Supply Agreement (Nigeria)
SUPPLY AGREEMENT
Sale of Goods Act (Cap S1, LFN 2004) | Companies and Allied Matters Act 2020
This Supply Agreement is made on [Agreement Date] between:
(1) [Supplier Name] of [Supplier Address], CAC No. [Supplier CAC Number] ("the Supplier"); AND
(2) [Buyer Name] of [Buyer Address], CAC No. [Buyer CAC Number] ("the Buyer").
1. GOODS AND QUALITY
1.1 The Supplier agrees to supply the following goods to the Buyer: [Goods Description]
1.2 Quality Standards: [Quality Standards]
1.3 Minimum Order Quantity: [Minimum Order Quantity]
1.4 The Supplier warrants that all goods supplied shall be of merchantable quality and fit for their intended purpose, as implied by Sections 14–17 of the Sale of Goods Act (Cap S1, LFN 2004), and shall comply with all applicable NAFDAC, SON, and FCCPC Act 2018 requirements.
2. PRICE, DELIVERY, AND PAYMENT
2.1 Pricing: [Pricing Terms]
2.2 Delivery Terms: [Delivery Terms]
2.3 Payment Terms: [Payment Terms]
2.4 The Buyer shall deduct withholding tax (WHT) at the applicable rate under the Companies Income Tax Act (Cap C21, LFN 2004) from all payments for goods supplied and remit such WHT to the Federal Inland Revenue Service (FIRS) within 21 days.
2.5 Value Added Tax (VAT) at 7.5% under the Value Added Tax Act (as amended by the Finance Act 2020) shall be charged on the supply of goods and is payable by the Buyer in addition to the contract price.
3. INSPECTION AND REJECTION
3.1 [Inspection Rights]
3.2 If the Buyer rejects any goods as non-conforming, the Supplier shall replace the rejected goods at the Supplier's cost within 14 days of receiving the rejection notice, or issue a credit note for the value of the rejected goods.
3.3 Goods not rejected within the inspection period shall be deemed accepted.
4. DURATION AND TERMINATION
4.1 Duration: [Agreement Duration]
4.2 Either party may terminate this Agreement immediately by written notice if the other party: (a) commits a material breach and fails to remedy it within 30 days of written notice; (b) becomes insolvent or has a receiver or liquidator appointed; or (c) ceases to carry on business.
5. GOVERNING LAW AND DISPUTE RESOLUTION
5.1 [Governing State]
Supplier (Authorised Signatory)
________________
Signature
Buyer (Authorised Signatory)
________________
Signature
What Is a Supply Agreement (Nigeria)?
A Supply Agreement in Nigeria records the obligations the parties accept and the terms governing their arrangement.
The Sale of Goods Act (Cap S1, LFN 2004), which is the principal Nigerian statute regulating contracts for the sale of goods, implies certain conditions and warranties into every contract for the sale of goods: under Section 14, there is an implied condition that the supplier has the right to sell; under Section 15, an implied condition of correspondence with description; under Section 16, implied conditions of merchantable quality and fitness for purpose; and under Section 17, an implied condition of correspondence with sample. A Supply Agreement may incorporate, exclude, or modify these implied terms (subject to the FCCPC Act's limits on exclusion clauses in consumer contracts).
Supply agreements are used extensively across Nigerian industries — including fast-moving consumer goods (FMCG), manufacturing, construction, oil and gas, pharmaceuticals, agriculture, and retail. Major Nigerian corporations such as Nestlé Nigeria Plc, Dangote Industries Limited, Nigerian Breweries Plc, and the Nigerian National Petroleum Company Limited (NNPC) maintain complex supplier networks governed by supply agreements that incorporate Nigerian Content requirements, NAFDAC compliance standards, SON standards compliance, and anti-corruption provisions mandated by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act 2000 and the Proceeds of Crime (Recovery and Management) Act 2022.
For government procurement of goods under the Public Procurement Act 2007, supply contracts must follow the Bureau of Public Procurement (BPP) Standard Bidding Documents and Contract Conditions, which impose specific Nigerian Content, performance bond, and advance payment guarantee requirements on government supply contracts.
The legal framework governing the Supply Agreement (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Supply Agreement (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.
When Do You Need a Supply Agreement (Nigeria)?
A Supply Agreement is required in Nigeria whenever a buyer and supplier establish an ongoing commercial relationship for the regular delivery of goods.
