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The text discusses the distinction between a Preferred Supplier Agreement (PSA) and a contract to supply. Many businesses, particularly in New Zealand, engage suppliers, especially for services like IT and cleaning, through PSAs. A PSA is not the same as a formal contract; it often reflects an informal, ongoing relationship. Understanding PSAs is crucial for business buyers, as they seek continuity of service after a sale. For example, a carpet cleaning business might operate under a PSA or a casual agreement based on mutual goodwill, illustrating how these arrangements function in practice. This highlights the importance of PSAs in business operations and transitions.
