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Spearheading Strategic Business Efficiency

 . EDI Agreement

EDI Interchange Agreement:

It is a legal agreement formed between your firm and its trading partner. It regulates the exchange of key business documents and will be formed as per ANSI X12 standards. All the terms conditions for business documents’ exchange among trading partners have been mentioned in it.

Let’s have a quick view on the details that are part of a typical EDI Agreement:

Article 1: Objective and Scope

  • The main purpose of the entire EDI process will be described in this section. All the specific terms as well as conditions will be mentioned clearly.
  • The provisions of the agreement along with Technical Annexe will be mentioned in this section.

Article 2: Definitions

The related description of all the important terms involved in the EDI transaction will be defined in this section.

  • Electronic Data Interchange (EDI): Exchange of key business documents between many trade partners.
  • Electronic Data Interchange Message (EDI Message): Set of data elements organized in a standard format. It should be easily readable/processable by any trading partner’s system.
  • Electronic Data Interchange Agreement (EDI Agreement): Approved set of standard formats and norms for the exchange process.
  • Acknowledgement of receipt: A letter sent by the receiver after accepting the receipt of an EDI message. It usually includes:

    • Network Acknowledgement
    • Protocol Acknowledgement
    • Functional Acknowledgement
    • Technical Acknowledgement
  • Functional Domain: A particular business area for which this specific EDI exchange process is intended.
  • Issuer or sender: The firm that issues the EDI message.
  • Provider of network services: Describes the third-party that facilitates data transfer.
  • Integrity: A feature that ensures the quality and reliability of the data. The data should be sent without any modification in an unauthorized way.
  • Data Log: Describes the format in which all the transactions are required to be mentioned. It should be done according to their processing date and time.
  • Standards: Defines the standards used for the exchanging process.
  • Message Implementation Guideline: Define norms for creating and sending a specific EDI message.
  • Receiver: The firm to whom the EDI message is being sent.
  • Re-send: A request sent by the receiver to the issuer or the network service provider for resending an EDI message.

Article 3: Validity and Formation of Contract

All the details related to the contents of the contract and its validity will be mentioned in this section. Furthermore, all the possible consequences linked with the contract breach will be also stated in this section.

Article 4: Admissibility in evidence of EDI messages

Describe all the frameworks under which, this agreement may be produced in front of the respective Courts.

Article 5: EDI message’s processing and acknowledgement of receipt

The information related to the deadline for processing and acknowledging different EDI messages. It also includes provisions related to these time-limits. Apart from that, this section also contains info on notice issuing in case of deadline failure.

Article 6: Security of EDI messages

This particular section contains all the information related to security procedures. It focuses on all the steps taken out for ensuring complete protection for EDI messages against legal activities. For instance, unauthorized access, modification, destruction, delay, or loss. Besides, this section also provides info on data verification and error handling.

Article 7: Confidentiality of personal data and protection policy

All the norms related to confidentiality and the protection policy will be mentioned in this section. It becomes highly important since every country’s privacy laws will be different.

Article 8: Recording and storage of EDI messages

All the details related to recording and storing of different EDI messages can be found in this section. It also consists of information on the accessibility of the saved data in a human-readable format. Moreover, a list of all operational equipment that are used in this setup will be included in this section.

Article 9: Operational requirements for EDI

This section focuses on all the equipment and procedures that are important for maintaining a perfect operational environment. It includes:

  • Operational Equipment:
    Details on installation and maintenance of the entire setup will be available in this section. Also, all the concerned software and support services will be mentioned here.
  • Communication Modes:
    Information on the method of communication and related protocols are available. Also, a description of the third-party service providers will be provided.
  • EDI message agreements:
    All the approved file formats and processing methods will be mentioned in this section.
  • Codes:
    The list of EDI standards along with transaction codes that are going to be used in the exchange process will be stated in this section.
  • System Availability:
    All the systems involved in the exchange process will be noted in this section. For instance, among many trading partners, any partner might wish to replace his entire system or some specific parts. The guidelines related to providing information to other trading partners about this change in the system(s) will also be available.
Article 10: Technical specifications and requirements

In this section, all the technical requirements and specifications related to each part of the entire set-up will be available.

Article 11: Liability

All the responsibilities related to damages caused by the firm or any of the trading partners will be noted in this section.

Article 12: Modification, Schedule, and Termination
  • Modification:
    Info on provisions related to the modification of this agreement will be available in this section.
  • Schedule:
    The effective date of the agreement will be
    noted in this section.
  • Termination:
    The norms related to the termination of the agreement will be noted in this section. It also includes information on the rights as well as obligations related to each part involved in this agreement.