Yes I agree, please share with me, I would like to see the legislation and I have recently observed the change in contractor's attitude in negotiation from UK.
• Ministry of Justice
The most recent change is the implementation of the European Directives into UK Law, through the issue of the 2015 Public Contracts Regulations. This dictates Government procurement rather than standard commercial arrangements. Section 83 indicates a minimum contract record retention of the contract duration where they are over a certain value: As most contracts have an extended liability life of at least 6 years and as we have a wider obligation to maintain public records, then policy in my government Department is to err on the side of caution and retain for 6-7 years. The legislation is found HERE www.legislation.gov.uk/uksi/2015/102/pdfs/uksi_20150102_en.pdf
Clearly it is desirable to have consistency of law and jurisdiction to support likely interpretation and adjudication. However, this is not always possible and so it becomes a matter of assessing and mitigating the potential risks that might arise.
In this instance, they are probably quite low because you are dealing with jurisdictions that have broadly similar forms of jurisprudence and both operate on Common Law principles. If the legal systems were fundamentally different, or if the rule of law itself were less effective, the answer might be very different.
• APL Norway AS
I suggest that you keep the same laws. Check your Dispute Resolution Clause, there may be some tricky language. If your Client goes into dispute with your supplier, you as the Contractor, will be the piggy in the middle if you have two different laws. You, the Contractor, will become liable for any discrepencies between the two laws towards your Client. The Supplier only has an agreement with you and not the Client.
Note from experience, if a case goes to arbitration, the first question should not be, which law shall apply?
I haven't observed such a trend, though I'll see what data we can get. A factor in this could be that the courts - certainly in UK and Australia - now expect that the parties will have attempted some form of dispute resolution prior to coming to court. So perhaps this is a 'behind the scenes' issue.
• Rio Tinto
Thanks Tim, good point.
I don't know about trust being an issue, but at least in the U.S., arbitration is usually just as expensive, if not more expensive, than litigation. This is especially true if the arbitration involves a panel of arbitrators. Most of my clients did not want a mandatory arbitration clause in the agreement for that reason (aside from the fact that there is no appeal in arbitration). After practicing law for over 16 years, I only handled maybe 20 or 30 arbitrations but countless lawsuits. Lawsuits are cheaper and appealable.
• Rio Tinto
Thanks for that last reply. That is the feeling we have here too and I was wondering if it is shared more widely. Do you find your counterparties agree generally and prefer litigation to arbitration?
Yes, my counterparts definitely agree. Arbitration sounds great in theory, but the only real advantage that any of my clients appreciated is the fact that arbitration documents do not become public record. For very small companies (sole proprietorships) involved in fairly minor disputes, arbitration with a single arbitrator is feasible, but about half of my clients in those situations preferred mediation instead, and then non-binding arbitration. I would say for medium to large companies, litigation is preferable.
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.
Sharon, what is the context of your question? Most companies I've seen have a fairly robust process for screening suppliers. Depending on the nature of the business and the agreements you have with your customers, your company's risks for the supply chain may vary.
My company uses MK Denial website to check if a supplier or its BODs are deemed denied or restricted parties. This is a regular process whenever we register new suppliers or re-validate existing ones.
This is a common problem. Many of the relationships with indirect
suppliers are less formal and may have been in place for years, leading to resistance over use of standard templates.
It is of course important to establish whether the issue is just general resistance or whether the standards are not really appropriate to the range of indirect relationships required, or lack required flexibility.
We do have benchmark data at IACCM on cycle times and will be issuing reports on the latest information at the end of April. It should be possible to provide interim data if you need it sooner.
• Alcatel Lucent
Internal Template application rather than the one of the supplier is usually a requirement nevertheless the real issue behind is do we protect ourself correctly. Legal usually is validating a template that he wants verybody contract manager to apply. As legal ressources are scarce and expensive ressources it is ovious that this is the first thing that should be pushed. Once you know that he does not work the more complex but more interesting solution for the company is to look at the mandatory clauses that are requested from the contract. So instead of pushing your template you should fight on the mandatory clauses. Fall back position should be created as a handbook of best practices.
• Dept of VA
Templates, while easy to copy and work with, present a challenge to many companies in part because the template is usually written from one side or the other, providing all the advantages to the author's side and none to the recipient. This is frequently seen in EULAs, where the equivalent of "Not only do we have all the rights, but you are lucky we let you use our product at all, you horrible little vendor!" is common contract parlance.
So how do you overcome the natural inclination of a vendor to resist your templates? The same way you advertise anything else!
Make the option of using your product (the templates) both appealing and advantageous to the vendor. When sending internal templates to a vendor for use, do not present them as a "use or lose" option. Instead, deliver the items with the contracting equivalent of a box of chocolates: Provide vendors a summarized explanation of the benefits offered through using your templates. Bullet-oriented briefs are more effective here, as they provide not only a quick list for the vendor to read, but a point-summary for the vendor's contract manager to use in presenting the overwhelming benefits offered by your templates to their management.
Explain (again in short form) the potential realized cost savings of template use, including ease of follow-on contract development by way of utilizing your "easily-tailored, customer-specific templates." Make every effort to ensure using your templates is so much easier than having the vendor's contract department reinvent the procurement wheel that the vendor (who at this point you should view as your customer) would actually be acting against their own best interest to do anything other than to use your templates.
As M. Fouquier rightly points out, the usual greatest challenge is getting your templates past the legal department guardians. Providing a brief mandatory clause list may be a more advantageous initial step, as it tends to ease legal's protective instinct toward its client(s). Once you present not merely a palatable offering of clauses, but a tasty array of work-easing options to the vendor (and the vendor's legal counsel), your job is 90% done. Offering updates and non-critical individual tailoring options (which would not, of course, change the mandatory clauses) gives the vendor the personalized attention so critical to obtaining their final approval. It is the after-dinner apertif of contracting: "Not only do we offer all these options, but our true focus is on YOU."
Granting the vendor a choice of either (a) using your banquet of templates designed to ease their workload or (b) going through the tedious grind of negotiating back and forth on every item for months makes you and your templates the obvious and preferred choice every time.
I attended a tech conference this week and this issue came up in the context of shadow IT and differing strategies around stopping unauthorised tech services.
The responses differed but the most interesting response was from a health company which employs lots of young people and had a constant problem with shadow IT. They have solved the problem by putting all data sensitive apps into a locked down environment and opened up for other services that employees wanted to do their jobs.While they did not mention the licensing issues maybe the answer is that with the SaaS offerings they can be easily cancelled. Maybe a policy for an organisation could say ok for the company to pay for a SaaS in the allowed open zone but individuals take on the related legal obligations.
Some corporations monitor which suppliers are most often used and negotiate master terms that acknowledge the click-through terms are overridden by the negotiated terms of the master agreement.
It isn't a perfect solution, but it can generate a high proportion of coverage.