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Dont let your clients move the goal posts Protect your company

Written by: Robin Carlyle

Article Overview: Large companies with purchasing power have been moving the goal posts and bullying their suppliers to accept new payment terms. Fightyourcorner advises suppliers to put in place good debt management systems to avoid problems in the future. Good debt management should protect companies affected by sudden changes in contract terms.

Dont let your clients move the goal posts Protect your company

We have read recently that Ineos, who run the Grangemouth refinery, where there was a serious dispute recently, have apparently told there 100s of suppliers that their payment terms are to be extended from 30 days to 60 days.

We also read some weeks ago that some of the largest house builders in the UK apparently told their suppliers that they are reducing the value of the contracts by 5%.

If that is the case, what right have these large organisations got to do this? They have no right to alter the terms of a contract which has been agreed between both parties without both parties agreeing to the change.

If what we have read is true, why are they doing this? Because there has been a substantial change in their circumstances, brought on by their own inability to cope with situations which have arisen since the original contracts were signed and not in any way due to their suppliers’ performance.

What are these suppliers going to do? Are they going to just lie back and (not) enjoy it or are they going to fight it? One of them said he wasn’t “comfortable” with it! An under statement you would have thought. Ineos have apparently said they are happy to discus the changes with some of their suppliers.

Two of the most important aspects of any contract are the price and terms of payment. Suppliers need protection from some large organisations bullying them into accepting changes without negotiation and agreement.

Suppliers need to provide comprehensive terms and conditions of trade, for incorporation within contractual terms, to protect themselves against clients who want to “move the goal posts”.

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Article Tags: circumstances, contracts, contractual terms, goal posts, house builders, incorporation, negotiation and agreement, organisations, refinery, substantial change



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