I hope that you have enjoyed the article “Remedies For Supplier Screw-ups, Part II.”

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In Part I of the series, I wrote that “If a supplier’s product fails to comply with acceptance criteria, there are five common contractual remedies that procurement professionals use: replacement, supplier repair, self-repair, refund, and contract termination.” I gave two checklists to guide your use of the first two remedies in Part I and two more checklists to guide your use of the third and fourth remedies in Part II. Today, I will provide the last checklist, which is related to contract termination.

If contract termination is your chosen option:

  • Do you need to give the supplier the opportunity to fix the problem prior to invoking your right to terminate the contract?
  • If you terminate the contract and you paid a deposit, what percentage of that deposit will you be entitled to recover?
  • If you terminate the contract and deposit money is owed to you by the supplier, how soon must the supplier pay you?
  • If you terminate the contract, how much money (if any) will you owe the supplier for work performed but not completed?

That wraps things up for this series. I hope that you never have to deal with supplier screw-ups. But, if you do – and, let’s face it, you probably will at some point in a long procurement career – I hope that you’re prepared with some contractual remedies that will make your recovery from those screw-ups much less painful.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer
Next Level Purchasing Association (NLPA)
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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