Two questions decide most of what matters. **Who is the importer of record** — which determines who pays import VAT and duty and who carries product compliance. And **when does title pass** — which decides whether the supplier can recover unpaid goods if the buyer fails. Settle both before the delivery term.
Supply of Goods
Terms, risk, title and import
Two questions decide most of what matters. Who is the importer of record — which determines who pays import VAT and duty and who carries product compliance. And when does title pass — which decides whether the supplier can recover unpaid goods if the buyer fails. Settle both before the delivery term.
| Item | Detail |
|---|---|
| Supplier | [NAME], [licence / registration] [NUMBER], [jurisdiction] |
| Buyer | [NAME], licence [NUMBER], [jurisdiction] |
| Goods | [DESCRIPTION] |
| Term | [2] years from [DATE] |
| Delivery term | [Ex Works / FCA / CIF / DDP — Incoterms 2020], at [NAMED PLACE] |
| Importer of record | [Supplier / Buyer] |
| Risk passes | [On delivery at the named place] |
| Title passes | [On payment in full — retention of title] |
| Payment terms | [30] days from a valid tax invoice |
| VAT | 5% where applicable; designated zone treatment differs for goods |
| Governing law and forum | [Emirate of ______ / DIFC / ADGM / Arbitration] |
1. Orders
1.1This agreement sets the terms on which the Supplier supplies the Goods. It does not commit the Buyer to any minimum quantity unless stated.
1.2The Buyer places orders specifying goods, quantity, price, delivery date and address. An order is accepted when confirmed in writing or on despatch.
1.3These terms apply to every order. The Buyer’s purchase order terms and the Supplier’s standard terms do not apply, wherever they appear.
2. Price and Payment
2.1Prices are as stated in Schedule 1, exclusive of VAT, and are fixed for [12] months, thereafter revisable on [60] days notice.
2.2The Supplier shall issue a valid tax invoice and the Buyer shall pay within [30] days.
2.3VAT is charged in addition where applicable. Where goods move within or between designated zones the treatment may differ; where they leave a designated zone for the mainland, VAT becomes payable, commonly under the reverse charge.
2.4The Buyer shall not withhold or set off except a sum genuinely disputed and notified within [10] business days.
2.5Late payment carries interest at [RATE] per cent per annum, and the Supplier may suspend deliveries on [7] days notice where an undisputed invoice is more than [30] days overdue.
6 more pages in the Word file
This is page 1 of the Word document, exactly as it appears when you open it. Fields shown like THIS are placeholders for you to complete.
These notes accompany the template and explain the drafting choices, the compliance points and the mistakes most often made with this document. They appear as a final page in the Word file, intended to be deleted before the document is executed.
The importer bears customs clearance, duty, import VAT, permits and product compliance responsibility. A DDP term puts that on the supplier; Ex Works puts it entirely on the buyer. Businesses agree a price and an Incoterm without working out who is actually importing, and discover it at the port.
Risk determines who bears loss and therefore who insures. Title determines who owns the goods, which matters most if the other side fails. They commonly pass at different moments — risk on delivery, title on payment — and contracts addressing only one leave a real gap.
A retention of title clause is the supplier’s main protection against buyer insolvency, and its practical enforceability depends on the goods remaining identifiable and separate and on how the relevant law treats the arrangement. Confirm the position in the UAE for your specific goods rather than assuming a clause imported from another jurisdiction will operate the same way.
A UAE company may only trade in what its licence covers. Supplying or buying goods outside the licensed activity exposes both sides and can cause customs and payment problems. Read the activity lists, not just the company names.
Product labelling, marking and conformity requirements apply on import, and Arabic labelling is required for many categories. Non-compliant goods sit at the port. Confirm requirements for the specific product before the first shipment, not after.
Movements within and between designated zones may fall outside the scope of VAT for goods in defined circumstances, and goods leaving for the mainland become subject to it. Services are standard rated regardless. Free zone parties routinely assume a broader exemption than exists.
If the arrangement is registered under the commercial agency regime, statutory protections attach — exclusivity, constrained termination, compensation, and the agent’s ability to block parallel imports. That is a fundamentally different relationship from an ordinary supply contract, and it is very hard to exit.
Where each side exchanges standard terms with orders and acknowledgements, which set governs is genuinely uncertain. Clause 1.3 excludes both. Without it, a signed framework agreement can be displaced by a purchase order footer.
For goods feeding a production line or incorporated into a product sold on, the loss from a defect can be many multiples of their price. A cap at the price of the goods is common and transfers most of the risk to the buyer — notice it before signing.
A short window works for visible damage and shortage but not for latent defects, which is why Clause 5.2 provides separately. Too short and the buyer has no remedy for defects it could not have found; too long and the supplier is exposed indefinitely.
Cheques given for supply are a live liability until presented or returned. The treatment of dishonoured cheques changed materially in 2022 — confirm the current enforcement position rather than relying on the older criminal assumption or a vague sense that it no longer matters.
Clause 6.6 requires evidence on request. Request it, and check the product liability limit against the realistic exposure and whether the policy responds in the UAE.
Stopping deliveries preserves the relationship and the receivable while creating immediate pressure. Terminating ends both. Clause 2.5 gives the supplier the more useful remedy.
Onshore courts operate in Arabic with translated documents; DIFC, ADGM and arbitration offer English-language procedure. For a goods dispute involving technical specifications and expert evidence, that difference is substantial.
Reflects UAE law and practice current as of {{DATE OF USE}}. Customs, import VAT, designated zone treatment, product standards and labelling requirements, commercial agency rules and the enforcement of dishonoured cheques all change — take UAE legal advice on any material supply arrangement, and specifically on retention of title and agency registration.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, corporate secretary, or accountant as relevant) before you rely on it.