Contracting Starts Before You Have a Contract

  • The contract process starts before you identify a customer, supplier, service provider, etc.
  • A contract is your opportunity to define with certainty:
  • What you will receive, when, and for how long?
  • What you will provide, when, and for how long?
  • Who will have responsibility for known potential risks and liabilities?
  • To answer those questions, you need to think through your business and what you are trying to accomplish.
  • What is important to your business?
  • Do my contracts accomplish what I need for my business?

Documenting the Deal

  • Legal & Business teams need to work together
  • Appropriate documentation will depend on what is being done:
  • Master Services or Supply Agreement (MSA)
  • Purchase Orders (POs) – usually subject to terms of MSA, but can be stand alone
  • Additional clarity and terms through company policies
  • If there is no MSA, and only a PO, you need to protect yourself as appropriate:
  • Suppliers: Ensure that your legal terms are incorporated into the PO by attaching or linking to terms and conditions or reference company policies
  • Customers: Be aware of legal terms built-in to the POs within a link or in small print

Documenting the Deal: Purchase Orders

  • POs typically contain the key business and financial terms of the deal:
  • Detailed description of the product(s) and/or service(s)
  • Price, fees and payment terms
  • Delivery/shipping terms; inspection rights
  • Term or date due for performance
  • Unique business terms
  • Suppliers should have standard forms
  • Consult with legal team about any changes to legal terms that would conflict with the MSA

To see the full article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.