Price
The price that Trane is expected to pay is not sufficiently clear in the contract. In section 2.3, the contract indicates that prices will remain fixed unless later on agreed in the purchase order. This provision gives the buyer the opportunity to alter prices in the future from the purchase order. It also indicates that price should not be altered unless agreed upon in writing by the buyer. The implication is that the buyer has the upper hand in changing the price of goods provided. The contract equally indicates that if a competing firm offers a lower price, the buyer can terminate the contract and purchase goods from the new supplier (Rose, 2015).
Termination
The contract indicates that Trane will be purchasing 5 million widgets per year for five years. When Trane terminates the contract, it will not be required to cater for damages emanating from such termination. As indicated in section 2.4, the buyer has the right to terminate the contract either in part or whole. The section indicates that the buyer will not incur responsibility for such termination except for the products that had been delivered before the termination of the contract. Section 2.25 indicates that the buyer can source for products from competing forms in case the supplier changes ownership or is insolvent (Brook, 2015).
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Warranties
The contract indicates that the supplier will provide warrant that the goods supplied have no liability from third parties and that they are of the right quality. The buyer is liable to reimburse the buyer for cost incurred under warranty. The liability of the supplier goes beyond the business as indicated in section 2.12 on indemnification where employees and other agents to the firm can also be held accountable in case of such loss (Brook, 2015).
Quality improvement
Section 2.25 of the contract requires that the goods supplied should be in line with the quality needs of the buyer. The supplier is expected to maintain quality assurance system. The contract requires that the buyer should be ready to adopt measures of improvement as required by the buyer. The implication is that the buyer may be forced to incur extra costs, something that would end up pushing profit levels down. The buyer is also allowed to reject goods something that may end up pushing gains from sales down (Brook, 2015).
Delivery and delays
Section 2.11 of the supply contract indicates that the sale is not complete until products have been presented to the buyer in line with the set out conditions. The supplier should communicate to the buyer in writing of any anticipated delay in delivery of the products. The supplier will be liable to the buyer for any costs incurred as a result of the delay in delivery. Section 2.21 indicates that the delay in delivery will be excused if such delay is beyond the control of the supplier (Botterud, Bahe-Jachna, & American Bar Association, 2015).
Freight term
Section 2.147 indicates that unless otherwise agreed the terms of freight should be on F.O.B bases. UCC does not apply in this case since it will be central to the provisions of section 2.17.
Sarbanes Oxley Act
Section 2.33 requires that all goods delivered comply with the law. Nevertheless, there are no direct provisions in the contract that addresses the issues related to Sarbanes Oxley Act and FCPA. It would thus be important for the supplier to engage the buyer in ensuring that clear provisions in line with the act are embedded in the contract. Such improvements including requiring both parties to maintain financial records for the period that they will be under contract as required by the Sarbanes Oxley Act (Botterud, Bahe-Jachna, & American Bar Association, 2015).
UCC
The contract has not indicated express explanation that the supplier should stop supplying the widgets to the buyer if the buyer is not to paying on timely bases. It would thus be important for the supplier to engage the buyer and indicate that such supply of goods would cease in a scenario where the goods are not being delivered on timely bases. UCC favors the seller when the terms of sale are not clear. The uniform commercial code will not be applicable in this case as the conditions of agreement and sale are fully agreed upon in the contract. There is clear indication in the contract of the risk transfers, who to meet costs and other terms of agreement (Botterud, Bahe-Jachna, & American Bar Association, 2015).
Subcontracting
In section 2.9, the seller cannot subcontract production and delivery of goods to the buyer unless there is a prior agreement between the buyer and the seller. A delegation of obligations is thus not allowed unless there is a clear agreement between the buyer and the seller. Even if consent is issued in regards to the subcontracting, the buyer is still held liable for any risk or costs that the buyer may incur in the contract as a result of subcontracting (Botterud, Bahe-Jachna, & American Bar Association, 2015).
Salesperson
The agreement does not portray any understanding of its terms by the salesperson. For instance, the salesperson has recommended the adoption of the agreement in spite of the fact that there are many terms in the contract that are against the interest of customers. For instance, the supplier is likely to lose the contract through termination. The supplier is not empowered to renegotiate the contract and is left at the discretion of the buyer. There is thus no clear understanding of the contract by the salesperson (Botterud, Bahe-Jachna, & American Bar Association, 2015).
References
Botterud, K. F., Bahe-Jachna, R. A., & American Bar Association, (2015). Contract law: Analyzing and drafting . New York: McGraw Hills.
Brook, J. (2015). Sales and leases . New York: McGraw Hills.
Rose, F. D. (2015). Blackstone's statutes on contract. New York: McGraw Hills.
