Case Study: Negotiate Major Purchase Order Agreement Terms

Evahan Assists Decrolux in Negotiating Major Purchase Order Agreement Terms

After accepting a Request for Tender Proposal, Evahan supported the rapidly expanding lighting pole manufacturer, Decrolux, in negotiating key commercial and engineering terms of a Major Purchase Order Agreement with an international infrastructure builder.

Commercial Terms Requiring Negotiation

1. Increase in Quoted Tender Price: Adjustments to account for technical engineering changes.
2. Adjustment of Delivery Dates: Provisions for delays outside the supplier's control, including acts of prevention by the contractor.
3. Entitlement to Payment: Ensuring payment for goods provided, even if they contain some defects or are delivered late.
4. Bona Fide Claims: Requirement for claims to be genuine before setting off moneys payable.
5. Opportunity to Remedy Defaults: Allowing the supplier a chance to remedy defaults before the contractor intervenes.
6. Limitation of Indemnity: Restricting indemnity to third-party property damage, personal injury, illness, and death.
7. Exclusion of Contractor's Liability Limit: Ensuring the contractor's limit of liability does not apply to payments arising from a breach of the agreement.
8. Variation Proposals: Deleting the requirement for proposals to be on an "open book" basis.
9. Termination of Agreement: Providing the supplier an opportunity to remedy defaults before the contractor can terminate the agreement.
10. Nuisance and Interference: Inserting "unreasonable" before these terms.
11. Excessive Indemnity Clauses: Deleting such clauses.
12. Exclusion of Certain Claims: Ensuring specific claims are excluded from certain provisions.
13. Incomplete Schedules: Reserving comments until schedules are fully detailed.

Engineering Terms Requiring Negotiation

• Technical Specification: Agreement on the technical specification of the product, particularly related to footing design.