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Finessing Contracts When Supply Chains Are Precarious
November 17, 2022
Sales documents are often as close as there is to a contract between buyers and sellers. A post from law firm Foley & Lardner acknowledges these vehicles are an efficient way to memorialize and document routine commercial transactions, without complex contract negotiations. But in this period of inflation, labor shortages, and supply chain disruptions, it’s become important to think carefully about “quotations and terms and conditions of sale (for sellers) and purchase orders or terms and conditions of purchase (for buyers),” the authors write. “Well-crafted terms help both sides manage risk and avoid unnecessary costs.”
With that in mind, this post looks at the key terms to include in two sets of list, one for seller and one for buyer. Among key terms to include on the buyer’s side: a declaration that “time is of the essence” (even though that is typically assumed to be the case, there are reasons to make it explicit, the writers say); a price lock; and a clear enumeration of what the price includes (e.g., shipping costs, taxes, import duties, etc.). It’s perhaps a sign of today’s high-stress supply chain problems that the first item on both lists is to disclaim or reject the other party’s “terms and conditions.”
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