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A preferred supplier agreement (PSA) differs from a contract to supply services, commonly found in businesses, particularly in New Zealand, where service providers like IT and cleaning firms often utilize PSAs. A PSA outlines a relationship that is distinct from a formal supply contract, and it plays a crucial role, especially during the sale of a business, as it ensures continuity of service for the new owner. For instance, in a carpet cleaning business with a PSA, the relationship may be informal and based on mutual understanding, allowing operations to proceed without a contract. Understanding these distinctions is essential for business buyers.