Manufacturing facilities may experience production delays due to unexpected natural events, such as fires, or anticipated,...

Manufacturing facilities may experience production delays due to unexpected natural events, such as fires, or anticipated, but ignored, defects or human-made problems. What are three (3) to five (5) contract clauses and/or negotiated business terms that you would want to include as the purchaser of manufactured items critical to your company's success to avoid or mitigate risks associated with production interruptions.

Expert Solution

The following three clauses should be included in a contract to avoid any manufacturing-related flaws=

The adherence of the quality standard= The company can negotiate the accepted standard quality of the product received with the seller. If the quality of the product does not match with the specified standard, the whole lot or order will be cancelled and a penalty or damage will be charged from the seller

The assurance of deliveries= The purchaser should include a certain lead time after placing the order in the contract terms. If the seller is not able to deliver the product within the negotiated lead time, actions should be taken against the seller. This should also include the clause or provision related to natural disasters and calamities and unforeseen situations such as the spread of pandemic disrupting the supply chain

Variation in the price= The unforeseen event such as flood, fire, drought may cause the increase in the cost of raw material. In order to prevent these events and to ensure the quality of the raw material used in the product, the contract must specify the nature of the raw material used in the finished product and the no variation in the final price of the product.

keosha answered 3 months ago

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