Fulfillment terms are the primary promises in a procurement contract. They spell out what goods or services will be delivered or performed as well as when, how, where, by whom, and everything in between. Carefully crafting clear and methodical fulfillment terms will help protect the company in cases of breach and also ensure a smooth […]
Representations & Warranties
Representations are factual statements that a provider makes about the provider’s operations and include the provider’s capabilities, among other things. Most importantly, companies should ask for representations that affirm the provider’s ability to perform under the contract and any special promotional statements the provider made. Warranties are like representations, but they are more like factual […]
Business leaders may benefit by reserving broad or preemptive termination rights. Commonly, provider contracts include terms that allow the providers to cure any contract breaches, essentially allowing for second-chances. Although in some indirect procurement circumstances this may be acceptable and beneficial, in others, it may not. Depending on the importance of the indirectly-procured goods or […]
Indemnification and Limitation of Liability
What happens if one of your suppliers breaches a procurement agreement or you have to procure substitute goods and services? Indemnification clauses may provide for reimbursement to the company in the event of a contract breach or other scenario for legal and other costs. Limitation of liability clauses, on the other hand, work to protect the […]
Minnesota manufacturers, suppliers, and service-providers are growing quickly and need more indirect inputs to facilitate operations and robust sales. Procurement is also a key method to reduce costs. Procurement contracts can have a serious financial impact and need to be carefully reviewed, analyzed and negotiated.
When sourcing your indirect supply needs, you may enter into contracts with suppliers, vendors, contractors, distributors, and others. Contracts large or small should always be negotiated to ensure they accurately capture your specific needs. Experienced negotiators can create multiple advantages for your business.
When finding new procurement sources, drafting agreements, and negotiating contracts, you should obtain representation from experienced legal counsel. Experienced attorneys regularly work with business professionals to advance and protect company interests.
Every Business Engages in Indirect Procurement, But Not All Take It Seriously
All businesses conduct indirect procurement. For some, indirect procurement consists of purchasing office supplies from an outside vendor. For others, indirect procurement involves the outsourcing of customer relationship management, order processing, and other services. Unlike direct procurement, which comprises the bulk of a business’ sourcing activities and involves purchasing raw materials needed for the production of certain goods and services, indirect procurement is the sourcing of goods and services that indirectly facilitate business operations.
Every company can benefit from strategic language in indirect procurement contracts. After carefully assessing company needs in terms of quantity, quality, timing, price, and other variables, business leaders should negotiate with procurement providers to ensure the contract terms protect production interests and ensure operational cohesion. To do so, business leaders should pay special attention to the areas of representations and warranties, indemnification and limitation of liability clauses, fulfillment terms, and termination rights.
Fulfillment terms are the primary promises in a procurement contract. They spell out what goods or services will be delivered […]
Representations are factual statements that a provider makes about the provider’s operations and include the provider’s capabilities, among other things. […]
Business leaders may benefit by reserving broad or preemptive termination rights. Commonly, provider contracts include terms that allow the providers […]
What happens if one of your suppliers breaches a procurement agreement or you have to procure substitute goods and services? Indemnification […]
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