Tuesday, January 10, 2012

Buyer instructions.

The risk in the buyer providing instructions on what to do or how to do something is that in doing so, the buyer becomes responsible if there is a problem that results from those instructions. The same could apply if the buyer requires the supplier to use a specific supplier or subcontractor. For example if the buyer specified safety requirements for work being performed, the buyer could be liable if a party was injured when complying with those safety requirements. Whether the buyer should include safety requirements really depends upon who has control over the area where the work is being performed. If the Buyer retains control over the area, normally the buyer would want the supplier to meet their safety requirements. If the buyer turned control over a specific area to the supplier such as may occur when a contractor is hired to modify an existing building area, you would normally require the supplier have their own safety requirements and be responsible for managing the safety of their personnel. Once the supplier is operating under their safety requirements and a supplier employee is injured, since you provided no instructions and make the supplier or contractor responsible for safety, the buyer would not be liable. The same issue about buyer instructions can impact responsibilities for designs or responsibilities for whether a product meets the specification, a service meets the requirements, or responsibility for the work.

To manage against the risk associated with buyer instructions there are several things you need to do. First, if you feel that you will need to give instructions, you need to limit who is authorized to provide those instructions. You would also want to define how those instructions will be provided. The more formal the process the better.If you have people within your company that may be able to help with the design or activity you may also to include language to deal with that. For example, you may retain the right to make suggestions that the supplier or contractor is free to accept or reject. In conjunction with the right to make suggestions you would also want to make it clear that if the supplier or contractor agrees to accept those suggestions, they will take as their own and remain fully responsible for the work as if they proposed it in the first place.

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