jeff4757 Posted October 29, 2013 Report Share Posted October 29, 2013 Folks- Our company awarded a number of PO's for highly critical engineered components. A PO was issued and subsequently acknowledged by the supplier. NO exceptions taken to either delivery or T&C's. The supplier has missed initial delivery requirements, has provided revised dates and yet again has missed. Our firm has no clause for Liquidated Damages. Our firm wishes to issue a cure notice and incorporate a penalties clause for missing any additional delivery forecasts. Are we within our rights to do so? Your feedback is appreciated! JP Link to comment Share on other sites More sharing options...
ji20874 Posted October 29, 2013 Report Share Posted October 29, 2013 What do your purchase orders say? Those, and the laws of the state that govern your subcontracts, are what matter. Link to comment Share on other sites More sharing options...
Retreadfed Posted October 29, 2013 Report Share Posted October 29, 2013 jpayne, a more fundamental question is whether you even have a contract. Was the PO issued on a unilateral basis? Did the supplier ever accept it? Not taking exception is generally not the same as acceptance. I suggest you check this question with legal. Link to comment Share on other sites More sharing options...
wvanpup Posted October 29, 2013 Report Share Posted October 29, 2013 As noted above, the laws of your particular state and the terms of the Purchase Orders are critical. As a matter of general principal, it seems to me that you cannot unilaterally impose a liquidated damage provision in your purchase order. Your supplier may be willing to accept a liquidated damages provision in exchange for an additional performance period extension. Whatever you do, you should make this a bilateral agreement that becomes binding on both parties (I cannot tell if the current purchase order is unilateral or bilateral; if it is unilateral it is not clear what remedies you may ultimately have should the supplier fail to deliver). Link to comment Share on other sites More sharing options...
jeff4757 Posted October 29, 2013 Author Report Share Posted October 29, 2013 Thank you all for your valuable input! Link to comment Share on other sites More sharing options...
here_2_help Posted October 29, 2013 Report Share Posted October 29, 2013 AND this is why a prime contractor's performance risk can NEVER be transferred to any subcontractor. H2H Link to comment Share on other sites More sharing options...
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