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PLAYBOOK TEMPLATES

Sales Agreement (Goods Supply Contract)

A Sales Agreement establishes the legal framework for the sale and supply of goods between parties, setting terms for pricing, delivery, and risk transfer. This playbook examines key negotiation points including warranties, payment terms, and remedies for breach.

Force Majeure

Why This Matters: Poorly drafted clauses can leave parties exposed to performance liability during true emergencies.

Negotiation strategy

If you're the Company:

Ensure the clause includes a comprehensive list of force majeure events and a clear notice requirement. Advocate for a reasonable duration for suspension of obligations and termination rights.

If you're the Sales Agent:

Negotiate for a balanced definition of force majeure events to avoid abuse. Ensure the clause includes a prompt notice requirement and reasonable mitigation efforts.

Essential elements

1

Force Majeure Definition

Defines events beyond control.
2

Notice Requirement

Mandates prompt communication.
3

Termination for Extended Force Majeure

Allows termination after prolonged event.

Action framework

ACCEPT

Propose edits if the clause lacks a clear notice requirement or if the list of events is too narrow.

EDIT

Reject if the clause allows parties to escape obligations unjustifiably.

ADD

Add if the clause is missing to protect against unforeseen events.

PRO TIP

Ensure the clause is neither too broad nor too narrow, maintaining a balance that protects against genuine disruptions.

Example clauses

FAVORABLE

Preferred Clause

"Force Majeure Event" means any event or circumstance beyond the reasonable control of the affected party, including but not limited to acts of God, war, terrorism, civil commotion, labor strikes, governmental actions, natural disasters, or any other similar events that prevent the affected party from performing its obligations under this Agreement.
NEUTRAL

Standard Force Majeure Clause

"Force Majeure Event" means any event or circumstance beyond the reasonable control of the affected party, including but not limited to acts of God, war, terrorism, civil commotion, labor strikes, governmental actions, natural disasters, or any other similar events that prevent the affected party from performing its obligations under this Agreement. In the event of a Force Majeure Event, the affected party shall notify the other party in writing as soon as reasonably practicable, providing details of the event and its expected duration. The affected party shall use all reasonable endeavors to mitigate the effects of the Force Majeure Event and resume performance of its obligations as soon as possible.
UNFAVORABLE

Excessive Termination Period

"If a Force Majeure Event continues for a period exceeding 120 days, either party may terminate this Agreement by giving written notice to the other party."

Fallbacks

High-Risk Projects

In high-risk projects, ensure the force majeure clause is robust, with a detailed list of events and a clear process for notification and mitigation.

International Contracts

For international contracts, consider including specific geopolitical events and local regulations that may impact performance.

Supply Chain Agreements

In supply chain agreements, focus on events that could disrupt logistics and delivery, ensuring prompt communication and mitigation strategies.
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