Retail Contract Management 101 in an e-procurement world. Oral Contracts.

October 1st, 2010

There is an old joke that "an oral contract isn't worth the paper it's written on"

How much product is purchased by retailers using e-procurement tools for sale or for reuse that never ends up in an electronic or paper document/contract that insures the T&C?s negotiated are written down, tracked or executed upon?

Unfortunately, there are many more of these types of agreements in place than anyone on either side of an e-negotiation wants to admit, and your contract management software provides no answer to this problem unless senior management edicts that all purchases will have a contract in place before delivery or contract execution begins. And, with that in place will come delays you won?t believe that will in most cases insure that dates in your terms and conditions of your e-procurement events are also not met.
According to it can be very difficult to prove that an oral contract exists. Absent proof of the terms of the contract, a party may be unable to enforce the contract or may be forced to settle for less than the original bargain. Thus, even when there is not an opportunity to draft up a formal contract, it is good practice to always make some sort of writing, signed by both parties, to memorialize the key terms of an agreement.
At the same time, under most circumstances, if the terms of an oral contract can be proved or are admitted by the other party, an oral contract is every bit as enforceable as one that is in writing.

Ask your e-procurement solutions provider how they would address this problem and as always, be careful out there.

We look forward to and appreciate your comments.

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