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 services, business leaders may have significant reasons to reserve the right to terminate an agreement at the earliest instance of trouble, thus allowing the company to find a replacement provider before business operations are substantially interrupted and sales are lost.
If you are a business leader considering indirect procurement, you should work with an attorney to structure your contract in accordance your specific needs. This article was sponsored by Vlodaver Law Offices, LLC, an experienced business solutions and transactions law firm in the Twin Cities. If you would like a free legal consultation, contact us, or call at 612-424-1LAW.