Supply Chain Agreements: Consequential Damage Disclaimers, Indemnity, Force Majeure, Termination, Warranty Provisions

Description

Like all contracts, supply chain agreements devote considerable planning to address and allocate the risks of disruption and nonperformance. Supply chain disruptions have persisted, resulting from geopolitical tensions, rising fuel and energy costs, labor shortages, and other factors. Buyers and sellers must adjust and implement protections in the wake of global disruptions from tariffs, trade wars, and inflation.

High priority consideration for practitioners is the interplay between various terms intended to mitigate/transfer risk in the transaction through warranty terms, damages disclaimers, and limitations on liability. In addition, counsel must carefully craft indemnity provisions to fend off claims from third parties.

Other critical terms include termination rights and force majeure clauses, which should consider the realities of the particular supply and distribution channels. Key considerations include sole-sourced exclusive supply agreements, the geographic location of suppliers, time to ramp up an alternate supplier, and potential events outside the parties' control.

Listen as our expert panel provides critical insight on how to avoid pitfalls in crafting and implementing these essential terms for clients. The panel of attorneys brings a wealth of experience in structuring and negotiating supply agreements.