Strong agreements benefit both parties by reducing uncertainty, encouraging performance through measurable standards, and providing defined consequences for nonperformance. They can preserve critical business relationships, secure remedies for defects or late delivery, and limit exposure through liability caps, indemnities, and clear insurance requirements.
When contracts include clear performance standards, acceptance testing, and remedial timelines, businesses can resolve issues faster and minimize the impact of supplier failures through defined remedies and escalation paths that preserve production schedules and customer commitments.
We work with owners and procurement teams to translate commercial objectives into enforceable contract terms, negotiating fair pricing, delivery schedules, warranty obligations, and remedies that support ongoing operations and reduce potential disputes with suppliers.
Establishing escalation steps, mediation pathways, and clear documentation practices helps resolve disagreements quickly and preserves supplier relationships when possible, limiting the need for formal litigation and minimizing operational disruption.
Review payment terms, delivery and acceptance criteria, warranties, limitation of liability, indemnity, termination rights, and applicable law to ensure the contract aligns with your commercial expectations and operational capacities. Also check insurance requirements, confidentiality obligations, intellectual property ownership, and dispute resolution clauses. Ensuring clarity on these points reduces ambiguity, supports enforcement, and helps prevent disputes that can interrupt supply and operations.
Limiting liability can be achieved through carefully drafted caps on damages, exclusions for indirect or consequential losses, and linking potential exposure to available insurance. Reasonable limitations help protect financial stability while remaining commercially acceptable to suppliers. Negotiation of balanced liability provisions and mutual indemnities often preserves business relationships. Demonstrating good faith through fair contract terms and offering alternative protections like liquidated damages or escrows can make liability limits acceptable to counterparties.
Begin by documenting missed deliveries and communicating expectations in writing, invoking any existing cure periods or corrective action plans in the contract. Early, documented communication often preserves the relationship while prompting supplier remediation. If failures continue, rely on contract remedies such as replacement, repair, price adjustments, liquidated damages, or termination. Consider escalation to alternative sourcing or formal dispute resolution when necessary to protect customers and operations.
Require insurance where third-party claims, property damage, or product liability risks exist, and align coverage amounts with potential exposure. Indemnity provisions shift specific risks back to the party best positioned to control them, subject to negotiation and insurance availability. Carefully define the scope of indemnity and ensure insurance certificates and additional insured endorsements are verified. Reasonable insurance and indemnity obligations protect both parties and make recovery from third-party claims more predictable.
Force majeure clauses excuse performance when extraordinary events prevent fulfillment, but they usually require prompt notice and mitigation efforts. The clause should define covered events, timelines for notice and remedy, and whether relief is temporary or leads to termination. Well-drafted force majeure language balances fairness by allowing for suspension or extension of obligations while providing mechanisms for termination when disruptions are prolonged, protecting both buyer continuity and supplier fairness.
Service level agreements and performance metrics establish objective standards for delivery, quality, and responsiveness that drive accountability. Including remedies tied to performance metrics encourages consistent service and gives purchasers clear remedies when standards are not met. SLAs should be measurable, realistic, and tied to operational realities. Metrics need clear measurement methods, reporting requirements, and agreed remedies to ensure meaningful accountability without incentivizing short-term behavior that harms long-term relationships.
Assignment clauses determine whether contracts can be transferred upon a sale or change in control. Many agreements restrict assignment without consent, so review these provisions early in a transaction to avoid surprises during a sale or reorganization. Negotiating carve-outs for permitted assignments to affiliates or in connection with a sale of substantially all assets can preserve transactional flexibility while respecting the counterparty’s need to control who performs under the contract.
Protect intellectual property by clearly specifying ownership of developed materials, licenses granted, and permitted uses. Confidentiality provisions should define protected information, permitted disclosures, and duration of obligations to safeguard trade secrets and proprietary data. Include return or destruction obligations for confidential materials and remedies for breaches. Thoughtful IP and confidentiality provisions preserve value, encourage collaboration, and limit unauthorized use or disclosure of sensitive business information.
Typical remedies for defective goods include repair, replacement, credit, or refund, along with specific inspection and rejection procedures. Contracts should set reasonable cure periods and outline the process for determining whether goods meet agreed specifications. In addition to direct remedies, parties may negotiate liquidated damages for predictable losses or retain termination rights for repeated failures. Clear remedial paths reduce disputes and facilitate quick resolution that keeps operations moving.
Contract duration should reflect the commercial relationship and include review points to reassess pricing, performance metrics, and legal compliance. Evergreen agreements with periodic price adjustment mechanisms can work for ongoing relationships but require clear notice and amendment procedures. Review vendor agreements when business models change, suppliers consolidate, regulations evolve, or significant price or quality issues emerge. Regular contract reviews help maintain alignment between commercial realities and contractual protections.
