This is a frequent request. My company specifically carves indemnity obligations out of the LOL, along with breaches of confidentiality, etc. It makes little sense to subject indemnification to conditions such as fault or negligence which can be difficult to prove.
If the supplier is insistent, and there are no alternative suppliers, you might propose a very high indemnity cap. Depending on your industry, you can look at the types of court awards given and use that as a guideline. The indemnity cap should be a separate item than the LOL in the contract, so it is clear that the items which may trigger liability have no impact on indemnification.
Hope this helps,
Usually there is always a cap on the liabilities and I have never expereinced this cap more than the PO value. But this cap carves out the Supplier's liabilities covered under Insurances.
The Indemnities must be from both parties and must have excluded the 'Willful Misconduct or Grss Negligences'. The LOL and the Indemnities can be merged together depending upon the risk exposure to both parties.
I'm not sure if this will help but the University of Northern British Columbia in Canada does alot of clinical research. They have partnered with the local Health Authority so there may be someone there that may be able to help you. Their site is www.unbc.ca.
- you are the reseller, and want to enter an agreement with Microsoft? or
- you are a Microsoft reseller, and want to enter an agreement with a client/licensee? or
- you are a client/licensee and want to enter an agreement with a Microsoft reseller?
If you are a client/licensee, the reseller will provide a standard Microsoft template for you to review and accept. In most cases, the key terms and conditions in the agreement are non-negotiable.
And the reason for that inflexibility is because the scenario is usually one of a back-to-back agreement. The reseller cannot give you the client something that they did not get from Microsoft. The agreement between Microsoft and the reseller will indirectly limit the agreement that the reseller passes through to the client. This back-to-back scenario is not limited to Microsoft. It holds true in other technology agreements, but also Engineering, Manufacturing, and other industries.
It appears to me that the customer wants their project team to travel to the US executive style and is prepared to pay for it. I do not see this as a problem in itself. However, I will be concerned about why the customer wants it included in the bid price.Is this going to be transparent in the customer's budgeting and financing process? Is it going to be in contravention with the customer's policy and procedures or with the country's regulations or accepted practices? Is it common practice for the company's project team to travel in the manner described? These are some of the questions that I will want answered before deciding on the request.
• Saab AB
Thank you for your quick reply. It confirms that I am on the right track in requesting confirmation that the per diem is sanctioned under their own procurement guidelines and per diem rules. I will also inquire about common practice, etc. Fortunately, we have time to work through these details.
Do you have any suggestions on how to handle this if it is acceptable? Obviously, we cannot hand out enveloped of cash.
• ArcBlue Consulting Group
I have also seen this in the UK too. Due to the long supply chain (end client, developer, main contractor, consultant, then us as the subbie), it was difficult to ascertain who the ultimate demander was. The pretext was that this was a necessary inspection/qc visit. Mmmmm. I'm all for on-site expediting of important items, and witnessing critical tests, but the right people need to go, and you dont need 8 witnesses! I wanted to have independent 3rd party expediting & inspection, with maybe a visist from those who would be responsible for operating/maintaining the equipment. In my view the others were corporate tourists.
The fact that the client did not want to book their trip through the usual channels, speaks volumes. If it was a valuable trip, then why not pay directly? To hide the cost in a subcontract, with all the %age mark-ups as the cost passes through the chain, just seems iffy, unless I'm missing something obvious.
At the very simplest of tests ("would you be comfortable for this to appear on the front page of your national newspaper"), you seem to be facing a problem.
Time will tell if you are being asked by your client to effectively reduce your rates or to increase the cost to the client to absorb the cost... it does seem that the per diem request is coming after the pricing of the deal has been closed.
However, this is not the point, the request does seems like an invitation to make an inducement. Your corporate counsel should be involved for their views on FCPA etc.
I do agree with your initial request to your client for contractual transparency as this may itself amend or eradicate the request.
To paraphrase Ian Heptinstall, it smells iffy.
• Parker Hannifin Corporation, Aerospace Group
While I realize that this is a commercial contract, it would not be unreasonable to use the U.S. Government Guidelines regarding travel, meals, and per diem rates. Requesting the amounts below appear to be excessive. However, if nothing else, complete transparency is essential to ensure there is not the sligtest hint of impropriety or this being considered a "gift."
