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A preferred supplier agreement (PSA) differs from a contract to supply services. Many businesses in New Zealand, particularly in sectors like IT and cleaning, utilize PSAs, which are not legally binding contracts. PSAs often signify a strong working relationship between the supplier and the business, facilitating ongoing service continuity, especially during business sales. For instance, a carpet cleaning business may operate under a PSA or a casual agreement, indicating mutual trust and understanding, allowing them to conduct business smoothly. Understanding these distinctions is crucial for business buyers seeking assurance of service reliability after acquiring a business.
