What Should a Reorder Clause in a Supply Contract Say?

Most supply agreements are written to buy a product once. They describe the goods, fix a price, set a date and say something general about quality. That is adequate for a single purchase and almost useless on the fourth reorder, where the questions are not about the goods but about whether these goods are the same goods.

The gap shows up predictably. A buyer rejects a run for a shade difference and is told that no shade band was agreed. A component is swapped and is told that no register existed. A remedy is demanded and is told that none was specified. In each case the buyer is right about the product and wrong about the paperwork, and the paperwork decides.

Why Does a Reorder Need Its Own Clause?

Because the obligations are different. A first order asks a party to make something to a description. A repeat asks it to make the same thing again, which is a different undertaking requiring a definition of same, a mechanism for agreeing what changed, and a remedy for the case where it changed without agreement. None of those three exists in a conventional purchase clause.

It also fixes the price of memory. Without a clause, every repeat re-litigates what was agreed, and the party with the better records wins. With one, the agreement survives staff changes on both sides, which is the practical reason these clauses are worth drafting.

What Does the Clause Bind the Specification To?

A version, identified by number and date and annexed to the agreement. Not a sample, not an email, not a description, and not the previous order. A numbered file with a version date is the only specification that can be pointed at in an argument, because it is the only one both parties hold an identical copy of.

The clause should say three things about it: that the current version is the one named in the schedule, that a new version takes effect only when signed by both parties, and that production may not proceed on an unsigned version. That last sentence is the one that stops the slow accumulation of unrecorded changes which eventually makes a repeat unrecognisable.

How Is Change Controlled in Contract Terms?

With a notice, a lead time and a signature. The clause should state that any change to material, component, construction, finish or process requires written notice before the run is booked, that the buyer has a stated number of working days to respond, that silence is not consent, and that a change made without that process is a breach rather than a variation.

The pair of sentences that matter most are the second and third. A response window without 'silence is not consent' becomes a route to change by exhaustion, and a change without 'a breach rather than a variation' becomes something the buyer is deemed to have accepted by receiving the goods.

Price the change too. The clause should say that a requested change is quoted before it is made, and that a change made to save cost without agreement entitles the buyer to the original specification on the next run at no additional charge. That removes the incentive to drift quietly.

What Does the Acceptance Clause Have to State?

Four numbers and a procedure. The standard, the sample size, the accept and reject numbers, and the time allowed for inspection. Stating AQL 2.5 under ISO 2859-1 at General Inspection Level II is the short form; the schedule should carry the resulting sample sizes for the quantities the programme actually orders, so that neither side is doing arithmetic during a disagreement.

Then the procedure: who inspects, where, when, at whose cost the first inspection is made, what happens to a lot that fails, and how long the buyer has to reject after goods-in. A rejection right without a deadline is a liability the other side will price into the unit figure, and rightly so.

How Are Reference Samples Given Contractual Status?

By identifying them, sealing them, splitting them and saying what they decide. Identify each one by style, run and date; seal it with a signed tag across the seal; hold one with each party; and state that where a measurement is ambiguous, the sealed reference governs. Four mechanics, and they turn a sample from an artefact into evidence.

Say what happens when one is lost, damaged or fades, because all three happen and the clause that is silent about it becomes the clause that ends the reference system. The usual answer: the holder notifies the other party within a stated period, the units are compared against the surviving reference, and a replacement is cut from the next run and sealed by both parties.

Fading deserves its own sentence. Textile references fade, and a sealed panel stored in an office window will not match a fresh production run in two years. Store references in the dark, in a sealed envelope, and re-cut them at the annual review whether they have faded or not.

What Does the Price Clause Say About Repeats?

Three things: what is fixed, what is re-quoted, and how long a quotation stands. A standing price for a defined period with a defined set of triggers for re-quoting is better for both parties than a fresh negotiation each run, because it makes the programme plannable and stops the price conversation from consuming the calendar.

Name the triggers precisely: a change to the specification, a change to quantity beyond a stated percentage, a named raw material moving beyond a stated percentage, a change to packing or marking, and a change to the agreed payment or delivery terms. Anything not on that list is inside the standing price, and that sentence is what makes the standing price worth having.

Payment and delivery belong in the same breath. T/T 30/70 with the balance against documents or against an approved inspection report is the arrangement most programmes use, and FOB Xiamen is the usual delivery term. Say which document releases the balance, because that single sentence is what makes the inspection gate real.

How Are Remedies Written So They Are Enforceable?

As a ladder with a trigger, a deadline and a payer on every rung. Sort at whose cost within how many days. Rework to what standard, re-inspected by whom, delivered by when. Replacement within how many days of the rejection, at whose freight cost. Credit at what rate, settled against which invoice, within how many days. Four rungs, twelve fields.

The most common drafting failure is a remedy without a payer. A clause entitling the buyer to rework says nothing about who pays for the sorting, the freight or the second inspection, and those three items are where the money actually is. Name the payer on each rung and the clause becomes operable.

• Rung one: sort, at the production side cost, within five working days.
• Rung two: rework to the original standard, re-inspected at AQL 2.5, at a stated date.
• Rung three: replacement, freight and duty for the replacement borne by the party at fault.
• Rung four: credit against the outstanding balance, agreed in writing within ten working days.
• Any rung: the buyer may elect the next rung if the deadline for this one is missed.

That final line is what stops a remedy being delayed into worthlessness. A right to rework that takes four months is not a remedy; it is a negotiation about a season that has already passed.

What Does the Clause Say About Records and Access?

What must be kept, for how long, and what the buyer may ask to see. The list that matters on a repeat: the inspection report, the measurement sheet, the photo set, the material and component records for the run, and the first-piece check. Two years of retention covers most programmes, and the clause should say the records are produced within a stated number of working days of a written request.

Access is narrower than an audit and should be drafted that way. The buyer needs the right to verify that the process described in the file is the process being run: a first-piece check witnessed, a measurement repeated, a component traced to its purchase record. That is a process check, not a general compliance exercise, and keeping the clause to it is what makes it acceptable to sign.

How Long Does the Clause Run and How Is It Renewed?

Twelve months, renewing automatically unless either party gives written notice, with a scheduled review inside that period at which the schedules are updated. Automatic renewal keeps the paperwork alive through staff changes, and the scheduled review is what stops it becoming a document nobody has read since it was signed.

The review should have an agenda fixed in the clause: what moved on the last four runs, which bands were never tested by events, which components reached end of life, whether the reference samples need re-cutting, and whether the remedy ladder was used. Five items, one meeting, and the agreement stays accurate.

What Belongs in the Schedule Rather Than the Body?

Everything that changes. The clause body should be short and stable; the schedules carry the numbers, the bands, the register, the sampling table and the file version, and they are amended by a signed page rather than by reopening the agreement. A buyer who puts tolerances in the body will face a full renegotiation every time a band needs moving.

None of this is exotic drafting. It is a page and four schedules, and most of the content already exists in a well-kept spec file. The clause does the one thing a file cannot: it makes the contents of that file an obligation rather than an intention.

Worth saying plainly at the end: a clause is only as strong as the file it points at. Signing a reorder clause before the specification, the tolerance table and the component register exist produces an obligation to make something undefined, and that is worse than having no clause at all.

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