Interesting Discussion The legal aspects of Customer Specific Requirements (Contract Law).

[Marc]

I have the feeling the Tier 1 and below do not operate from the position of fear only, but also by lack of knowledge.

As someone who worked as a 'hitman' for many years (aka a consultant), I have seen so many situations that were totally dumbfounding that yes - It's common. Many times the company doesn't even realize it, though. E.g. #1: Company has someone reviewing prints and proposed print changes that doesn't have someone who fully understands GD&T. E.g. #2: Company making prints by person/people who do not understand GD&T.

I know that contract law is dispositive and there will probably be situations were new unilateral requirements will be valid. Normally the argument is that the supplier has in the past signed the “Supplier Quality Manual”, and therefor is bounded by all new CSR:s in the future.

NOTE: dispositive - If a buyer and seller end up in court, their relationship is on the rocks, at a minimum.

The argument is bogus. Prior to contract acceptance every company has to fully review all requirements. I'm not a lawyer. I did learn about contracts in the 1980's working at a company involved in DoD work. Talk about complex contracts... I remember working on a contract proposal that took the company over 6 months to prepare. Complex references, requirements, etc. It was a company wide project with multiple teams.

Automotive isn't any where near as complex. And

...that the supplier has in the past signed the “Supplier Quality Manual”...

is bull. Before a contract is agreed to a company has the opportunity to assess the full/complete terms and conditions. That is the time to assess whether or not they want the contract. If there is no provision in the contract by the buyer/customer which specifically states that, for example, future changes in CSR's will be applicable to this specific contract (and legacy contracts...), then unless the contract is amended changes to CSR's in the future are not applicable. Same with supplier quality manuals - If there are changes after the contract was agreed to, future changes are only applicable if that condition was so stated in the contract. Think about it - And I've seen it - Where a customer submits a revised print for a 'running change'. The changes will make the part cost 3x the original cost. The supplier can't be expected to just eat the costs. The change requires a contract review to assess the effects. I remember such a change where, had the company agreed, it would have been literally 'selling' the part at above below cost.

A contract is a contract and aspects such as 'intent' aren't really applicable. The contract says what it says. If a specific 'intent' was actually intended, it should have been called out/specified in the contract. I saw this back in 2016 when before a judge a lawyer started talking about the 'intent' of a contract provision. The judge said what I just said above - If there was a specific intent it should have been written in the contract. "What I meant at the time" isn't a valid argument.

I have written quite a few times in discussions in the forum of the importance of contract review. Whether a company agrees to "new unilateral requirements" being applicable to existing contracts is a choice the company has to make. I, for one, would not make that agreement if only because, unless there is a provision to allow cost/price revisions in such cases, there is no way to know how much "new unilateral requirements" would cost.

EDIT: Made some clarifications and corrected some typos.

 

[Mike S.]

I’ve done contract review from a QA perspective in aerospace for over 10 years. Stuff from the DOD, major primes, as well as smaller sub-tiers. It gets more ridiculous by the year. Bigger and more complicated – almost like they are paid by the word. No wonder lawyers get a bad name – the stuff they come up with is mind-boggling. It’s a wonder any business can get done at all as the “my T’s and C’s override all other T’s and C’s” pissing contests between sellers and buyers rages on.

I actually don’t know how our Contracts Dept handles some of this crap in the end – I just point out the concerns I see from a QA standpoint and turn it over to them. Thankfully, I don’t think any of it has ever reached the courts.

If anyone reading this has any say in the writing of contracts, T’s and C’s, customer specific requirements, quality provisions/clauses, etc. for God’s sake please, do everyone a favor, and make it as brief and clear as you can and don’t put it in there unless you can clearly explain WHY it is necessary.

The Golden Rule should apply – don’t impose it on your customer/supplier unless you would like it imposed on you. Don’t even think about trying to pull the unilateral changes crap.

JMHO.

 

[normzone]

This will be of absolutely no help to you, and I apologize for that. But if you could use some related entertainment reading ...

Interesting Purchase Order for its Terms and Conditions