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The text discusses the distinction between a preferred supplier agreement (PSA) and a contract to supply services, particularly in the context of New Zealand businesses. Many companies, especially in the service sector (like IT or cleaning), utilize PSAs to establish a preferred relationship rather than a formal contract. PSAs are crucial for buyers looking to ensure continuity of service when purchasing a business. For instance, a carpet cleaning business might have an informal PSA or casual agreement with a supplier, allowing them to collaborate effectively without a formal contract. Understanding these differences helps businesses navigate supplier relationships better.