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Fuel Supply Agreement

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FUEL SUPPLY AGREEMENT

Parties and Effective Date

This Fuel Supply Agreement (the Agreement) is entered into as of by and between:

Recitals

WHEREAS, Supplier is engaged in the business of procuring, storing and delivering petroleum products and has the capacity to supply fuel under the terms set forth herein; and

WHEREAS, Buyer requires the supply of fuel for its operations at the delivery locations identified in this Agreement and desires Supplier to supply such fuel in accordance with the terms and conditions hereafter specified; and

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

Scope of Work

Supplier shall supply and deliver fuel meeting the specifications below to the Delivery Location(s) and in the quantities and on the schedule described in this section. Supplier shall provide all transportation, handling and standard documentation incident to delivery unless otherwise provided in this Agreement.

Delivery, Quantity and Quality

Deliveries shall be made FOB Delivery Point. Title and risk of loss shall pass to Buyer upon delivery and receipt at the Delivery Point. Supplier warrants that all fuel supplied under this Agreement shall conform to the fuel type and applicable commercial specifications at the time of delivery.

Payment Terms

Buyer shall pay Supplier for fuel delivered under this Agreement in accordance with the pricing and schedule set forth below.

Buyer shall pay undisputed invoices within the agreed payment term. Disputed invoice amounts shall be raised promptly in writing and the parties shall cooperate to resolve such disputes in good faith. Interest on overdue amounts shall accrue as set forth in the Late Payment Fee field above.

Term and Termination

The initial term of this Agreement shall commence on and shall expire on unless earlier terminated in accordance with this Agreement.

Either party may terminate this Agreement for material breach if the breaching party fails to cure such breach within thirty (30) days after receipt of written notice. Termination shall be without prejudice to any right or remedy accrued prior to termination.

Confidentiality

Each party shall keep confidential and shall not disclose to any third party any Confidential Information of the other party disclosed in connection with this Agreement, except to its employees, affiliates or advisors who have a need to know and who are bound by confidentiality obligations at least as restrictive as those set forth herein. "Confidential Information" shall exclude information that (a) is or becomes publicly available other than as a result of a breach of this Agreement, (b) is lawfully received from a third party without restriction, or (c) is independently developed without reference to the other party's Confidential Information.

Indemnity, Insurance, and Liability

Supplier shall indemnify, defend and hold harmless Buyer from and against any claims, damages or liabilities arising out of Supplier's negligent performance, breach of warranty or failure to comply with applicable laws in connection with the supply of fuel. Buyer shall indemnify Supplier for claims arising from Buyer's negligence or misuse after delivery.

Each party shall maintain insurance customary for its business activities, including commercial general liability and, where applicable, cargo/transportation insurance in amounts sufficient to cover its obligations under this Agreement.

Force Majeure

Neither party shall be liable for delays or failures in performance caused by events beyond its reasonable control, including acts of God, war, civil disturbance, acts or omissions of governmental authorities, labor disputes, embargoes, or shortages of supply. The affected party shall give prompt written notice and use commercially reasonable efforts to mitigate the effects of the force majeure event.

Governing Law and Dispute Resolution

This Agreement shall be governed by and construed in accordance with the laws of the state of without regard to its conflicts of law principles. Except as otherwise agreed in writing, the parties shall submit disputes to arbitration or litigation as selected by mutual agreement; pending resolution, the parties shall continue to perform their obligations hereunder to the extent practicable.

Miscellaneous

No amendment to this Agreement shall be effective unless in writing and signed by authorized representatives of both parties. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party, except to an affiliate or in connection with a merger or sale of substantially all of its assets.

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

Entire Agreement

This Agreement, including all schedules, exhibits and written attachments, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written.

Supplier:

By:

Date:

Buyer:

By:

Date:

Enter text✕

What a Fuel Supply Agreement Covers

A Fuel Supply Agreement is a commercial contract that sets terms for the sale, delivery, quality, pricing, payment, and risk allocation for fuel products between a supplier and a purchaser. Typical elements include product specifications (grade and testing rights), delivery method and schedule, title and risk transfer, pricing formulas or indexing, minimum purchase commitments, credit and payment terms, force majeure, insurance and indemnity obligations, warranty and liability caps, termination and cure procedures, and dispute resolution mechanisms including choice of law and forum. The agreement governs operational, commercial, and compliance obligations for both parties.

Why a Clear Fuel Supply Agreement Matters

A well-drafted Fuel Supply Agreement reduces supply interruptions, limits commercial disputes, fixes pricing mechanics, and clarifies performance expectations. It also documents allocation of environmental, insurance, and regulatory responsibilities so both parties understand financial exposure and operational obligations under state and federal law.

Why a Clear Fuel Supply Agreement Matters

Who Typically Uses a Fuel Supply Agreement

Common users include fuel distributors, wholesale buyers, fleet operators, airports, marine bunkering firms, and commercial/industrial end users that rely on scheduled deliveries and quality specifications.

  • Fuel suppliers and distributors who manage inventory, logistics, and wholesale pricing under long-term contracts.
  • Large buyers and fleet operators who require scheduled deliveries, invoice controls, and product quality guarantees.
  • Terminal operators, airports, and marine bunkering providers that need delivery windows, storage rules, and liability limits.