A Supply Agreement is required when a Nigerian manufacturer or industrial company enters into an arrangement with a raw material supplier for the regular delivery of specified inputs — such as agricultural commodities, industrial chemicals, packaging materials, or machine components — and the parties need to fix pricing, delivery schedules, quality standards, and payment terms for deliveries over a period of six months or longer.
A Supply Agreement is needed when a Nigerian retailer, supermarket chain, or distributor establishes a formal supply relationship with a domestic manufacturer or importer to govern the ongoing supply of branded consumer goods — including the manufacturer's compliance with NAFDAC registration requirements under the NAFDAC Act and SON standards under the Standards Organisation of Nigeria Act 2015.
A Supply Agreement is required when a federal or state government ministry or parastatal awards a supply contract for recurring procurement needs — such as office stationery, uniforms, pharmaceuticals, or food items — following a competitive bidding process under the Public Procurement Act 2007 and BPP procurement guidelines.
A Supply Agreement is needed when an oil and gas company operating under a petroleum licence issued by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) requires a local Nigerian company to supply goods — such as pipes, drilling consumables, personal protective equipment, or catering supplies — under the Nigerian Content Act 2010 and applicable NCDMB procurement guidelines.
A Supply Agreement is required when a foreign company enters the Nigerian market through a distribution arrangement and needs a supply agreement with its Nigerian distributor that governs the terms of product supply, minimum order quantities, pricing in Nigerian Naira (NGN), import documentation requirements under the Nigeria Customs Service, and the distributor's compliance with NAFDAC, SON, and other Nigerian regulatory requirements.
Parties in Nigeria should prepare a Supply Agreement (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Supply Agreement (Nigeria)
A complete Supply Agreement in Nigeria must contain the following essential elements.
Parties: Full legal names, CAC registration numbers under the Companies and Allied Matters Act 2020, registered addresses, and Tax Identification Numbers (TINs) of the supplier and the buyer. The authorised signatories of each party and their authority to bind the company must be confirmed.
Product Description and Specifications: A precise description of the goods to be supplied, including product names, codes, specifications, grades, and applicable Nigerian Industrial Standard (NIS) or international standard (ISO, ASTM) references. NAFDAC registration numbers for regulated food, drug, or cosmetic products must be included.
Pricing and Currency: The price per unit or agreed pricing formula in Nigerian Naira (NGN), provisions for price adjustment (with agreed indices such as the National Bureau of Statistics consumer price index or the Manufacturers Association of Nigeria raw material cost indices), and any foreign exchange provisions for imported goods under the CBN Foreign Exchange Manual.
Delivery Terms: Delivery locations (DDP, DAP, FOB, or other Incoterms 2020 terms as agreed), delivery schedule or frequency, lead times, packaging requirements, and the allocation of risk and title in the goods between supplier and buyer in accordance with the Sale of Goods Act (Cap S1, LFN 2004).
Quality and Inspection: The quality standards applicable to the goods, the buyer's right to inspect and reject non-conforming goods, the procedure for return of rejected goods, and the supplier's obligation to replace defective goods or issue credit notes. Reference to NAFDAC, SON, or other regulatory compliance requirements applicable to the specific product category.
Payment Terms: Payment period (e.g., 30, 60, or 90 days from invoice or delivery), method of payment (bank transfer, letter of credit), withholding tax obligations under the Companies Income Tax Act (the buyer's obligation to deduct 5% WHT on goods supplied by a company and remit to FIRS), and provisions for disputed invoices.
Duration, Renewal, and Termination: The initial supply period, automatic renewal provisions, notice period for termination or non-renewal, and consequences of early termination including compensation for committed inventory.
Additional compliance elements for a Supply Agreement (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Supply Agreement (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/business/services/supply-agreement-nigeria
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@misc{formslegal-supply-agreement-nigeria,
author = {{Forms Legal}},
title = {Supply Agreement (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/business/services/supply-agreement-nigeria}},
note = {Free legal document template. Based on Companies and Allied Matters Act (CAMA) 2020}
}
Frequently Asked Questions
Under the Sale of Goods Act (Cap S1, Laws of the Federation of Nigeria 2004), several conditions and warranties are implied by law into every contract for the sale of goods in Nigeria, including supply agreements. Section 14 implies a condition that the supplier has the right to sell the goods and that the buyer will enjoy quiet possession. Section 15 implies a condition that where goods are sold by description, the goods will correspond with the description. Section 16 implies a condition that where goods are sold in the course of a business, the goods shall be of merchantable quality — meaning fit for the purpose for which goods of that kind are commonly used — and fit for any particular purpose made known to the supplier. Section 17 implies a condition that where goods are sold by sample, the bulk will correspond with the sample. The Federal Competition and Consumer Protection Commission Act 2018 (FCCPC Act) imposes additional product liability and consumer protection standards that cannot be excluded by contract in consumer-facing supply agreements, and the FCCPC has powers to investigate and sanction suppliers of unsafe or substandard products.
