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How Contracts Help Improve Supplier Performance

Published: July 8, 2019

Category: Contract Draft/Review

By: David Cui


China is striving to create a business friendly environment characterized by predictable legal enforcement of contractual rights. This is crucial for buyers of services and important products from China. Although no buyer is willing to enforce his contractual rights through litigation or arbitration, as a buyer of goods, it is very important to know what rights he has and the potential risk of the supplier's failure to fulfill his obligations, which can actually reduce the possibility of litigation.


In short, if the supplier fails to fulfill its obligations, the business operation of the buyer may be affected. This article will give you an overview of the buyer's rights under the contract, which is particularly important for those who buy goods from China.


First, you have to determine exactly what your supplier's obligations are. If you do not have a contract with the supplier, they may not owe you any obligation at all. Or the agreement does not contain all the necessary commercial terms, and the failure to properly record the key commercial terms in the agreement will often lead to disputes over the performance of the contract in the future.


While nothing in a contract should be ignored, the five areas discussed below are usually the most critical considerations when it comes to buyer's rights.


Supply

For the on-going supply arrangement, you should determine whether the supplier is obliged to accept your purchase order. For example, if you send a PO to a supplier, are they obliged to accept your order?

Usually, suppliers want to be flexible in rejecting orders. Suppose you are negotiating a supply agreementin this case, if you are the person ordering these goods, you may want to include the supplier's obligation to agree to provide the minimum quantity.


Delivery

Does the contract stipulate the delivery date? If you set a delivery date, some contracts may include you are entitled damages for each day of delay. Usually, if the supplier cannot promise to deliver within a certain time, you should redraft this in your contract with the supplier.


Defect

Does the contract stipulate what the supplier will do if the goods you buy are defective? In addition, is there a warranty attached to the goods, or is there a guarantee that the goods meet a certain standard? Ideally, if the goods are defective, your contract should provide that you have the right to return the goods and get a refund, replacement or L / C guarantee. This will avoid causing loss to your company.


Insurance and risk

Does the contract stipulate that the supplier is obliged to insure the goods before delivery? When will the buyer be responsible for the possible damage to the goods? It is important to know who will be responsible for the damage of the goods in transit.


It is assumed that the supplier is obliged to insure the goods in transit. If the goods are damaged in transit, can you believe that the supplier has the ability to claim against their insurance company.


The above content involves some common supply obligations contained in the contract. If you have signed a supplier, you should review your supply contract to determine what obligations your supplier owes you and what rights you can have against your supplier if they fail to fulfill those obligations. If you are considering choosing a supplier, please keep these points in mind before signing the supply contract.


What is force majeure? Why is it relevant?

Supply contracts usually include provisions referring to force majeure. Generally speaking, force majeure is a kind of event which is beyond the reasonable control of one party. However, if the contract eventually contains force majeure, the contract should provide a specific definition for the scope of force majeure.

Force majeure is important because suppliers usually include a force majeure clause in their contracts to exclude their liability for their obligations under the contract; or if the force majeure event lasts for a period of time, they have the right to terminate the contract.


Thus, the buyer of the goods should review his supply contract to determine the extent to which the force majeure clause may limit his rights under the contract.


Why do I need contractual rights?

Enterprises should consider how to protect their own interests in the supply arrangement. This is important to ensure that you get the benefit of the supplies from the supplier. Moreover, maintain your business operations. If there is a problem with your supply of goods, it may affect your own operation and obligations to the relevant downstream customers. Finally, the contractual rights in the supply contract will allow you to ensure that the goods you buy meet certain standards and quality.


如何完善供应协议下买方权利的条款


中国正在努力创造一个有利于商业的环境,其特点是合同权利的可预见的法律执行。这对于来自中国的服务和重要产品的买家来说至关重要。虽然没有买方愿意通过诉讼或仲裁来强制执行合同权利,作为货物的购买者,了解自己有哪些权利及供应商未能履行其义务的潜在风险非常重要这可以实际上降低产生诉讼的可能性。


简单地说,如果供应商未能履行其义务,货物购买者的业务运营可能会受到影响。本文将为您概述买方在合同下的权利,这对那些从中国购买商品的买方来说尤其重要

供应商的义务是什么?


首先,你必须确定你的供应商的义务到底是什么。如果您没有与供应商签订合同,他们可能根本不欠您任何义务。或是协议并不包含所有必要的商业条款未能妥善记录双方协议中的关键商业条款,往往会导致未来对合同履行的争议。


虽然合同中的任何条款都不应被忽视,但在关注买方权利时,下面讨论的五个方面通常是最关键的考虑点。


供应

对于正在进行的供货安排,您应该确定供应商是否有义务接受您的供货要求。

例如,如果您向供应商发送货物订单,他们是否有义务接受您的订单?

通常,供应商希望能够灵活地拒绝订单。假设你正在谈判一份供货协议。在这种情况下,如果您是订购这些货物的人,您可能希望包括供应商同意提供最低数量货物的义务。


送货

合同是否规定了交货日期?如果您设定了交货日期,有些合同中可能会包含您在交货延迟的的情况下每一天获得损害赔偿的权利。通常,如果供应商不能承诺在一定的时间内交货。你应该在与供应商的合同中注意这一点。


缺陷

合同上有没有规定如果你所购买的货物有缺陷供应商会怎么做?此外,货物是否附有保证书,或保证货物符合某种标准?理想情况下,如果货物有缺陷,你的合同应规定你有权退货并获得退款、更换或信用证担保。这将避免给贵公司造成损失。


保险与风险

合同中有没有规定供应商有义务在交货前为货物投保?方何时对货物可能发生的损坏负责?重要的是要了解谁将对货物在运输途中的损坏负责。


假设供应商有义务在运输途中为货物投保。如果货物在运输途中损坏,你是否能够相信供应商有能力向他们的保险公司提出索赔。


上述内容涉及合同中包含的一些常见供应义务。如果您已经签了供应商,您应该审查您的供应合同,以确定您的供应商应向您承担哪些义务,以及如果您的供应商未能履行这些义务,您可以对他们享有哪些权利。如果您正在考虑选择供应商,请在签订供货合同之前牢记以上几点。


什么是不可抗力?为什么与此相关?

供应合同通常包括提及不可抗力的条款。一般来说,不可抗力是一种发生的事件,超出了合同一方的合理控制。但是,如果合同最终包含不可抗力,合同应当为不可抗力的范围提供一个具体的定义。


不可抗力是很重要的,因为供应商通常在其合同中包含不可抗力条款,以便排除他们对合同规定的义务的责任;如果不可抗力事件持续一段时间,他们有权终止合同。


由此货物的买方应审查其供应合同,以确定不可抗力条款可能在多大程度上限制其在合同下的权利。


为什么我需要合同权利?

企业应该考虑如何确保在供应安排中保护自己的利益。这对于确保您从供应商处获得货物的利益是很重要的。同时,维护您的业务运营。如果您的货物供应有问题,这可能会影响您自身的经营和对相关下游客户的义务最后,供应合同中的合同权利将允许您确保您所购买的货物符合一定的标准和质量


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