Welcome to Part 2 of our three-part retail contract series. This series takes some of the key contracts from retail businesses and focuses on the three key aspects that tend to be overlooked by retailers in the haste to ‘get the deal done’ and get the products to market. Be sure to check out Part 1: Supply Term Contracts.
Procurement contracts set out your obligations and your contractor’s obligations in your purchase of goods or services. These can include things such as maintenance of the fittings within your premises and the purchase of office equipment and furniture. Here are a few common oversights that you should note when thinking about entering a procurement contract:
If your contractor is providing you with a service you should ensure that your contractor and his/her work is protected by insurance. If something your contractor installs causes damage or injury, it’s important to know that your contractor is fully covered by insurance so that you don’t end up losing out.
I see many businesses that enter into a procurement agreement without checking whether their contractor has insurance – it just isn’t worth the risk! Ensure that you have an insurance clause in your procurement contract and follow up by sighting their certificates of currency.
Staff Training & Control
Staff that have not received appropriate training can pose a risk your business if they are hired by your contractor – and sometimes after entering a procurement agreement, you have little to no control over whether you can exclude them from providing the service. Make sure that your contract has a clause that allows you the flexibility to have staff changed, particularly when it comes to the provision of services.
The quality of the work your contractor provides is important; make sure that you have listed specific warranties regarding your contractors goods and workmanship so that you have some recourse in the case that a good or fixture is breaks down or is not up to standard. Warranties should be tailored specifically to the goods and services that you are procuring.
I hope you have found these three oversights helpful as a first step to entering a fool-proof procurement agreement. Stay tuned for our next edition when we consider the top three aspects that are often overlooked in wholesale agreements.