A fuel supply agreement (FSA) is a legal contract between two or more parties that outlines the terms and conditions of the purchase and sale of fuel products. It is typically used by fuel suppliers and consumers, such as gas stations, airlines, and other large industrial companies.
The FSA typically covers the following areas:
1. Product and Quantity: The agreement specifies the type of fuel product, its quality and quantity to be supplied by the supplier to the consumer.
2. Delivery Terms: The FSA outlines the place and manner of delivery of the fuel product, including the transportation method, delivery date and quantity to be delivered.
3. Pricing and Payment Terms: The agreement specifies the price per unit of fuel, as well as the payment terms, such as payment due date and mode of payment.
4. Security and Risk Allocation: The agreement outlines measures to be taken to ensure safety and security of the fuel product during storage, transportation and delivery. It also includes provisions for risk allocation in case of any loss or damage.
5. Termination and Renewal: The FSA specifies the conditions under which the agreement may be terminated by either party, as well as provisions for renewal of the agreement.
FSAs are an important tool for businesses that rely on fuel products for their operations, as they provide a clear framework for the supply chain that ensures timely and consistent delivery of fuel products. They also help to minimize the risk of disputes between the parties.
In summary, an FSA is a legal contract that outlines the terms and conditions of the purchase and sale of fuel products between a supplier and a consumer. It is a critical tool for businesses in managing their fuel supply chain and ensuring that their operations run smoothly.