A Buyer's 11-Point Contract Review Checklist
PurchTips edition #317
Are You Using A Checklist To Review Your Contracts?
Every contract seems to provide adequate protection when it is negotiated and signed. However, during contract performance, disputes often arise between buying organizations and their suppliers. This checklist is designed to help you review your contracts before signature so that you avoid some of the most common procurement contract pitfalls.
- Make sure all prices include a unit of measure.
- Make sure that pricing is either expressed as fixed or that the circumstances and methods for pricing changes are specified.
- Make sure that the Force Majeure clause does not contain any unreasonable excuses for the supplier's failure to perform.
- Make sure that the warranty clause specifies the applicable remedy or remedies for failure and includes the time frame in which each remedy is required.
- Make sure that the time that the warranty begins is adequately specified as there are many options.
- Make sure that the limit of liability provision applies to your organization, not just the supplier.
- Make sure that the confidentiality provision protects your organization's intellectual property, not just the supplier's.
- Make sure that the indemnity provision protects your organization, not just the supplier.
- If the time frame for payment and/or delivery is specified in days, ensure that it is clear when the counting of days begins as there are many options.
- Make sure that how the word "days" is to be used is adequately defined as there are many options.
- Make sure that you follow your organization's policies for having contracts reviewed by an attorney.
Do You Want a More Rewarding Procurement Career?
Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.
Earning your SPSM® Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM® Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!
Need Better Performance From Your Procurement Team?
Are you a procurement leader whose team isn't achieving the results you know are possible? Maybe it's not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.
You need a performance improvement plan that's easy to implement and quick to produce results. The NLPA can help.
Download our whitepaper "The Procurement Leader's Guide To A More Successful Team." You'll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.
Are You Getting The Most Out of Your NLPA Membership?
Members of the NLPA get more than just articles like this by email. As a member, you also get access to:
- The Procurement Training & Certification Starter Kit
- The latest Purchasing & Supply Management Salaries Report
- Leading-Edge Supply Management™ magazine
- Members-only webinars 10x per year
- And more!
If you haven't been taking advantage of these benefits, why not log in and start now?
Copyright 2014. This article is the property of Next Level Purchasing and may not be copied or republished in any form without the express written consent of Next Level Purchasing.
Click here to request republishing permission.