The Business Counselor Blog™

New Supply Chain Management Disclosure Requirements

This issue of Business Counselor Update includes new forms and commentary that will be incorporated into the Westlaw database Business Transactions Solutions (BTS) in December.  Access to further information requires a Westlaw subscription, which can be obtained by using the contact and ordering information included in the materials.  This issue highlights new supply chain management disclosure requirements adopted in California and include information on launching relationships with new vendors.  Protection of personal information is addressed by a social security number policy and counsel representing employers can take advantage of a template for disclosure of certain basic employment-related information to new employees.  Finally, the issue provides advice on creating a library of the forms needed to quickly and efficiently assist clients in forming and organizing a new corporation.

Supplier Management

Companies that contract with a significant number of outside suppliers should prepare a formal policy that describes the procedures for initiation and management of supplier relationships and one of the areas that needs to be considered is the scope of any compliance obligations that will be imposed on suppliers, a topic that is discussed in this report. 

Due Diligence on Potential Foreign Sales Agents

In many cases, a firm may lack the sales and distribution network and resources to fully realize the commercial poential of one or more of its products.  In such situation, the firm will look to third parties to provide marketing assistance including sales representatives in foreign markets where the firm is not yet ready to invest in developing its own sales and marketing infrastructure.  While sales representatives can be extremely important partners in foreign markets firms must be mindful of their potential liability for the actions of such representatives under the federal Foreign Corrupt Practics Act and this report details the due diligence procedures that should be followed before signing on with a new representative.

Developments Impacting International Shipping Terms

This report covers several developments regarding the drafting of shipping terms in international sales of goods contracts--the effectiveness of the latest version of INCOTERMS on January 1, 2011 and the lack of progress in attempts to eliminate shipping terms from the Uniform Commercial Code.

Antitrust Compliance Checklist

It is essential for companies of all sizes to develop some sort of formal program and procedures relating to antitrust law compliance.  the two principal objectives of an antitrust compliance program should be "prevention" and "detection' and one good tool tool for educating clients is an antitrust compliance checklist. 

Structuring a Distribution Arrangement

When documenting the arrangement with a prospective distributor the manufacturer must carefully consider a variety of strategic issues as well as the nuts and bolts of the economics of the particular business relationship.  This month's report provides valuable guidance on how to structure a distribution arrangement.

Sales & Distribution - Contracting Requirements

In this report I discuss some of the contracting requirements associated with sales and distribution activities--direct sales contracts, employment agreements with sales employees and managers, commission plans and agreements and sales agency and distributorship agreements.

Confidentiality Agreements in Franchising Relationships

One of the most important preliminary contracts in a franchising relationship is a confidentiality agreement covering review of the franchisor's operations manual and other elements of the franchisor's system.  This post includes an example of a confidentiality agreement that might be useful during the negotiations leading up to the consummation of a franchising arrangement.

Using Outside Vendors to Broaden the Product Line

Companies engaged in distribution activities may manufacture their own products and/or enter into agreements with third parties to distribute the products of those parties.  These contracts with third parties are generally referred to as vendor agreements, althought they may also be called distributorship agreements for obvious reasons.  In any case, these arrangements with outside vendors are a good way for companies to broaden their product line, a theme discussed in greater detail in this week's report.

Trademark License Agreement

A manufacturer may often enter a new market by contracting with a partner that will produce the products in accordance with the manufacturer's specifications and then promote and sell the finished products in the market.  The operative agreement for such a relationship is often a trademark license agreement pursuant to which the manufacturer licenses its trademarks to the licensee for exploitation in a specific territory and the licensee agrees to use the trademarks in a manner that preserves the quality of the licensed products and remit royalties to the manufacturer based on sales of the licensed products.  A comprehensive form of trademark license agreement is attached.