Structuring Supply Chain Agreements: New Guidance on Prop 65 Compliance

California's amended Proposition 65 requires manufacturers and retailers to provide any consumer in the state with a "clear and reasonable" warning before exposure to specific chemical components. The regulation imposes the new warning requirements on all participants in the product supply chain, expecting distributors, importers, manufacturers, packagers, producers, and suppliers to carry equal weight with retailers in the duty to warn consumers.

Counsel for parties along the supply chain faces the challenge of ensuring compliance, sometimes without information about the chemical components in the products for sale. Parties upstream in the supply chain have first-hand knowledge and can readily comply with warning requirements. Businesses operating between the manufacturer and retailer--the middlemen--may be left exposed, and counsel should advise on obtaining agreements with manufacturers for details about chemicals in the products so they can fulfill the duty to inform the retailer.

Listen as our distinguished panel discusses best practices for structuring supply agreements to comply with Prop 65, critical guidance on key terms, risk-shifting measures, and drafting pitfalls.

1. Overview of Prop 65
   1. Warnings
   2. Compliance requirements
   3. Impact of supply chain
2. Drafting pointers
   1. Ensuring compliance
   2. Limiting/transferring risk
   3. Agreement supplements and addenda
3. Party perspectives
   1. Upstream parties
   2. Downstream parties

The panel will review these and other relevant issues:

• How can counsel address vagaries in inter-supply chain information requests in achieving compliance?
• What measures can counsel for parties along the supply chain take to limit exposure to the statute's private attorney general provision?
• What risk-shifting measures can counsel use in drafting supply agreements to limit exposure under Prop 65?