Sourcing Transactions: Structuring Key Terms and Obligations

Drafting and Negotiating Purchasing Volume, Forecasting Methodology, Pricing Discounts, and Contract Management Processes

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, July 7, 2016

Recorded event now available

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Program Materials

This CLE webinar will provide supply chain and commercial counsel with best practices for drafting and negotiating master purchase agreements and blanket purchase orders in sourcing transactions. The panel will discuss case law regarding when such documents bind the parties to quantities, pricing and delivery terms. The panel will also outline approaches to drafting clauses around purchasing volume, pricing discounts, term and termination, and inventory and lead time requirements to minimize your client’s or company’s legal risks.

Description

Supplier agreements based on master purchase agreements and blanket purchase orders can benefit purchasers by offering discounted pricing, administrative cost reductions, and streamlined order processing and lead time. These high-dollar, longer-term contracts reflect aggressive volume targets and give suppliers more control over inventory management and forecasting.

Legal and commercial risks abound in utilizing blanket POs for suppliers and purchasers. Fixed pricing for the term of the agreement burdens both parties with pricing risks if market conditions or input material costs change.

Counsel for both sides must ensure precise language in provisions for volume, discounts, term and termination. Just as important, counsel must undertake a thorough contract management process to ensure orders are processed in accordance with the terms of the agreement and not continued after the agreement’s expiration.

Boilerplate language and standard forms often lead to ambiguities and disputes, requiring counsel’s careful drafting and negotiation tailored to the clients’ best interests.

Listen as our experienced panel explains how counsel can help clients leverage the benefits of blanket PO agreements in business transactions and provides best practices for drafting key provisions for termination, purchasing volume, price adjustments and more.

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Outline

  1. Comparisons between different contracting forms, advantages and disadvantages
  2. Supplier risk: How termination clauses and price adjustment clauses can prevent disasters
  3. Purchaser risk: How to manage minimum purchase guarantees that can lead to breach claims
  4. Contracting pitfalls and solutions

Benefits

The panel will review these and other key issues:

  • When should a master purchase agreement or blanket PO be used for business transactions?
  • What are the key terms in these documents?
  • How should counsel proactively address orders placed against expired contracts or POs?
  • How can counsel anticipate and resolve potential breach claims that may arise from conflicts involving master purchase agreements and blanket POs?

Faculty

Momkus, Edward
Edward J. Momkus

Member
Momkus McCluskey

Mr. Momkus concentrates his practice in complex business transactions, mergers and acquisitions, corporate law,...  |  Read More

Tricia A. Sherick
Tricia A. Sherick

Partner
Honigman Miller Schwartz and Cohn

Ms. Sherick’s practice involves representing original equipment manufacturers and Tier 1 suppliers in the...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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