ISM 2009: Look carefully at contract terms, ISM attendees told
Contract terms can trip you up and tie your hands
By Paul Teague -- Purchasing, 5/5/2009 3:23:00 PM
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Jim Haining, purchasing administrator for Clark County, Nevada, told ISM 2009 attendees today that they need to make sure they mind their Ts and Cs in contracts less they are put at a disadvantage with suppliers.
Suppliers will try to structure terms and conditions to favor them, he said. Purchasing’s job is make sure that doesn’t happen.
The first step, he said, was to determine the purpose of the contract and when in the buying process to introduce the contract. Then, purchasing should make a checklist of the important areas to consider in the contract.
Among critical items to review before drafting contracts, he said:
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A list of all legal and business issues
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A list of understandings already reached
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All correspondence up to that point
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Any inconsistencies in the contract
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Insurance and insurance certificates
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Indemnification
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Governing law—make sure it’s the laws in your state that govern the contract, not the supplier’s state
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Intellectual property
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Payment terms
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Warranties
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FOB issues
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Confidentiality
<<Back to ISM 2009 Conference coverage
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