How to review a supply agreement under English law

A supply agreement sets the terms on which a supplier sells goods to a business customer over time, usually through individual orders. Under English law, statute fills many gaps, so the review is partly about what the contract says and partly about what the Sale of Goods Act 1979 and other rules add or prevent. This checklist covers the clauses to check and how to review the agreement in Word with LexDraft.

Last checked: 17 October 2026. The law changes; check the current position before relying on this page.

This guide covers the law of England and Wales. Scotland and Northern Ireland have their own rules on several of the points below.

Clause checklist

• Framework and orders. Is the agreement a framework with no commitment until an order is accepted, or does it include minimum volumes? Check how orders are placed and accepted, and that the agreement's terms override the parties' standard terms on order forms. Conflicting standard terms create a "battle of the forms".
• Forecasts and capacity. Whether forecasts are binding, and the supplier's duty to reserve capacity.
• Specification and quality. Product specifications, quality standards, inspection and testing, and the process for rejecting non-conforming goods.
• Implied terms. The Sale of Goods Act 1979 implies terms about title (section 12), description (section 13), satisfactory quality and fitness for purpose (section 14) and sale by sample (section 15). Under section 6 of the Unfair Contract Terms Act 1977, liability for breach of the title term cannot be excluded or restricted, and liability for breach of sections 13 to 15 can be excluded or restricted against a business only if the term is reasonable.
• Delivery and risk. Delivery terms (Incoterms if used), time of delivery and whether time is of the essence, and when risk passes.
• Retention of title. Title passing only on payment protects the supplier if the customer becomes insolvent. Check how far it goes: identifiable goods, proceeds of sale and goods mixed into other products are treated differently.
• Price and payment. Price adjustment mechanisms, payment terms and late payment interest. The Late Payment of Commercial Debts (Interest) Act 1998 implies interest at 8% above Bank of England base rate plus fixed compensation unless the contract provides a substantial remedy. The Commercial Payments Bill, which would add maximum payment terms, was before Parliament in October 2026 and is not yet law.
• Warranties and remedies. Express warranty period, repair or replace remedies, and whether these are exclusive.
• Liability. Cap, exclusion of indirect loss and loss of profit, and carve-outs. Business-to-business exclusions on standard terms must be reasonable under the Unfair Contract Terms Act 1977, and liability for death or personal injury caused by negligence cannot be excluded.
• Product safety and recalls. Compliance with product safety law, recall cooperation and costs.
• Termination and insolvency. Since the Corporate Insolvency and Governance Act 2020, section 233B of the Insolvency Act 1986 stops a supplier terminating a supply contract, or doing any other thing, because the customer enters a relevant insolvency procedure. Termination rights triggered only by insolvency may not work.
• Exclusivity and competition. Exclusive supply or purchase obligations can raise competition law questions; check duration and market position.

Review the supply agreement in Word with LexDraft

1. Open the supply agreement in Word, open LexDraft from the Home tab and set the jurisdiction chip to UK: England & Wales (or UK: Scotland or UK: Northern Ireland if that is the governing law).
2. Run the quick checks. They are rule-based and run without AI, catching undefined or unused defined terms, broken cross-references, numbering gaps and inconsistent capitalisation.
3. LexDraft has four built-in playbooks (NDA, SaaS MSA, DPA and services agreement) and no dedicated supply agreement playbook, so this runs as a general review against the governing law you chose. Use the checklist on this page to direct your own read. Findings are graded Critical, High, Medium or Low, and LexDraft flags standard terms that are missing.
4. Accept or reject each proposed redline. Accepted edits land as native Word tracked changes, ready for the other side.
5. Ask the Assistant to explain a clause in plain English or suggest wording for your side. Answers use UK spelling.
6. Look up any case you want to rely on in the Case law tab, then open the judgment on Find Case Law and read it yourself. UK judgments in LexDraft come from The National Archives' Find Case Law service, which only partially represents the activities of the courts and tribunals. Not every judgment or decision is included. Find Case Law does not include judgments from Scottish or Northern Irish courts or tribunals.

LexDraft does not give legal advice and does not summarise judgments. AI output can be wrong, so qualified counsel must check every redline before it goes out.

Common mistakes

• An entire agreement clause that does not deal with standard terms printed on purchase orders and delivery notes.
• Relying on an insolvency termination right that section 233B overrides.
• Using "Products", "Goods" and "Items" interchangeably. The defined-term check catches this.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. LexDraft is not affiliated with or endorsed by The National Archives or any court. Spotted something out of date? Email support@lexdraft.ai and we will fix it.