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A preferred supplier agreement (PSA) and a contract to supply are distinct concepts in supplier relationships. Many businesses in New Zealand utilize PSAs, particularly for services like IT and cleaning. A PSA, often less formal than a contract, plays a crucial role in continuity of service, especially during business sales. For example, a carpet cleaning business may operate under a PSA or a casual arrangement, fostering a good working relationship without a formal contract. Understanding these agreements is essential for business buyers, as they impact service provision and operational stability post-sale.
