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If a supplier's product fails to comply with acceptance criteria, there are five common contractual remedies that procurement professionals use: replacement, supplier repair, self-repair, refund, and contract termination. You can negotiate for a specific remedy or the option to choose from a list of remedies at time of failure. For each possible remedy, there are things that should be contractually specified to avoid disputes. In this edition of PurchTips, we've provided two checklists to help you determine what to agree upon with your supplier when drafting the contract if replacement and/or supplier repair are among your preferred remedy options. A future edition of PurchTips will provide checklists related to the other remedies.
