier represents and warrants that all Components delivered will conform in all respects to the applicable Order and this Agreement.

5.2. Supplier's Assets.

5.2.1. Supplier will not sell, transfer, assign, pledge, grant a security interest in or otherwise encumber assets used or useful in manufacturing and/or supplying the Components without the express written consent of Buyer.

5.2.2. Supplier may sell certain assets used in the manufacture and/or supply of the Components provided notice is given to Buyer.

5.3. Other Representations and Warranties. Each party represents and warrants to the other that it has full power and authority to enter into and perform this Agreement.

5.4. Change of Control of Supplier.

5.4.2. Supplier will give Buyer not less than days' prior written notice of any Change of Control.

5.5. Financial Statements. Supplier will provide Buyer with copies of audited financial statements upon request.

5.6. Employee Non-Solicitation. Neither party will solicit for employment or retention any employee or exclusive consultant of the other party without prior written consent.

6. Indemnification; Insurance.

6.1. Indemnification by Supplier. Supplier will indemnify, defend and hold harmless Buyer and its Affiliated Entities from and against all liabilities, claims, suits, damages, losses, causes of action and expenses relating to any product manufactured or sold by Buyer that incorporates a Component.

6.2. Indemnification by Buyer. Buyer will indemnify, defend and hold harmless Supplier and its Affiliated Entities from and against all Liabilities caused by or based upon any Liability relating to any product manufactured or sold by Buyer that incorporates a Component.

6.3. Conditions of Indemnity. Each party's obligations are conditioned upon prompt written notice, defense control, assistance, and no settlement without consent.

6.4. Insurance. Supplier will purchase and maintain commercial general liability insurance for a period of years after in amounts not less than $ million per occurrence and $ million in the aggregate.

7. Term and Termination.

7.1. Term. The initial term of this Agreement will be year(s), commencing as of and ending on .

7.2. Early Termination.

7.2.1. Either party may terminate this Agreement if the other party materially breaches or becomes subject to bankruptcy, reorganization, receivership, or insolvency proceedings.

7.2.2. Buyer will have the right to terminate this Agreement immediately upon written notice if Supplier fails to satisfy Order requirements or quality standards.

7.2.3. Supplier may terminate this Agreement upon Buyer failure to pay undisputed invoices after notice and cure period.

7.2.5. Force Majeure. Neither party will be in default if performance is prevented or delayed by causes beyond its control.

7.3. Purchase of Components Upon Termination or Expiration. If Supplier terminates this Agreement because of a breach by Buyer, Buyer will promptly purchase a -month supply of each Component. If Buyer terminates this Agreement because of a breach by Supplier, Supplier will promptly make available for purchase not less than a -month supply of each other Component.

7.4. Survival. All obligations that are by their nature continuing will survive the expiration and/or termination of this Agreement.

8. Miscellaneous.

8.1. Independent Contractors. The parties are independent contractors and nothing contained in this Agreement creates any relationship other than that of buyer and seller.

8.2. Entire Agreement; Amendments. The terms of this Agreement, together with the terms of the Orders, will constitute the entire agreement between the parties.

8.3. Assignment; Subcontracting. Neither party will assign this Agreement without the express written consent of the other party, except that Buyer may assign to Affiliated Entities or purchasers of its assets or stock.

8.4. Governing Law; Severability; Waiver; Remedies; Arbitration. The laws of will govern this Agreement.

Any dispute or claim arising out of or relating to this Agreement will be settled by binding arbitration in , .

8.5. Compliance with Laws. During the term of this Agreement, each party will comply with all Laws relating to this Agreement.

8.6. Notices. Notification required or permitted hereby will be deemed given only upon transmission by telecopier, certified mail, or overnight delivery service, addressed as follows:

To Buyer:

with a copy to:

To Seller:

with a copy to:

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

Buyer:

By:

Printed name:

Title:

Date:

Supplier:

By:

Printed name:

Title:

Date:

Exhibit Index:

A. Affiliated Entities (OMITTED)

B. Components, Specifications and Prices (OMITTED)

C. Form Certificate of Compliance (OMITTED)

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What the Medical Device Supply Agreement Is

A Medical Device Supply Agreement is a contract between a manufacturer, supplier, distributor, or purchaser that sets the commercial and regulatory terms for sale, delivery, acceptance, and post-sale support of medical devices. It details product specifications, quality acceptance criteria, regulatory responsibilities, ordering and delivery schedules, pricing and payment, warranties, inspection and recall procedures, intellectual property rights, confidentiality, liability allocation, and termination rights to reduce operational and compliance risk.

