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Important elements of a contract to avoid vendor disputes

| Sep 27, 2019 | Vendor Disputes |

There are many different types of businesses in California. While the products and services they provide vary greatly, they all do have some commonalities. One of the aspects of business that most companies share in common is that they need to rely on third-party vendors in order to effectively run their business. This could be a company that provides certain parts, a delivery company and many other types of third-party vendors.

The companies need these third-party vendors to be good at what they do as well and meet the expectations. When expectations are not met, the company’s bottom line could be hurt due to the mistakes of the third-party vendor which can be very frustrating. It can also lead to vendor disputes and litigation to resolve their disputes. However, some of these can be disputes can be avoided or at least put the company in a good position if there is a dispute by having a well written contract.

It is important that both parties are clear on ownership of confidential information and work-product developed during the relationship. Another important aspect that should be clearly stated in a contract is the price for the services, how payment will be made and when payment will be made. Also, how changes will be handled needs to be determined as well as how and when the contract will be terminated. Disclaimers and indemnification clauses can also be very important.

As third-party vendor relationships are very important for companies in California, it is important that the responsibilities of each party are clearly defined and understood by both parties prior to the relationship starting. However, even the most well-written contract cannot prevent all disputes, which will to happen from time to time. The contract can be very beneficial though as those disputes are resolved. Vendor disputes can be complicated and consulting with an experienced attorney can be beneficial.