When you are the customer purchasing goods are services at a substantial price, you might turn to a formal, written contract to ensure that the transaction goes smoothly. Many customers simply sign the contract provided by the vendor. This can be acceptable if certain key provisions are included and set proper expectations between the parties. However, with vendor contracts, this is rarely the case. Usually, vendor agreements are quite vague as to the sale being completed on time and on budget as previously discussed with the customer. This vagueness gives the vendor room to maneuver to, among other actions, delay delivery, extend configurations, identify problems during installation, upset additional goods and services, and maximize short term gains against the customer's interests. This is one of many reasons why the best vendors tend to be ones that prefer building long term value for their customers through repeated sales over many years, instead of seeking to exploit maximum value from a customer in a one-off sale that leads such a bad taste in the customer's mouth that they vendor can't reasonably hope for future sales.

A customer should definitely emphasize the goods and services description as well as the payment sections in a sample purchase agreement.

Description. First off, the customer needs a clear description of what is actually being purchased. While this may sound simple, if a customer is purchasing newly developed equipment and software designed to improve productivity in manufacturing operations, such a description can be quite elaborate. I've regularly seen specifications for these kinds of capital equipment goods and services consist of hundreds of pages. The biggest problem with overly lengthy descriptions is that they are not written from a legal perspective. A legal orientation requires that all of the writing in the description be unimpeachable, crystal clear language that leaves almost no room to argue as to what functions, capabilities and qualities the goods and services consist of. Instead, these descriptions are often prepared by the vendor's salespeople, who by definition are seeking to engage conversationally with a customer about its implicit and explicit needs and explain how they can fulfill those needs to allow the customer to increase its profits. In doing so, such kinds of conversations can be quite circuitous, and often times the goods/services description itself reflects this ambiguity in its writing. Customers often times are partially to blame, by engaging in such routine behaviors as constantly changing their expectations and increasing the number of functions they want the sales offering to fulfill. The ultimate problem, though, is that if there is a later dispute where the customer feels that the equipment or services do not live up to initial expectations, then the normal solution, turning to the contract for clarity, is off the table because the parties did not do a good job of agreeing to exactly what was being purchased in the sample purchase agreement.

Payment. Once a client of mine who was a procurement manager at a Fortune 500 company asked me to draft an amendment to an existing purchase contract for a deal he was working on. After reading the original contract, I noticed that it did not include not a single word defining the price and payment schedule for the goods. When I told him that his company and the vendor failed to agree on the price, he assured me I was wrong and emailed me a Powerpoint presentation that included vague pricing terms. I pointed out to him that the contract explicitly stated that any documents outside of this written agreement, such as a Powerpoint presentation, have no force whatsoever. He told me that was surprising. I emphasized that we needed to include proper pricing in the new amendment, but due to the vagueness of the Powerpoint terms, that required several negotiations with the vendor to nail down exactly what the product cost. If this is how business is conducted at some of the biggest companies in America, just think about how poor the contracting function must be nationwide across all levels of business. Perhaps no issue is more important to properly describe in a purchase agreement than the payment provision. The exact amount to be paid, the timing of payments, the invoice process, the payment deadline after invoicing (e.g., from the date of the invoice or the date of customer's receipt), volume discounts, and tiered payment bands are all serious issues to consider and clarify in the contract itself. If you do not do so, then if you later dispute a bill from a vendor, you really don't have any persuasive ground to stand on without a clearly written purchase agreement to back up your argument.

Hopefully this more sophisticated understanding of the goods and services description as well as the payment provisions will allow you to better craft a rock solid sample purchase agreement.