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					ISQA 439/539

 Legal Issues
    Ethics
    Legal Issues in Purchasing
   Agency: Definition
       One who is legally empowered to act for another.
       An agent has the legal authority to bind his or her
        principal to a contract.
   Duties
       Loyalty
       Obedience
       Reasonable Care
       Accounting
       Information
   Actual and Apparent Authority
  Legal Issues in Purchasing
 Uniform   Commercial Code
   490f 50 States
   Section 2: Law of Sales

   Section 2A: Law of Leases



   Key   Provisions
     Definitions
     Remedies
            Contract Formation
 Offer
 Acceptance
 Consideration
 Competent Parties
 For Legal Purpose


 Sales Authority
 Battle of the Forms and UCC 2-207
 Oral and Written Contracts
       UCC 2-201 Now $5,000
            Contract Formation
 Contracts Formed By Any Means That Shows
  Agreement 2-204
 Firm Offers 2-205
       Irrevocable to stated term or max 3 months
   Acceptance of Offer 2-206
       In form required
       If no requirement, any reasonable manner
       By performance
   Silence CAN NOT CONSTITUTE
    ACCEPTANCE
           Contract Issues
 Mistakes
   Bilateral

   Unilateral

 Modification
 Force-Majeure
         Electronic Transactions
   By Themselves,
       Email NOT Satisfactory for “In Writing” Provision
       EDI Also Not Satisfactory


   BUT… Buyer and Supplier Can Form
    Separate Agreement
       Recognize Each Other’s
            Email
            EDI Transmittals
            Other Computer Order Releases (Automated)
       Trading Partner Agreements
          Acceptance of Goods
 Right of Inspection 2-513
 Acceptance of Goods 2-606
       Notification to seller that goods are conforming, or
        willing to accept in spite of non-conformity
       Buyer fails to inspect in reasonable time

   Revocation of Acceptance 2-608
       Supplier fails to cure defects
       Discovery of latent defects
       Must occur within reasonable time after discovery
       Rejection of Goods
 Improper    Delivery 2-601
   Rejectthe whole, Accept the whole
   Accept part, reject rest

 Rejection   2-602, 3, 4
   Reasonable     time
   Notify seller in reasonable time
   Hold rejected goods with reasonable care
    for seller’s disposition
        Rejection of Goods
 CAN   NOT just rework and backcharge
  without seller’s concurrence
 Must follow reasonable instructions from
  seller for disposition
 After reasonable time, may sell and
  recover expensed, returning balance to
  seller
        Battle of the Forms
 UCC   2-207
  Conflicting terms
  Different, non-conflicting terms
  Materially altering terms
  Terms limiting to just those included
Buyer’s Remedies for Breach
         of Contract
 Contract Assignment 2-210
 Incidental and Consequential Damages 2-715
 Cost to “cover” 2-712
 Liquidated Damages 2-718
 Anticipatory Repudiation 2-610
 Deduction of Damages From Price 2-717
       Notify Supplier of Intention to Do So
       Must be Deduction From Same Contract
Seller’s Remedies for Breach
          of Contract
   If Buyer:
       Wrongfully Rejects
       Wrongfully Revokes Acceptance
       Fails To Pay
       Repudiates Agreement
   In General 2-703
       Withhold Delivery
       Stop Delivery
       Resell and Recover Damages
       Recover Damages for Non-Acceptance
       Cancel
 Seller’s Remedies for Breach
           of Contract
 Incidental   Damages 2-710
   Reasonable   Charges, Expenses
   Transportation

   Care and Custody

   Return Costs
                    Warranties
 Aside From Manufacturer Warranties
 Express Warranties 2-313
 Implied Warranties
       Title 2-312
       Merchantability 2-314
       Fitness for Particular Purpose 2-315
   Exclusion or Modification 2-316
     Conspicuous Writing
     As Is, Where Is, With All Faults
     If Inspection Should Disclose Defects OR
      If Inspection Is Declined, NO IMPLIED
      WARRANTY
               Warranties
 Warranties   Can Be Modified By Course
  of Dealing
 Remedies Can Be Limited By Contract
     FOB and INCO Terms
 Older   Version of UCC
   FOB

   FAS

   CIF

   C&F

       Edition: All Removed
 Latest
 INCO Terms to Apply
 UN Convention on Contracts
for International Sale of Goods
 Similar Objectives to Uniform
  Commercial Code
 Similar to UCC in Function
 Five Significant Differences
 UN Convention on Contracts
for International Sale of Goods
   Five Significant Differences
       Acceptance of Offer: Mirror Image or No Contract
       Contract Price: No Contract Without Firm Price
       Revocation of Offer: May Be Revoked At Any
        Time Prior to Acceptance
       Formation of Contract: At Time of Acceptance
       Oral Contracts: Valid and Enforceable


   CISG May be Preferable to Another Country’s
    Laws
           Conclusions
 Intentis to STAY OUT OF TROUBLE
 Clear, Concise Communication
 Frequent Communication
 Careful Record-keeping
 Understand Rights and Obligations
  Under the Law
                  Ethics
 More   than Gifts and Gratuities
   Cialdini’s
            Influence
   Appearances
    Unethical Sales Practices
 Commercial Bribery
 False Shortages
 False Price Breaks
 Market Allocation
 False Delivery Promises
 Quotation vs. Invoice
 False Representation
 Counterfeit
           Unethical Purchasing
                Practices
 Shopping Bids
 Shopping Ideas
 Samples
 Favoritism
 Payment Terms
 Contract Quantities
 Conflict of Interest
International Ethics Issues
       Cultural Issues
       Reciprocity
Foreign Corrupt Practices Act
       to Make Payments Influencing
 Illegal
  Purchase Decisions
 Exempts “Processing Payments”
 Accounting Requirements
   Applies   to ALL Publicly Traded Companies
  Purchasing and Back Door
           Selling
 Definition


 Why   it Happens

 Remedies
         Ethical Guidelines
 ISM Ethical Standards
 Policies and Procedures
 T’s and C’s
 Annual Supplier Letter
 Business vs. Social Relationships
 Defining “Some”

				
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