Essentially, a good contract protects the interests and rights of both buyer and seller. Through eMarketplaces like SourcePilipinas, trading partners are made aware of contractual obligations that go beyond the concept of price. These are among the intangible benefits a company derives, especially if the intention is to formulate an objective long-term relationship with commendable supplier partners.
How does it all work? Under a commercial contract, for example, a supplier is obligated to deliver the goods based on stipulated terms and conditions. Also, purchasers are also obligated to accept and tender payment for goods based on the terms of agreement. There are circumstances, however, that cause either buyer or supplier to breach the agreement, and eMarketplaces help identify areas that may or may not have any valid ground or legal justification.
While resolving the issue is primordial in settling disputes, some trading partners are also quick to outline areas that would entitle them to certain remedies or damages. In fact, purchasers within enterprises should avoid the practice of routinely tolerating suppliers who breach delivery terms, as this could forfeit a buyer’s right to legal action. For example, if a buyer for a firm has systematically accepted late deliveries from a supplier without corresponding courses of action, the purchaser could waive his company’s right to claim legal action for damages as a result of these late shipments. Conversely, if a supplier has routinely tolerated late payment for goods and services rendered to a buyer, the supplier might also waive his claim to legal action on these grounds. Between these examples, the second case is often difficult to take. Owing to a competitive business environment within the Philippine setting, more suppliers are forced to take the bitter pill than lose the business altogether.
Through SourcePilipinas’ Compliance Team, each party in an agreement is accorded time to complete its obligations under a contract. In fact, it becomes much easier to monitor supplier compliance and implement agreed boundaries as facilities are in place that can readily spot unsuitable acts. Procedures are also better formulated to monitor conformity to rejection notices, for example, and decisions to either reject or accept remedy actions are not made haphazardly. Suppliers are protected in turn as a single incident of non-compliance, for example, is not treated as the whole. Overall, eMarketplaces aid in developing and fortifying internal reporting systems that ensure proper monitoring of deviation from agreements within a reasonable time, and that remedies are seriously pursued. eMarketplaces also help prevent or mitigate problems due to acceptance or rejection of goods, and tips are given.
Value-adds are also in place relative to contract formulation, specifically in enabling enterprises to formulate contingency elements when it comes to long-term agreements. Further circumspection in prices bid online is monitored, up to a level that would allow suppliers to perform based on expectations equally acceptable to buyers concerned. Price adjustment mechanisms are also taught, especially in selecting a comparative index that can aid buying decisions. Also, supplier performance improvements are set that can fortify criteria measurement. Lastly, buyers are trained in setting evergreen clauses that would allow both buyer and seller to effect a joint periodic review of the entire negotiated contract.
Simplifying an administrative-intensive compliance route is just among the benefits trading partners get via eMarketplaces. Improved transparency enhances an enterprise’s long-term growth, where processes are streamlined and information is maximized.