Why a Clear Agreement Matters

A well-drafted Medical Device Supply Agreement reduces regulatory and commercial risk, clarifies who handles FDA filings and recalls, fixes inspection and acceptance rules, and defines remedies and payment terms to prevent costly disputes and interruptions.

Why a Clear Agreement Matters

Who Prepares and Signs These Agreements

Typical parties that prepare or sign Medical Device Supply Agreements include manufacturers, contract manufacturers, distributors, hospitals, and device purchasing organizations.

  • Device manufacturers supplying finished products under FDA registration, including CMOs and OEMs.
  • Distributors and wholesalers managing inventory, logistics, and state-level licensing requirements.
  • Hospitals, health systems, and purchasing groups negotiating pricing, delivery, and service level agreements.

Parties should confirm each signer's authority and allocate responsibilities based on manufacturing, regulatory, quality, and commercial roles to avoid downstream conflicts.

Core Sections to Include in the Agreement

A comprehensive agreement groups terms to manage product, quality, regulatory, commercial, and post-sale obligations so responsibilities and remedies are clear for both parties.

Parties

Identify legal entities by full registered name, address, contact, and tax or DUNS identifier; state each party's role as manufacturer, distributor, or buyer and list authorized signatories and limits of authority.

Products

Describe devices by model, catalog and part numbers, software/firmware versions, UDI/GUDID identifiers where applicable, and any accessories or spare parts covered by the contract for traceability.

Specifications

Set acceptance criteria, inspection protocols, sampling plans, test methods, labeling and packaging standards, and nonconformance disposition procedures, including required documentation and traceability obligations.

Pricing

Specify unit prices, volume discounts, invoicing cycles, taxes, payment terms, price adjustment formulas, freight responsibility, and remedies for late or disputed payments.

Regulatory

Allocate responsibilities for FDA registrations, device listing, 510(k)/PMA support, change control, post-market surveillance, adverse event reporting, and inspection cooperation including documentation support obligations.

Liability

Define warranty scope and duration, indemnity obligations, recall cost allocation, insurance requirements, limits of liability, and dispute resolution or termination mechanisms.

Security, Privacy, and Compliance Considerations

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest.
Certifications: SOC 2 Type II; ISO 27001; PCI DSS.
HIPAA: BAA required when PHI is handled.
Audit Trail: Timestamped logs, IP addresses, and action history.
Access Controls: Role-based access and multi-factor authentication.
Data Residency: EU-U.S. Data Privacy Framework available.

Step-by-Step: Completing the Agreement

Follow this sequence to prepare, review, sign, and retain a Medical Device Supply Agreement with appropriate compliance controls.

  • 01
    Prepare Document: Gather device specifications, regulatory filings, licenses, and quality records before drafting.
  • 02
    Define Terms: Set pricing, delivery, acceptance, warranty, and recall responsibilities clearly.
  • 03
    Review Compliance: Confirm FDA, export, and state licensing obligations and allocate reporting duties.
  • 04
    Sign and Store: Execute with authorized signers, notarize if required, and preserve signed records.

How to Configure an Online Signing Workflow

Set up an e-sign workflow that captures consent, authenticates signers, enforces required fields, and preserves an auditable record aligned with compliance needs.

Field Configuration
Signer Order Parallel or sequential signing as required.
Authentication Email plus optional SMS code or knowledge-based verification.
Required Fields Make product specs, acceptance, and signature fields mandatory.
Document Retention Store signed PDF and audit trail for the retention period.

Where to Send and File Completed Agreements

Routing depends on procurement, quality, and regulatory filing requirements; use consistent destinations to maintain a single source of truth for contract and device records.

