A contract is an agreement between two parties to complete a specific task. It is really important to understand how your company contracts with your suppliers. This video explains the basic elements of a standard contract and describes several different applications for contracts in business.
- It usually costs less to avoid getting into trouble…than to pay for getting out of trouble,…so says Louis Brown, who was often called…the father of preventative law.…When it comes to managing contracts in today's…global business environment, this is especially true.…You want to stay out of trouble,…and the key to effectively managing…a business global relationship is…to start with a well-written contract.…But first, what is a contract?…It's an agreement between two parties…to accomplish a specific task.…
You can contract for the sale and purchase of property…or goods, or for the transfer of services.…The specific elements of a contract are highly variable,…but a basic contract will include such things…as price, delivery, and payment terms.…Contracts can be short-term, as with many U-S companies,…or they can establish more long-term relationships,…which is often the case among Japanese companies…who work with some suppliers for life.…One type of contract that is important to you…as a buyer is the purchase agreement.…
- Explain the purchasing process.
- Define purchase order.
- Describe the intent of a purchasing policy.
- Distinguish types of purchasing structures.
- List the steps of selecting a supplier.
- Identify enablers for success in worldwide sourcing.
- Perform price and cost analysis.
- Measure supply management performance.