Thought Leadership Webinar: Supplier-Led Innovation and Continuous Improvement - How best to achieve them in contracting
Published: 01 Oct 2019
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Author: Tim Cummins, Tony Morgan
Innovation is critical to business success - and supplier-led innovation is recognized as being a major source. But is the potential being realized, and if not, why not?
IACCM has published a study that offers a series of ground-breaking insights that are of importance to both customers and suppliers. This is one of our most significant pieces of research this year and you don't want to miss this session! It clearly demonstrates IACCM's thought leadership and value add and we are very proud of the research.
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2019-08-30 18:01:18
In the US, Texas or New York are largely considered "neutral territory" whereas in Europe, until very recently UK law was considered neutral. I think that may change with the recent political upheaval.

• Ministry of Defence
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2019-10-04 08:50:59
Or try international trade law?
www.jus.uio.no/lm/index.html

• Legal and Commercial Training Limited
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2019-11-05 09:40:02
In the case of one party proposing Indian law and the other proposing Singapore law, the parties may well choose the law of England and Wales as both Indian law and Singapore law are based upon English and Welsh common law. (Note that there is no such concept as "UK law" as one commentator has suggested below).
However, a party should consider a wide range of factors before proposing a particular governing law and should weigh up the legal and commercial advantages and disadvantages of all the options.
One factor may be the degree of certainty that a contract will be interpreted in a particular way. English law adheres to the doctrine of binding precedence. Some legal systems do not. This could lead to significant uncertainty as to how the law will be applied.
In English law, it may be perceived that the courts allow a greater degree of freedom of contract. Subject to certain exceptions, freedom of contract in English law means that commercial parties are completely free to make disastrous bargains. This illustrates the comparative reluctance of the English courts to interfere on policy or other grounds to rewrite the parties' contracts for them.
For example, in English law it is possible, provided very clear wording is used, to include an exclusion clause that excludes any and all liability whatsoever, even for a deliberate breach of contract. And there is still no recognition of a duty of good faith being applied generally to commercial agreements (but watch this space!). This may or may not be an advantage to you but it remains the case that the courts are likely to give effect to the wording of the contract without imposing their opinions as to what does or does not amount to good faith.
And you may wish to consider the approach of a particular legal system to particular clauses.
For example, in English law, a liquidated damages clause will be subject to the clarification set out recently by the Supreme Court with a subsequent judgment, applying that test, indicating that a freely-negotiated LD clause is likely to be upheld subject to the requirements set out by the Supreme Court. Under UAE law, such a provision would be subject to Article 390(2) of the Civil Code and either party may apply to the court to adjust the agreed amount of compensation so it is equal to the loss. If Indian law were to apply, we would have to consider the effect of section 74 of the Indian Contracts Act 1872.
English law will also recognise an asymmetric jurisdiction clause.
And it may be that the choice of law clause will be reflected in the choice of jurisdiction. So, English law and the English courts. If the choice of courts is to reflect the choice of law, it may well be the consideration should be given to the efficacy of the court system and the technical expertise and other qualities of the judges.
Lots to consider.
Replies: 3

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2014-09-16 19:18:00
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
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2015-03-11 06:27:23
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

• Foreign and Commonwealth Office
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2017-10-20 09:25:25
I'm not sure what the change of law mentioned could relate to - other than what Shaun is referencing.
I would look to follow i) your organisations own information management policy (if it exists - as they should have taken account of relevant law/regulations for your company); or ii) if there is no records policy - then as Shaun says, capturing information and storing information based on the potential risk of claims which would be capped based on the Limitations Act 1980.
The only thing I'd add to point below (for England and Wales jurisdiction) is anything executed as a deed has a limitation period of twelve years rather than six.
Replies: 3

• Air Liquide
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2019-09-19 05:18:40
I never saw such clauses

• Advokatfirmaet Negota AS
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2019-11-29 09:30:06
Dear Carrie, I have experience from pricing changes both during the negotiation process and during the contract lifecycle. Our clients have especially found this as an effective tool during negotiations to demonstrate risk/work-impact if the other party is requesting terms transferring an extensive part of the risk/work to them. By showing the cost-impact, the incentive for price increase becomes rather obvious which strengthens your negotiation position. Kind regards, Madeleine Willyams - Advokatfirmaet Negota AS, Norway.
Replies: 2

• Pretorius Consulting
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2019-09-18 18:15:04
I believe I found it. www.iaccm.com/resources/
Replies: 1

• Gemserv
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2019-07-03 15:11:45
This is definitely something that should have greater consideration in my organisation, I have been quite vocal in pushing it. I have worked in teams where particular members have found the lack of bounds extremely stressful as they feel they are crowded out or put upon by the more vocal members, who are equally frustrated it takes so long to get things done. Clarity in defining the roles and responsibilities can often be an enabler.

