With large projects after all the technical design is completed the commercial terms become important. That is the price, delivery and the terms of sale.
To the engineer Terms and Conditions might be “Just that boilerplate at the end of the contract.” And may therefore not appreciate what is at play or at stake here.
Terms of sale, Terms and Conditions or T&Cs are in place to do a number of things not the least being setting out what warranties apply and what requirements may exist for canceling a contract or for issues around obligations for such things as delivery. They also protect or mitigate the extent of a lawsuit by an owner or user.
Most people are familiar with terms and conditions. Anytime you download the latest software or upgrade for a program like Adobe Acrobat the one thing you must do before any transfer can happen is one must accept the software’s licensing agreements, or T&Cs. If they aren’t accepted you don’t get the download.
With software, the delivery is in seconds or minutes. With the time between placing an order and delivery of some major industrial equipment being weeks, months and even years the chances of a costly problem for the both the supplier and the buyer increase.
To manage and control the risk of an unforeseen event the supplier will want their terms of conditions, while the purchaser will want theirs.
Most companies will have standard terms and conditions and these are attached to equipment proposals. For equipment parts sales or in large projects of complete components such as pumps there will be an acceptance by one party for the others; or some accommodation forming a new agreement of sale – as the legal people look at what is proposed for the T&Cs and what they can live with.
Often (okay in most cases) the language may seem baffling. Worse is when the language to an untrained eye seems innocuous but can have other more far reaching meaning should a disagreement land in court.
These pre-loaded words come from precedents and the like. Citing a favourite tool – Wikipedia — “Common refers to law and the corresponding legal system developed through decisions of courts and similar tribunals…”. What this means is courts will often refer to precedents that are set in an earlier case to help adjudicate the one before them. If a precedent was established using a definitive word or combination, those words then can take on a meaning that neither party may not have intended or fully understood.
For instance time is of the essence in a contract document may seem like a pretty straightforward comment that you might hear in the street. However innocuous it might sound it has far reaching implications in terms of how job might be executed in a supplier’s manufacturing plant. The web site http://www.legal-explanations.com say of this phrase “It is a statement used in contract or agreements and meant to specify that the time and dates mentioned in contract are very important to maintain and should not be ignored by any of the party under any circumstances. The agreement is liable for cancellation if there is a delay of any form.”
In other words it has the capacity to be a very serious clause with far reaching implications.
These sorts of phrases can be buried into T&Cs as part of the standard template but can have serious repercussions. Therefore savvy suppliers when they see this phrase and others will ask for the clause to be removed or will substitute with some alternate wording that doesn’t expose the supplier to something as drastic and unintended.
Warranties are another large part of terms of sale. Within the warranty language one might find the word Merchantability, or Implied Warranty of Merchantability built in. It is another one of those words that can have a meaning unseen to a non-trained eye and has to do with using a product in a nonstandard way.
For anyone who is interested in this specific definition I invite him or her to the following link http://legal-dictionary.thefreedictionary.com/merchantability, which explains this is greater detail.
As engineers, buyers and users of equipment Terms and Conditions are something we become aware of. They are important and need to be given the proper respect.
We are CB Power and Industrial Equipment, supplying new, replacement and spare parts on major power and industrial equipment. For expert advice or a quote, call 1-888-317-8959 today.
Subscribe to our newsletter and receive Industrial Insights in your inbox.