Description
Manufacturers along the supply chain use long-term requirements contracts to lock in middle-link buyers and other sub-tier component suppliers over the long term, ensure attractive supply volumes throughout the life of the agreement, and obtain cost-effective products designed according to specifications.
The Uniform Commercial Code (UCC) Section 2-306, which governs requirements contracts, requires buyers to place their orders for amounts determined in good faith or, depending on the jurisdiction, close to a stated estimate if one exists in the requirements agreement. On its face, Section 2-306 seems relatively straightforward. However, courts around the country have applied the statute in different ways.
Given the varying court interpretations of Section 2-306 and nuances in supply chain contracting, several grey areas are surrounding the drafting and enforcement of long-term requirements agreements. Counsel negotiating the contracts for suppliers must anticipate market fluctuations and allocate contractual risk to protect their clients. International requirements contracts, governed by the Convention for the International Sale of Goods (CISG), are governed by still different rules.
Listen as our panel of attorneys experienced in negotiating and litigating requirements contracts discusses best practices for drafting, negotiating, and enforcing these agreements. The panel will discuss specific clauses that should be included in negotiations and provide strategies for avoiding contracting pitfalls.
Presented By
Mr. Fromm specializes in business contracts, litigation, supply chain agreements, negotiations, disputes, warranty and recall litigation, and state and federal compliance issues. He has successfully represented and counseled clients in a significant number of state and federal lawsuits, arbitrations, and multiple consumer class actions. Mr. Fromm also has extensive experience in representing multiple Fortune 500 corporations, automotive companies, manufacturing companies, and private clients throughout all phases of complex litigation involving product liability, wrongful death, negligence, contract, warranty, and indemnity disputes, insurance-coverage disputes, and compliance and regulatory issues involving various state and federal agencies.
Ms. Hutchinson offers a broad range of corporate counseling and transactional services to clients of all sizes but focuses her practice on serving the needs of in-house law departments. She has deep expertise in a variety of commercial matters, including antitrust, trade and price counseling, litigation oversight, negotiating and drafting supply and sale-side contracts, brokerage agreements, distribution agreements, marketing and advertising, sweepstakes, joint development agreements, research agreements, food law and labeling, issues management, M&A and minority investments. Ms. Hutchinson was formerly in-house at General Mills where she spent over a decade working on a wide range of legal matters in marketing, sales, supply chain and antitrust counseling.
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
-
Date + Time
- event
Thursday, January 16, 2020
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Drafting risk allocation provisions that address common scenarios/challenges
- Schedule delays
- Escalation
- Minimum quantities
- Amendments and variations
- Expected and estimated purchase levels
- Changes to lead time
- "Notice of requirements reduction" provisions
- Avoiding and/or addressing contractual and enforcement pitfalls
The panel will review these and other key issues:
- What are the benefits and legal risks with long-term requirements contracts?
- What is the role of the stated estimated and expected levels of purchases in a requirements contract?
- How can businesses best mitigate risk when drafting and negotiating long-term requirements contracts?
Related Courses
AI Vendor Contracts: Data Rights, IP, Risk Allocation, and Compliance
Available On-Demand
Structuring M&A and Private Equity Transactions Involving ESOPs
Available On-Demand
Structuring Acquisitions of Family-Owned Businesses
Available On-Demand