Table of Contents
Purchasing and Law: What’s the Connection?
Why should purchasing and supply professionals be versed in purchasing and commerce laws? Every day, purchasers establish and manage business relationships with other commercial entities. The laws affecting these activities are complex, and include laws in the areas of contracts (which is the primary law affecting purchasing); agency (which is the source of legal authority for the purchaser); antitrust, intellectual property, labor and employment; and the environment, to name a few. Without a basic understanding of the legal aspects of purchasing, professional purchasers may encounter trouble. Purchasers who are uninformed concerning the legal aspects of purchasing may find themselves unintentionally or prematurely bound to a contract with a third party, or they may be surprised to find that they are unable to enforce an agreement they thought existed with a supplier. If a problem or dispute arises, they may find that the allowable remedies are less extensive than what was anticipated or they may be faced with unexpected liabilities. Violations could even potentially involve criminal penalties for the purchaser’s organization or for the individual purchaser! However, when armed with some basic knowledge of the laws affecting purchasing, professional purchasers can proceed with confidence knowing that their rights will be protected and that they understand their obligations, risks, and liabilities. They will also be able to spot potential issues and know when to seek legal counsel to avoid or minimize their impact.
Contract Formation and the UCC
As purchasing and supply professionals spend their time conducting transactions with suppliers, contract formation and the UCC are two of the key elements of this process.
Looking Forward: Developing Laws for Electronic Commerce
The use of electronic commerce for the purchase of goods and/or services is growing exponentially. Unfortunately, contract (purchasing) law has not kept pace with the speed of this growth. Therefore, the purchasing and supply professional must be aware of what laws apply, and how terms and conditions are established in this electronic environment.
What’s On the Books: Other Laws Affecting Purchasing and Supply
Although the UCC might be the first body of work that comes to mind when you think of commercial purchases, it is by no means the only legal guideline to consider. There are many other laws, codes, and court interpretations’ precedents that will apply to the purchasing and supply professional’s work, including international issues, antitrust issues, and many others.
Martin J. Carrara, J.D., C.P.M.
Martin J. Carrara is director of contract management in global procurement at Pharmacia & Upjohn Company. He has held various purchasing and supply management positions with Citibank, N.A.; NYNEX/Bell Atlantic; and L.K. Comstock & Co. Mr. Carrara is a former president of NAPMNew York, Inc. and was the 1995 recipient of the J.H. Leonard Award. He is an instructor of C.P.M. review and contract law seminars for various NAPM affiliates, a former adjunct instructor in New York University's Purchasing and Materials Management Certificate Program, and has authored several "Legal Briefs" columns in Purchasing Today® Mr. Carrara holds a J.D. from Fordham University School of Law and MBA and BS degrees from Wagner College. He is a member of the New York and New Jersey Bars.
Ernest G. Gabbard, J.D., C.P.M., CPCM
Ernest G. Gabbard is director of procurement and contracting for Allegheny Teledyne Inc. at their corporate headquarters. He has previously held procurement and contracting management positions with Litton and Hughes. Mr. Gabbard is a frequent speaker on purchasing and contracting law and management for NAPM and the National Contract Management Association, and has taught these subjects for the University of California and California State University. He holds several college degrees, including a Juris Doctorate degree from Santa Barbara College of Law. He is a member of the California State Bar and the Federal Bar Association.
- Gabbard, E.G., "Does U.S. Law Apply?," Purchasing Today®, September 1998
- Johnstone, J.M., "The Robinson-Patman Act: No Barrier to Effective Purchasing," Purchasing Today®, September 1996
- King, D.B., and Ritterskamp, J.J., Desk Book of Purchasing Law, Prentice-Hall, 1993
- Legal Aspects of International Sourcing, Business Laws, Inc., 1998
- Morrison, T., Conway, W.A., and Border, G.A., Kiss, Bow or Shake Hands, Adams Media Corporation, 1994
FOR FURTHER READING
- Axtell, R.E., The Do's and Taboos of International Trade: A Small Business Primer, John Wiley & Sons, Inc., 1994
- Carrara, M.J., "A Contract Clause for Abritration," Purchasing Today®, November 1997
- Carrara, M.J., "The Emerging UCC Article 2B," Purchasing Today®, May 1998
- Carrara, M.J., "Licensing of Software Under UCC Article 2B," Purchasing Today®, July 1998
- Cain, D., "Happy Endings," Purchasing Today®, November 1998
- Dobbins, S.K., Haluch, F.J., and Kolchin, M.G., "What Does 'F.O.B. Shipping Point' Mean?," NAPM Insights, June 1993
- Manos, K.L., "Legal: To Involve or Not To Involve…," Purchasing Today®, June 1998
- Pinkerton, R.L., and Kemp, D.J., "The Industrial Buyer and the Robinson-Patman Act," International Journal of Purchasing and Materials Management, Winter 1996
- Ricketts, D.J., "All's Well That's Contracted Well," Purchasing Today®, June 1998
World Wide Web Virtual Library: Law: Main Index
Indiana University Law School
The Pace Law School CISG Web site provides the text of the CISG, as well as updates on various countries' standing on the issue and related materials.
The New York University Environmental Law Journal
U.S. Federal Government Agencies Directory LSU Libraries
The Joint Committee on Information Technology Resources (JCITR)
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