As procurement assumes greater responsibilities in the organization, the ability to competently identify, apportion, and negotiate risks with each supplier becomes increasingly important.
The contract is the major tool by which risk is addressed and allocated between the purchasing organization and supplier.
Business people assume clauses such as Warranty, Limitation of Liabilities and Indemnity are “legal” issues only. They’re generally bewildered by these clauses and relinquish control to the legal department. These – and other – clauses all relate to: Identifying real world risks in a transaction, Negotiating who will accept the risk and to what extent, and Determining who will pay the money (damages) on the occurrence of a particular event.
If procurement is to become an equal player in the senior management arena, the procurement professional must be able to “speak” the language of risk allocation and management within the contract.
This presentation will provide clear explanations of the underlying issues, practical approaches to negotiating, and answer frequently asked questions relating to the following clauses:
• Warranty
• Limitation of Liability
• Indemnification
• Termination: Business Continuity and the Exit Plan