Mother Nature Is Tough – How About Your Contracts?

The news from Texas over the last few days has reminded us that a single storm can flood entire cities, shut down factories, cut off warehouses, wash trucks off the road, close airports, and essentially bring an entire supply chain to a screeching halt.

What happens to supply contracts then? There is law on this point, but law alone is not always helpful. Continue Reading

Heads Up Federal Contractors, Buy American Laws Are Going to Impact Supply Chains

flickr / Chairman of the Joint Chiefs of Staff

Previously (here and here), we discussed the Trump administration’s renegotiation of NAFTA and the steps the President has taken to promote Buy American and Hire American.  Now the Department of Defense and the Department of Commerce, together with the White House, are taking steps to ensure enforcement of Buy American Laws.

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Don’t Just “Pass it Through” – Options for Handling Warranties Down the Supply Chain

Take a simple fact pattern: A sells widgets to B, and B re-sells the widgets to C. Something goes wrong with the widgets and C needs to have them repaired or replaced, or has a claim for damages. Who does C claim against?

One concept that often comes up in negotiations and contracts is a so-called “pass through” warranty: the concept being that the reseller obtains a warranty from a supplier, and “passes” the benefit “through” to their customer. Even though this language sometimes shows up in final contracts, it can be legally ambiguous – there are several ways to accomplish this economic goal, and the precise method can end up having a big impact on the risk allocation between the parties. Before going into your next supply contract negotiation, consider your options in more detail: Continue Reading

Quoted in Corporate Counsel: Lessons from Hobby Lobby’s Settlement

Earlier this month, nationwide arts-and-crafts retailer Hobby Lobby settled with U.S. Department of Justice over allegations of smuggling cultural artifacts from Iraq.  As part of the settlement, Hobby Lobby consented to forfeiture of the artifacts and payment of $3 million.  Hobby Lobby also agreed to adopt internal policies and procedures governing its importation and purchase of cultural property and must submit quarterly reports to the government on any cultural property acquisitions for the next eighteen months.

Corporate Counsel examines what went wrong and the lessons to be learned for any in-house counsel dealing with supply-chain issues.  Sarah Rathke provides comments on the importance of oversight, due diligence, and how companies can take advantage of the benefits of attorney-client privilege.

You can read the article here: 3 Key Lessons for Legal Departments From Hobby Lobby’s $3 Million Antiquities Settlement

 

The Far-Reaching Reach of REACH; Global Supply Chain Impacts

Last week, we reported on the Restriction of Hazardous Substances Directive (RoHS) in the EU, which took effect in 2006 and restricts the use of toxic chemicals in electronics products.  Although RoHS is an EU directive, we discussed that it has extraterritorial impacts on global supply chains in that the legislation requires electronics manufacturers to compile comprehensive technical files on their products, and to share this information with importers and distributors – in effect, requiring effective cooperation both up and down the supply chain.

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Monitoring the Electronics Supply Chain under RoHS

The Restriction of Hazardous Substances Directive (RoHS) (2002/95/EC and 2011/65/EU) was adopted by the European Union in February 2002, and took effect July 1, 2006, yet many in the electronics industry are still uncertain as to its scope and requirements.  Sometimes called the “lead-free directive,” the purpose of RoHS is to reduce toxic electronic waste by setting maximum permitted concentrations of materials used in electronics known to be most toxic.  Although it applies only to those offering electronic products for sale in EU countries, RoHS’ supply chain requirements extends RoHS’ reach to electronics manufacturers around the globe.

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Guest Post: What’s in Your Dispute Resolution Clause? Six Ways Dispute Resolution Clauses Impact Supply Chain Contracts

The following is a guest post from Joe Jones providing insight on drafting dispute resolution clauses in supply chain contracts and determining which provisions will work best for you.  This will be the first of many blog posts by Joe where he will discuss topics related to drafting and negotiating supply chain contracts.  Joe is based in our Washington D.C. office where he specializes in cross-border corporate transactions, antitrust/competition review, foreign investment clearance procedures and other regulatory matters.

Contract Review

What’s in Your Dispute Resolution Clause? Six Ways Dispute Resolution Clauses Impact Supply Chain Contracts

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Infrastructure Watch: The Impact of Proposals to Private Air-Traffic Control on Supply Chains

Airplane_on_runwayThis time around, manufacturers have not yet meaningfully weighed in on the proposal.  There can be no doubt, however, that privatizing air-traffic control could fundamentally change the system in ways that will impact supply chains.  Obviously, in a “user pays” system, which is essentially what is being proposed, the direct costs of air transportation increase, though proponents of the change argue that privatization will result in decreased air costs overall – so what the financial impact will be is unclear.  (Indeed, there is not even agreement among experts whether Canada’s privatization increased or decreased the cost of air transport.)

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