PRICING
- Price
- Price type (e.g., fixed, time and materials, etc.)
- Not‐to‐exceed amount of time and materials pricing
- Duration of price validity
- Whether or not price will be adjustable throughout the term of the agreement
- If the price is adjustable, which index or indices will be used in a price adjustment formula
- A price adjustment formula
- Rebate percentage for purchases that exceed specified amount
- Most favored nation’s clause
- Discount percentage for items not specifically priced in the contract
DELIVERY & SERVICE LEVELS
- Response time requirements
- Lead time
- Liquidated damages for late delivery
- Applicability of cover damages in the event of late delivery
SHIPPING
- Shipping method
- Choice of freight carrier(s)
- Where risk of loss transfers during shipment
- Who pays for freight charges
- Who pays for freight‐related insurance
- Data requirements for packing slips
- Drop‐shipping option
PAYMENT
- The point at which the payment due date is triggered (e.g., delivery date, service completion date, invoice date, etc.)
- Number of payments involved
- Number of days in which payment is due
- Discount for early payment
- Interest charges for late payment
- Process for resolving invoice disputes
- Payment terms for supplier reimbursement
WARRANTY
- Point at which warranty period begins
- Length of warranty
- Remedies for warranty failure
- Labor rate to be used for in‐house warranty repair reimbursement
- Shipping terms for warranty returns
- Warranty failure cure period
TERM & TERMINATION
- Term of agreement
- Option to extend the agreement
- Number of days’ notice required to exercise option to extend the agreement
- Whether termination for convenience is permitted and, if so, by both parties or just buying Organization
- Notice period required for termination for convenience
- Termination for default
- Cure period for default
- Number of cured defaults that will still provide buying organization with right to terminate the agreement
- Material adverse changes clause
GENERAL & INFORMATION REQUIREMENTS
- Number of units to be purchased
- Packaging requirements
- Specifications/scope of work
- Products and/or services covered by the contract
- Record retention requirements
- Reporting requirements
- Cost breakdown disclosure
SUPPLIER OVERSIGHT
- Right to audit supplier facilities
- Right to audit supplier financial records
- Protocol for official notices regarding the contract
- Right to subcontract
- Required approvals of subcontractors
- Supplier diversity subcontracting requirements
LIABILITY & LEGAL MATTERS
- Applicability of consequential damages
- Supplier’s limit of liability
- Buying organization’s limit of liability
- Indemnity clause protecting buying organization
- Indemnity clause protecting supplier
- Confidentiality terms related to buying organization’s intellectual property
- Confidentiality terms related to supplier’s intellectual property
- Types of insurance required of the supplier
- Insurance limits required of the supplier
- Acceptable Force Majeure events for buying organization
- Acceptable Force Majeure events for selling organization
- Choice of law
- Dispute resolution method
- Who selects arbitrator or mediator in the event of dispute
- Location of arbitration or mediation
- Association required of arbitrator or mediator
- Requirements for amending the contract
- Whether “days” is considered business days or calendar days
- Days that are excluded from normal “business days”
VALUE‐ADDED SERVICES
- Right to use buying organization’s name on supplier’s customer list
- Exclusivity
- Participation in a continuous improvement process
- On‐site supplier representative/integrated supply
- Supplier development program
- Standardization/rationalization of stock keeping units (SKU’s)
- Supplier expansion financing/pre‐payment
- Free product training
- Employee discount program
- Consignment inventory program
- Vendor managed inventory program
SOCIAL RESPONSIBILITY
- Applicability of a supplier code of conduct
- Prohibition of supplier’s involvement in human trafficking Act, if applicable
- Prohibition of supplier’s use of coerced labor
- Age requirements of supplier employees
- Safety standards for supplier and supplier’s subcontractors’ facilities
- Maximum number of working hours permissible for supplier employees
- Standards for humane treatment of employees
- Standards for working conditions
- Standards for humane treatment of animals
- Prohibition of bribery and corrupt practices
- Environmental standards
- Prohibition of the supplier’s use of conflict minerals
- Required benefits for supplier employees
- Supplier commitments to reforestation
- Supplier use of recycled materials