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DO YOUR COMPANY’S SALES AND PURCHASING DOCUMENTS CREATE UNNECESSARY LEGAL RISK?
If your company manufactures products or buys and sells goods,
a string of recent lawsuits suggests that you should take a close look
at your sales and purchasing forms and procedures.
Proper sales and purchasing documentation could potentially save
your company thousands of dollars in unnecessary legal costs.
Several lawsuits our firm has recently defended involved situations
where a seller failed to respond properly to a purchase order.
The seller simply began to work on the project, not realizing
that the purchase order’s fine print bound them to unfavorable
terms and conditions. Later, when the customers sued over supposedly defective work,
the sellers found themselves defending against claims and damages never
previously considered.
In two recent cases we have defended, the buyers claimed damages
greater than the sales price.
In one case, a seller found itself subject to the laws of a foreign
jurisdiction. In another
case, a buyer denied ordering additional services and refused to pay
for them, even though the seller had already completed the work!
Representing the seller, we prevailed in one case that went to
trial (the other cases settled). However, these problems could have been avoided.
Many companies - even highly successful ones - use outdated or
"off the shelf" forms and do not pay enough attention to documentation.
Simplified procedures and up-to-date sales and purchasing documentation
can reduce risk and limit liability and collection costs. What to do? 1) Review your company’s sales and purchasing forms. If your forms have not been periodically revised, new terms can be added which will benefit your company when conflict inevitably occurs. 2) Implement procedures to make sure your company does not find itself accidentally subject to unfavorable terms and warranties. Train your sales and purchasing professionals to spot problems before they develop. |
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