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Cutting Ties With Your Supplier? Here’s How to End on Good Terms

Cutting Ties With Your Supplier? Here’s How to End on Good Terms

Most businesses are dependant on suppliers. Having a good relationship with your supplier is important every step of the way - here's how to do it.

22nd October 2019
Reading Time: 2 minutes

Reliable and good suppliers are crucial to maintaining your business’ health. However, if your business is coming to a close there are still ways to maintain a good relationship with your supplier in the future.

Why is a good supplier relationship important?

Supplier management is important while you are dealing with a supplier. They ensure you have timely delivery of quality materials. They can also create discounts and favourable terms for you based on a preexisting relationship. Subsequently, there are clear benefits for a good supplier relationship. However, when ending a business relationship it is also important to ensure your relationship remains positive. This is because your business’ future is never completely certain. Even if you are exiting a particular industry, your supplier may become an important professional contact for you or your network in the future. This poses the question, how do you ensure your relationship with your supplier remains good even after your initial professional relationship ends?

Tips to keep a maintain a good supplier relationship

The first step you should take as as a business is to create a clear supply agreement which outlines all relevant duties and responsibilities of both the supplier and customer. This is a preemptive step which will often prevent conflicts from arising between the two parties. Parties can prevent business conflicts by including important terms such as the following.

  • The nature of the services to be performed;
  • Placement of orders and supply of products;
  • Insurance;
  • Termination;
  • Price and payment;
  • Confidentiality;
  • KPIs and reporting; and
  • Relevant warranties and indemnities.

This agreement should further include how disputes will be settled if they do arise. This ensures even if conflicts do arise they can be resolved in a straightforward manner without straining the relationship.

Your can continue to maintain a good supplier relationship if you ensure you pay on time, provide adequate lead time and share relevant information with them.

After termination of your original contract you can still remain loyal to your supplier by referring any potential future customers their way. This will allow you to stay in your suppliers favour and concurrently assist those within your network.


Ultimately, it is clear that maintaining a good relationship with your supplier after terminating a business is important. The first step to maintain this relationship is establishing a supply agreement. Once your relationship has begun, it’s important to make considerations such as timely payments and providing adequate lead time to appropriately foster this relationship.

Don’t know where to start?
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Gopi Giri

Gopi is currently a graduate in the legal documents team at Lawpath. Gopi is interested in cyber law and future innovations in the legal industry.