• Wood Group
I would say that if it smells like a fish, swims like a fish or looks like a fish, then it most likely is a fish. If there is even a hint of impropriety or it falls into the shades of grey of ethics, then I would say err on the side of caution.
I wold suggest to entertain, if its inevitable, the request by dealing it a stand alone entity, i.e. to be priced and invoiced separately and use services of your corporate travel agent to directly deal with the Client. There is strong inference of kick backs (though you will be paid for the services rendered but not your competitors or the law enforcing agencies will look with this context).
The bottom line is the repercussions would be sever if the transparency is not maintained to highest degree.
The IACCM Top Terms and 10 Pitfalls research offer a whole new perspective on these repeating conversations. Are they using particular standard documents or are you seeing a whole range of idifferent versions?
Regretfully they are mostly very different. Even the customer's who use the same form, typically alter the document slightly from project to project. We have experimented using both Word and Adobe Acrobat to "compare" documents but had very limited success with that.
• CMS Group, Inc.
My company has a program (CAT - Contract Analysis Tool) that reads all Microsoft Word and Excel contract documents and extracts the words or phrases you specify to find, and any date references. It can process upwards of 100 documents in 30 minutes and results are easy to filter and view. The contract documents with those keywords are highlighted and indexed for hyperlinks from the excel results file. It's an application using Excel.
If anyone has an interest in having a contract analysis performed, or interested in subscribing or licensing this application please contact me.
• Sysintellects LLC
I trust you are doing fine.We would be happy,if you could share your contact details so that i can inbox you the same.
Thanks Kent for your caring - its very interesting to view how the Contract could be managed in other companies and compare with current process and so on we able to adapt and refine the process. Thanks for your offer i believe it would be a great help.
• Qatar Petroleum
We have similar situation when vendors/suppliers/bidders propose deviations/exceptions to our standard terms and conditions. Legal department propose the alternate text followed by exhausting and long winded discussions between both parties reaching no where. I would like to know the items that end in stale mate and those which get resolved by mutually agreed alternate text. Are you using standard terms and conditions or they propose their own terms and conditions for your review and acceptance? Do you have same set of builders participating in the bidding process? If yes, you can have a mutually agreed terms and conditions which can be used in all future contracts. This will prevent delays.
Hi Wendy. I am looking into this and hope to get back to you soon. In the meantime, could you share a little more information on the "onerous provisions". You may email me directly at email@example.com if you prefer not to detail the provisions in an open forum post.
Roselle, thank you. Some provisions we strive to avoid are unlimited liability, indirect/consequential damages, and the duty to defend. Wondering if other architectural firms are accepting these terms, or finding strategies to effectively negotiate with stonewall clients.
I reviewed such contracts in the past for a large arch/eng company working in the utility industry. Must haves are waivers of indirect consequential damages and a limit of liability (LOL). However, we sometimes accepted 2 or even 3 times the contract value as the LOL. We accepted duty to defend but indemnity was for third party claims of property damage, bodily injury, death...not breach of contract. Most sophisticated clients understand the waiver of consequential damages and accept it, provided it's mutual. We'd get the LOL (or walk away) but sometimes it was higher than we liked. What makes you think some of your contracts are not insurable? You have CGL and PL insurance, right?
this is a provision that never goes away, but seems to vary in its frequency.
in February this year, I answered the question from a buyer's perspective and you can see the answer I gave in the member library (see under Resources). The points I make there apply in reverse for you, as a seller.
I think it is important to understand your buyer's motivation - what are they really trying to protect? If, for example, it is a mechanism to reduce the need for regular market testing, it may be to your advantage to agree a mutually acceptable MFC clause. Perhaps in return you might request an extended contract term.
Ultimately, I think most MFC clauses are relatively meaningless. You will probably commit that you will not offer lower prices on the same terms and in similar volumes; this actually gives you tremendous flexibility. But it may satisfy the need of your counter-part in Procurement to show that they successfully 'protected' their position.
I am also going to send you a link to a survey we undertook several years ago because in most respects, I don't think much has changed on these particular clauses - except perhaps that technology may be giving you better insight into pricing variations and whether or not you are complying with the terms agreed.
Hi Anne, one way to deal with this is probably to put a Master Services Agreement in place for long-term vendors that includes the general obligations you want covered in each statement of work. By doing so, you only need to refer to the clause number and not mention the specific obligations every time.