Best Practices for Contract Administration and Other Terms and Conditions Pointers

Did you hear the one about the sales person who faxed a quote to a customer? The company’s terms and conditions, which were on the reverse side of the page, didn’t quite make it. Ultimately, the customer had a warranty claim and, since the company never actually sent its terms and conditions to the customer, the customer’s terms and conditions applied. Guess what? They weren’t very friendly from the company’s point of view.

This situation, and similar ones, is a lot more common that you might think and can be addressed by putting in place some simple standard operating procedures when it comes to contract administration. Here are my top five suggestions:

1. Make sure the company’s standard terms and conditions have been reviewed by counsel. Terms and conditions are the starting point under the Uniform Commercial Code’s “battle of the forms,” and they need to be as ironclad as possible.

2. Advise sales people what legal terms they can and cannot change without approval so that they don’t end up giving away the “legal farm” to make a sale.

3. Protect “form” terms and conditions so that negotiations don’t start from a prior negotiated, and watered-down, version.

4. Implement procedures to make sure exhibits are attached where necessary and that you maintain a good file of all signed contracts.

5. Educate sales people on basic Uniform Commercial Code and battle of the forms issues so they can judge when to bring in legal counsel and when to go it alone.

Contracts can be a bit of a headache, but good contract administration can help avoid a migraine in the future.

Kimberly J. Decker, Esq
Barley Snyder, LLC

Explore posts in the same categories: Corporate Counsel, Kimberly J. Decker

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