Long Term Agreement
When two or more parties agree to do business together on an ongoing basis, they may sign a long-term agreement (LTA). LTAs are common in procurement, where one company agrees to purchase a certain amount of goods or services from another company over a period of time. The terms of the LTA can vary, but typically include pricing, delivery, and quality provisions.
LTAs can be beneficial for both buyers and sellers. For buyers, LTAs help ensure a reliable supply of goods or services at a predictable price. For sellers, LTAs provide stability and predictability in their sales. However, LTAs can also be inflexible and may restrict companies’ ability to take advantage of other opportunities that come up.