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PLAYBOOK TEMPLATES

Purchasing Terms and Conditions

Purchasing Terms and Conditions outline the baseline commercial and legal framework for buyers when acquiring goods or services. This playbook guides you through essential clauses like payment, delivery, and liability, ensuring consistent protection across suppliers.

Liability and Indemnities

Why This Matters: Limiting liability and clarifying indemnities prevents disproportionate financial exposure and reduces the risk of catastrophic damages.

Negotiation strategy

If you're the Buyer:

Negotiate for a liability cap tied to the contract value to ensure financial exposure is proportionate. Advocate for reciprocal indemnities with clear carve-outs for gross negligence and willful misconduct.

If you're the Supplier:

Ensure that indemnification obligations are mutual and include necessary carve-outs. Propose adjustments to the liability cap based on changes in contract value.

Essential elements

1

Liability Cap

Limits financial exposure.
2

Indemnification Obligations

Defines mutual indemnities.
3

Carve-Outs

Excludes certain liabilities.

Action framework

ACCEPT

Propose edits when liability caps are not tied to contract value or indemnities lack mutuality.

EDIT

Reject clauses that impose unlimited liability or lack necessary carve-outs.

ADD

Add language to establish liability caps and mutual indemnities if absent.

PRO TIP

Always ensure liability caps are explicitly tied to the contract value to maintain proportionality.

Example clauses

FAVORABLE

Preferred Liability Clause

"The total liability of either party... shall not exceed the total amount paid or payable under this Agreement."
NEUTRAL

Standard Indemnity Clause

"Each party agrees to indemnify the other against claims arising from their actions."
UNFAVORABLE

Unlimited Liability Clause

"The liability of either party is unlimited and not subject to any cap."

Fallbacks

High-Value Contracts

For contracts exceeding a certain value, consider additional liability protections such as higher caps or insurance requirements.

International Agreements

In cross-border deals, ensure indemnities comply with local laws and consider currency fluctuations in liability caps.

Technology Transactions

For tech deals, include specific carve-outs for data breaches and intellectual property infringements.
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