Withholding tax (WHT) in Nigeria applies to payments for goods supplied under a Supply Agreement at the rate of 5% of the gross payment amount for supplies by companies and 5% for supplies by individuals, under the Companies Income Tax Act (Cap C21, LFN 2004) and the Personal Income Tax Act (Cap P8, LFN 2004) as amended by the Finance Acts. The buyer (payer) is obligated to deduct the withholding tax at source and remit it to the Federal Inland Revenue Service (FIRS) within 21 days of deduction under the FIRS (Establishment) Act 2007. The supplier receives the net payment and can use the WHT credit certificate issued by FIRS to offset its final income tax liability. The Finance Act 2019 clarified that WHT applies to goods that are the subject of a contract for the supply of goods specifically made for the buyer (contracts for work and materials), while straightforward purchases of goods from the open market may not attract WHT. Parties should obtain specific tax advice from a CITN-certified tax practitioner regarding the WHT treatment applicable to their specific supply arrangement.
Where a supplier delivers substandard or non-conforming goods under a Supply Agreement in Nigeria, the buyer has several remedies under the Sale of Goods Act (Cap S1, LFN 2004) and general contract law. The buyer may reject the goods and treat the supply agreement as repudiated (where the breach goes to the root of the contract), claiming damages for the cost of obtaining substitute goods elsewhere. Alternatively, the buyer may accept the goods and sue for damages equal to the difference in value between the goods as delivered and the goods as they should have been under the contract. For partial deliveries of non-conforming goods, the buyer may reject the non-conforming portion and accept the conforming portion. The Federal Competition and Consumer Protection Commission (FCCPC) may additionally investigate and sanction suppliers of unsafe products under the FCCPC Act 2018. For government supply contracts under the Public Procurement Act 2007, the procuring entity may invoke the performance bond and blacklist the defaulting supplier from future government contracts under BPP debarment procedures.
A Supply Agreement in Nigeria can fix prices for more than one year, but given Nigeria's historically high inflation rate — which averaged above 20% annually in 2023–2024 per National Bureau of Statistics data — most commercially prudent supply agreements include price escalation or adjustment mechanisms for multi-year contracts rather than fixed prices for the full term. Common price adjustment mechanisms in Nigerian supply agreements include: annual renegotiation clauses entitling either party to request a price review once per year; indexation to specific commodity price benchmarks or the NBS consumer price index; and pass-through provisions for significant cost increases in specified input categories (e.g., petroleum products, imported raw materials subject to CBN foreign exchange rate movements). For contracts involving imported goods, the CBN's exchange rate policy and the naira's exchange rate against the US Dollar and Euro significantly affect the naira cost of supplies, and contracts should specify the exchange rate mechanism and currency risk allocation between the parties.
A Supply Agreement between a Nigerian supplier and buyer does not require registration with any government body as a general rule under Nigerian commercial law. Commercial contracts are enforceable in Nigeria by virtue of the law of contract without mandatory registration, unlike property transactions (which require Land Registry registration) or company documents (which require Corporate Affairs Commission filing). However, certain sector-specific supply agreements may trigger registration or notification requirements: supply agreements in the pharmaceutical and food sectors may be reviewed by the National Agency for Food and Drug Administration and Control (NAFDAC) as part of product registration processes; supply agreements in the petroleum sector must be disclosed to the Nigerian Content Development and Monitoring Board (NCDMB) for Nigerian Content compliance; and supply agreements for government procurement above the open competitive bidding threshold under the Public Procurement Act 2007 must follow the Bureau of Public Procurement (BPP) award and contract documentation requirements. Supply agreements involving foreign parties and payment abroad may require CBN notification under the CBN Foreign Exchange Manual.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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