  • Purchaser Records: Submit executed contract to procurement and contract repository.
  • Quality System: File device specs, inspection results, and deviations with QA.
  • Regulatory Filing: Provide copies to regulatory affairs for 510(k)/PMA or device listing support.
  • Supplier Archive: Store an executed copy in the supplier's secure contract system.

Digital Signing and eSubmission Requirements

Choose a platform that supports strong signer authentication, tamper-evident signed PDFs, a detailed audit trail, and documented compliance certifications.

  • File Formats: PDF, DOCX, and XLSX supported.
  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace.
  • Authentication Options: Email, SMS, KBA, and SSO/SAML.

Key Dates and Deadlines to Track

Track effective date, delivery lead times, acceptance inspection windows, warranty start, and termination notice periods to avoid missed obligations.

Effective Date:

Date in agreement that governs obligations and warranty start.

Delivery Lead Time:

Supplier must meet lead times stated per purchase order or face remedies.

Acceptance Period:

Buyer inspection window typically five to thirty days after delivery.

Warranty Window:

Warranty period typically starts on acceptance or shipment as defined.

Termination Notice:

Notice period typically 30 to 90 days depending on termination clause.

Common Preparation Mistakes to Avoid

  • Failing to define acceptance criteria leads to disputes and costly returns; include inspection methods, sample size, and rejection procedures to avoid ambiguity.
  • Using vague warranty language such as 'reasonable' or 'as required' undermines enforceability; instead specify defect definitions, remedy timelines, and monetary caps.
  • Not allocating regulatory responsibilities for adverse events or recalls can delay safety reporting and increase liability; explicitly assign reporting duties and documentation support.
  • Neglecting to require traceability data (UDI, lot, serial numbers) with shipments complicates recalls and corrective actions; mandate batch records and trace logs.

Penalties and Risks of an Incomplete Agreement

Regulatory Fines: FDA enforcement actions and fines.
Recall Costs: High-cost product retrieval and disposal.
Supply Disruption: Delayed deliveries affecting patient care.
Product Liability: Third-party injury claims and litigation exposure.
Contract Damages: Liquidated damages or indemnity claims.
Data Breach: PHI exposure may trigger HIPAA penalties.

Real-World Examples and How Issues Were Resolved

These examples show common contract choices and their operational impact during device delivery and post-market events.

Large Health System

A regional health system negotiated stricter acceptance testing and required UDI tracking on all shipped devices to streamline recalls.

  • Specified sampling and lot traceability procedures.
  • This reduced recall response time, improved root-cause analysis, and shifted defined recall costs to the supplier through negotiated indemnity and recall allocation clauses, improving overall patient safety response.

Medtech Manufacturer

A mid-sized device maker required formal change control and notification timelines to manage software updates and post-market obligations.

  • Required 30-day written change notice and testing.
  • The approach reduced unplanned production halts, ensured timely regulatory submissions, and provided a dispute resolution path that avoided prolonged litigation while preserving product safety and market access.

Who Typically Has Authority to Sign

VP Supply Chain

Typically an executive with contracting authority who can commit organizational resources, approve pricing schedules, and accept delivery and service terms. Verify delegated authority limits and obtain a corporate resolution or power of attorney for high-value or long-term obligations.

Quality Manager

Often responsible for signing acceptance and technical annexes related to inspection and corrective actions but may lack authority for commercial amendments; use dual-signature workflows when both commercial and quality approvals are required.

Key Contract Milestones

Milestones mark negotiation, production start, first delivery, and recurring post-market reviews; define acceptance checkpoints to link payments and warranty triggers.

01

Negotiation Complete

Final terms executed and effective date recorded to start contractual obligations.

02

Manufacturing Start

Supplier begins production according to approved specifications and schedule.

03

First Delivery

Initial shipment is delivered, inspected, and either accepted or rejected per criteria.

04

Post-Market Review

Periodic safety and performance reviews and regulatory reporting occur as scheduled.

E-signature Vendor Pricing and Compliance Snapshot

Compare per-user pricing and core compliance capabilities among e-signature vendors commonly used to execute Medical Device Supply Agreements.

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 7-day free trial Trial available Trial available Trial available Trial available
Bulk Send Yes Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently Asked Questions and Practical Answers

Answers to common execution, compliance, and e-signature questions for Medical Device Supply Agreements are below.


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