Each party should involve commercial, credit, and legal reviewers to confirm operational feasibility, payment security, and regulatory compliance before signing.

Core Clauses to Include in a Fuel Supply Agreement

Include clear, enforceable clauses that address supply obligations, pricing, inspection, title transfer, credit protection, and default remedies. Each clause should reference measurable standards, operational processes, and the legal framework that will govern disputes.

Product Specs

Specify fuel grade, testing methods, acceptable tolerances, and who pays for split-sample testing and handling of off-spec product claims.

Pricing

Define base price, formula (index, rack, or fixed), timing for price adjustment, and any caps, floors, or pass-through costs such as taxes or surcharges.

Delivery Terms

State delivery point, incoterms or equivalent allocation of delivery costs, scheduling windows, demurrage charges, and title transfer moment.

Payment & Credit

Set payment terms, late fees, credit limits, security (letters of credit or guarantees), and remedies for nonpayment including suspension rights.

Liability & Indemnity

Limit direct and consequential damages where appropriate, include indemnity for third-party claims, and require insurance minimums with certificate delivery.

Force Majeure & Termination

Define force majeure events, notice and cure periods, termination for convenience or breach, and post-termination wind-down obligations.

Step-by-Step: How to Complete and Execute the Agreement

Complete the form in sequence, confirm commercial approvals, and obtain authorized signatures from both parties before deliveries begin.

  • 01
    Prepare Draft: Populate all contract fields and attach exhibits.
  • 02
    Commercial Review: Confirm pricing, delivery windows, and minimums.
  • 03
    Legal Review: Validate indemnities, insurance, and governing law.
  • 04
    Execution: Obtain signature blocks signed by authorized representatives.

Typical Online Workflow Settings for Digital Completion

Configure signatures, document routing, authentication, and storage before sending the agreement for signature to ensure an auditable process.

Field Configuration
Signature Order Sequential or parallel signer routing
Authentication Email link, SMS code, or KBA when required
Required Fields Make key fields mandatory to prevent incomplete returns
Storage Location Designate cloud repository or local archive

Technical Considerations for eSigning and eSubmission

Use an eSignature platform that supports audit trails, common file formats, and the authentication level your transaction requires.

  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace
  • File Formats: PDF, DOCX, and fillable forms supported
  • Authentication: Email link, SMS, KBA, and SSO options

How Electronic Execution Typically Works

Electronic signing follows a predictable sequence from upload through signature capture and final archive with an audit trail for compliance and future reference.

  • Upload Document: Sender uploads final negotiated version
  • Place Fields: Assign signature, date, and initial fields
  • Authenticate Signers: Choose authentication method per signer
  • Capture Signatures: Signers review and sign; platform records audit trail

Common Errors to Avoid When Preparing a Fuel Supply Agreement

  • Leaving pricing mechanics undefined or ambiguous, which leads to disputes over index references, effective pricing dates, and premium calculations.
  • Omitting delivery point or incorrect title transfer language, causing disagreement about who bears loss during transit and disputed claims on damaged shipments.
  • Failing to document minimum purchase obligations or notice windows for schedule changes, leaving parties exposed to imbalance charges or unexpected supply shortfalls.
  • Not specifying inspection or testing protocol and allocation of split-sample costs, which increases litigation risk when fuel quality is contested.

Security and Compliance Considerations

Encryption in transit: TLS 1.2/1.3
Encryption at rest: AES-256
Audit trail: Comprehensive event log
Certifications: SOC 2 Type II
Regulatory: ESIGN, UETA compliant
Healthcare BAA: HIPAA available with BAA

Commercial and Legal Risks of an Inadequate Agreement

Breach Damages: Compensatory and incidental
Liquidated Damages: Enforceable if reasonable
Supply Interruptions: Operational and reputational harm
Regulatory Fines: Environmental penalties possible
Credit Exposure: Unsecured receivables risk
Dispute Costs: Arbitration or litigation expenses

Key Dates and Timing to Track

Monitor execution, delivery windows, price adjustment dates, invoicing cycles, and cure periods. Track timelines carefully to preserve remedies and avoid default.

Effective Date:

Contract start date that triggers obligations and payment timelines

Delivery Windows:

Specified dates or recurring schedules for shipments and transfers

Price Fixing Date:

Date on which index or benchmark determines invoice price

Invoice Due Date:

Payment term counted from invoice receipt or agreed receipt date

Cure Periods:

Defined days to remedy breach before termination rights apply

Typical Contract Lifecycle Milestones

Track negotiation, approval, execution, and first delivery milestones as a connected sequence to ensure operational readiness and financial controls.

01

Negotiation

Agree terms, exhibits, and pricing formulas

02

Internal Approvals

Credit and legal sign-off required before execution

03

Execution

Authorized signatures exchanged and copies archived

04

First Delivery

Operational handoff and verification of product acceptance

eSignature Pricing and Feature Snapshot for Contract Execution

Comparison of common eSignature vendor pricing and key capabilities relevant to high-volume contract signing and compliance. Confirm vendor plans for exact feature sets and enterprise pricing.

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 Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes (Business Premium) Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No cap 100 envelopes/user/yr Varies Varies Varies

FAQs and Troubleshooting for Fuel Supply Agreements

Answers to common questions about enforceability, electronic signatures, amendments, and dispute handling for Fuel Supply Agreements.


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