Standard Terms and Conditions often include purchasing conditions. These are rules focusing on what is expected of a supplier. This can be a practical way to make sure the logistic and administrative processes within your organisation match up with the deliveries you receive. Purchasing conditions are particularly relevant with bulk purchases.
What Is Included in Purchase Conditions?
While every business’ needs are different, there are several elements commonly included in purchase conditions:
- Supplier obligations
- Supplier liability
- Consequences for agreement noncompliance
- Delivery agreements
- Confidentiality statement
- Payment terms for supplier invoices
- Laws which apply in case of conflict
Limiting Risks with Purchase Conditions
Purchasing conditions need to mesh with your business processes. If you’re purchasing products, for example, you will need different conditions met than if you’re purchasing services. And, what you’re buying has a huge impact on the conditions that need to be met. Drafting purchasing conditions that apply to your purchase is important. If you’re buying fresh produce, the conditions shouldn’t account for the sale of a machine. If in doubt, seek legal advice. This can help you avoid unnecessary risk.
Purchasing Conditions vs Sales Conditions: which ones apply?
What happens if both you and your customer or client want to apply conditions? If there’s a dispute, which one of the agreements is going to be viewed as valid? Well, it depends on a few different things.
How was the original contract written? While writing up contracts or shared agreements, the parties can establish a hierarchy of validity. Some elements might favour one party while other elements of the contract favour the other. If possible, this is a smart way to avoid future problems.
It also might depend on local laws. Dutch laws, for example, tend to favour the creditor, while in other places it depends on what order the agreements were signed or validated. In some locations the first agreement is given precedence but in others the courts view the second agreement as a ‘counter-offer’ or an ‘update’ to the first agreement and will favour that one.
Do you need to adjust your purchasing conditions based on a seller’s location? It’s a good idea to offer purchase conditions in a language that your seller understands well. Even if they speak English, making sure there’s a copy of the document in their preferred language can help you avoid miscommunication later.