• Airbus Defence and Space Limited
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2019-08-18 12:37:30
Agreed, this is a great article and really gets you thinking about the behaviours instilled within your own immediate team. If we cannot get the behaviours and roles clearly specified for our own team members first we are setting ourselves up to fail in the wider team and externally.

• Experian
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2019-02-03 22:03:09
Agree - this was quite an insightful article. I've always believed that it should work in reverse - that you should set the objective and then leave it up to individuals to work out how to get there, which is what the article says except for specifying that their roles need to be clear. I believed that if roles were less clearly defined then it gave people scope to expand their remit, however I can see why this can cause confusion.
Replies: 3

• IACCM
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2018-02-27 14:17:31
You are correct, but don't you think that is implied under the 'ultimate objective'? Perhaps you have only experienced part of the statement so far.
Replies: 1

• Seiersen Enterprises
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2017-02-22 00:23:54
Hello Peter,
The way you have formulated your question, it looks like an account plan a buying organization would prepare for a significant supplier. So you will find quite a bit of information in the IACCM library associated with SRM.
Clearly, you will have to adapt to your industry, to the services you are buying, and to the goals you wish to reach through your association with this supplier.
A good account plan will not only cover the scope of deliverables you are contracting for, but should also define
- the type of relationship you wish to have,
- what is the strategic end point of having a third party involved
- how you will govern the relationship and the day-to-day deliverables,
- what shall be the benefits for each party, how will they be earned, secured and measured,
- how you will jointly manage risk and who will bear what risks,
- and even how you will wind down the relationship when it must end.
It seems that as the buyer you are open to a collaborative relationship, and that is typically the best way for these relationships to be built. You will probably find that the sales side partner at your supplier is eager to work with you to develop this plan.
I wish you luck with your endeavor, and if you want to talk through some ideas, please give me a call or send a email - nseiersen@iaccm.com
Replies: 1

• Contract Manager Canada Inc.
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2017-02-04 02:36:22
If the project is delayed by the Employer... first make sure that there were no delay causes by the Contractor on the previous agreed milestones, for you to be fully eligible for a compensation. Now the tricky part to kick in, is the delay resulting to only warranty extension, which means that all construction, installation and pre-commissioning done? Just ensure that you've all signed-off documents that it's pre-commissioned. if so, your service team will provide an additional cost for extra-warranty coverage and you can lever it as a scope-creep. This is not an issue, if all of your works are completed and no more to come back to do additional works, then you need to add remob to commissioning cost plus the extended warranty cost and get a CO prior to agreement of extension. Don't forget to have your insurance company informed on this extension, as they were notified of previous warranty commitment, not the new one. Hope this serves.

• Seiersen Enterprises
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2016-12-03 22:23:43
It strikes me that the actual costs of extending the warrantee might be considered.
These may be nil if the delay in the project delays the in service date, and thus the risk of fault.
The onus might be put on the supplier to prove the materiality of additional warrantee costs whatever they might be.

• Capgemini India
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2016-12-05 04:44:19
As warranty effort is provisioned to fix bugs of contractor's defects, since the delay is caused by the Employer, the Contractor is entitiled to claim additional cost. Not only is this instance 'due to failure of the employer (customer)', which is not due to cause by the contractor, there could also be a delay in the service start date, which means the plans for service could be impacted. Therefore, I believe the additional cost is justified.

• Whirlpool
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2016-12-14 13:17:49
Our service department has actually been able to provide a number for us by unit of what an additional year of warranty costs us. Do you know how much the first year costs you? You could always just submit that as an estimate for year two.
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Replies: 4