Where supply relationships break down
Sales of goods are generally governed by Article 2 of the Uniform Commercial Code, which fills gaps when the parties' documents are silent. Many suppliers and buyers never sign a single agreement and instead exchange purchase orders and acknowledgments with conflicting terms, which leads to arguments about whose terms control. Disputes often arise when the buyer's forecasts do not match its actual orders, when prices need to change because of tariffs or input costs, or when supply is interrupted. Force majeure clauses are read according to their exact wording, and courts often apply them narrowly, so a general sense that circumstances changed is usually not enough. Quality disputes depend heavily on the specifications, the acceptance process, and how quickly problems were reported.
Terms worth negotiating and tracking
Clarify whether forecasts are binding, whether there are minimum purchase or capacity commitments, and how price adjustments work. Define specifications and inspection procedures, and set out what happens to rejected goods. Read the warranty, the limitation of liability, and any exclusion of consequential damages together, since they determine what a buyer can actually recover. Address ownership of tooling, molds, and designs, and what happens to them when the relationship ends. Keep records of orders, delivery dates, inspection results, and notices of defects, and send any notice the agreement requires in the manner it requires.
Working through a dispute or a draft
When drafting, we focus on the risks that are realistic for your business, whether that is a single-source component, volatile commodity pricing, or a customer that represents a large share of revenue. When a dispute arises, we look first at what documents actually form the contract, then at notice requirements and any dispute resolution clause. Many supply disputes are resolved commercially because both sides still need each other, and we try to preserve that possibility while protecting your position. If the relationship is ending, we plan the transition, including final orders, inventory, and return of property.
