Terms that drive most disputes
Sales of goods are governed largely by the sales article of the Uniform Commercial Code, which fills in terms the parties leave out and has its own rules about when a contract is formed. Disputes most often involve exclusivity, minimum purchase or supply commitments, price adjustment clauses, warranties, and termination rights. When purchase orders and invoices carry conflicting standard terms, deciding which terms control can be complicated. Force majeure clauses became a major issue during recent supply disruptions, and their exact wording mattered a great deal. Limitation of liability clauses and exclusions of certain kinds of damages also deserve a close read.
Franchise and competition issues that hide in distribution
A distribution arrangement can be treated as a franchise under some state laws, and New York's franchise law is broad, so fees paid for the right to sell combined with use of a brand can bring a relationship within it. Franchise status carries disclosure and registration obligations that most distributors and suppliers do not expect. Territorial restrictions and resale price policies can raise antitrust questions as well. Some states and industries also have dealer protection laws that limit when a supplier can end the relationship. These issues are easier to handle while drafting than after a relationship has failed.
Drafting and reviewing the contract
We start with how the relationship is supposed to work in practice: who orders, how forecasts are made, how quality is checked, and what happens when demand changes. From there, we review or draft the agreement so the legal terms match the commercial reality. We pay attention to governing law, dispute resolution, and cross-border shipments, since an international treaty on the sale of goods may apply unless the contract excludes it. When a dispute has already started, we look at notice requirements and cure periods first, because missing one can weaken an otherwise sound position.
