By: Will Cray, Senior Sales Executive / Risk Advisory Solutions - Welding & Gas Distributor Practice
Most of you have signed contracts with major gas suppliers, vendors, or contractors that you do business with quite frequently. Many purchase orders have contractual language in them as well. How closely are you reading these contracts?
Today we are here to talk with you about contracts. Do you know what you are signing before you put pen to paper? What have you done to ensure you are not taking on someone else’s liability or sole negligence?
Here is a quick story to demonstrate the importance of contract review!
One of our customers had a third party bulk delivery done on their behalf by a major. After the delivery, it was found that the manufacturer receiving the gas had a million-dollar piece of machinery destroyed. The client sued the major who in turn tendered the claim to our distributor because of language found in their contract.
How would you feel if you were handed a million-dollar claim for something that happened when you weren’t even responsible?
Many times, especially when it comes to the majors, there is language in these contracts that requires you to take on their “sole negligence.” If they were to hit your customer’s employee or back into their building, you would then have to handle the resulting claim, regardless if you were present or not! This is a prime example of terms addressed in these contracts.
We review contracts for our customers regularly. We have a 20-point checklist for reviewing the terms and conditions, as well as the insurance and indemnification language in these contracts. The review of contracts and agreements needs to be a key part of your risk management strategy.
At The Horton Group, we can help you develop a process to identify how to drive down costs, workload, and risk, especially as it relates to contract review. We would be happy to explore this topic with you at length and, or review one of your contracts to demonstrate this in action – make sure to contact a Horton representative today.
