Supply Chain Agreements: Consequential Damage Disclaimers, Indemnity, Force Majeure, Termination, Warranty Provisions

Description

Like all contracts, supply chain agreements devote considerable planning to address and allocate the risks of disruption and nonperformance. The potential for supply chain disruptions is vast, which has been underscored by the COVID-19 climate. Buyers and sellers must anticipate and implement protections in the wake of global disruptions from tariffs, trade wars, and the pandemic.

A high priority consideration for practitioners is the interplay between various terms intended to mitigate/transfer risk in the transaction through warranty terms, damages disclaimers, and limitations on liability. In addition, counsel must carefully craft indemnity provisions to fend off claims from third parties.

Other critical terms include termination rights and force majeure clauses, which should take into account the realities for the particular supply and distribution channels. Key considerations include sole-sourced exclusive supply agreements, the geographic location of suppliers, time to ramp-up an alternate supplier, and potential events outside of the parties’ control.

Listen as our expert panel provides critical insight on how to avoid pitfalls in crafting and implementing these essential terms for clients. The panel of attorneys brings a wealth of experience in the structuring and negotiation of supply agreements.