Article by Frederick C. Kucklick
I have seen firsthand in business, and also during engagements as an expert witness in lawsuits: some breach of contract, intellectual property or other cases may have been mitigated or avoided completely had suppliers of machinery and tooling included comprehensive terms and conditions of sale with their original quotations. A piece of paper that some may deride as "boilerplate" might eventually prove to be a useful investment.
Some company owners and managers scoff at the idea of attaching a set of comprehensive Terms and Conditions of Sale ("Terms") to each quote. I have heard managers claim that the customers will not buy from them with such Terms. My experience suggests otherwise.
I am not a lawyer, and this is not legal advice. It's from the trenches. I co-founded, operated and managed a $75 million international corporation that designs and manufactures industrial manufacturing machinery, tools & dies, metal forming machine tools, metal cutting machine tools, assembly machines, integrated systems and production lines for the automotive industry, appliance industry, and metals industry. More recently I have served as a litigation consultant and/or expert witness in litigations involving manufacturers of manufacturing equipment and tooling. Some lawsuits may been avoided had the company selling the equipment and tooling ("Seller") provided a comprehensive quotation, complete with specifications for the goods offered and Terms and Conditions of Sale.
I have found that hiring a good business lawyer to work with the president or another authorized and experienced officer of the Seller to compose and review the Seller's Terms can be a valuable, but potentially time-consuming, investment. I do not recommend asking a lawyer to "write some terms," nor do I recommend copying another company's Terms without careful consideration and legal review.
Well constructed Terms can describe how the Seller actually wants to do business.
Each Seller's business may have its own unique circumstances to be addressed in its Terms. Consider the following:
I feel that anticipating as many of the things as possible that can happen during normal transactions, and addressing them in the Seller's Terms and Conditions of Sale can be an investment in the Seller's future.
Terms don't need to fit on a single page; they can occupy several pages.
I have found disadvantages to printing Terms on the back of a quotation form. They can be inadvertently omitted if a quote is Emailed, copied or faxed.
I prefer a Terms enclosure that is included with or incorporated into each quote document, regardless of the means of delivery.
Once the Seller has created Terms and later determines other factors or conditions that become known or are applicable to a specific transaction, the Seller can add appropriate wording to the body of the quotation to which the Terms have been attached, thereby amending the Terms.
Frederick C. (Fritz) Kucklick is founder and president of IMT Consulting, Inc., a firm that provides management and engineering support for CEOs, managers, and attorneys. IMTC's clients include major corporations such as GKN, Daewoo, Mazak Corporation, Eaton Corporation, Asia Motor Works, Ltd., and Hayes Lemmerz International, plus numerous privately held companies. Litigation consulting and expert witness matters for which Kucklick has been retained include breach of contract disputes, patent infringements, misappropriations of trade secrets, industrial espionage, products liabilities, and others in arbitration and state and federal courts.
Fritz Kucklick's manufacturing, management and engineering expertise are based on a mechanical engineering degree and skills developed during more than 25 years' hands-on ownership, top management, international sales, design engineering, field startup, troubleshooting & installation, and project management positions with automotive Tier One, machine tool and heavy machinery manufacturing companies in the U.S. and Europe.