contract management body of knowledge
DESCRIPTION
Contract Management Body of Knowledge. Pre-Award Competencies Section 1.1 Laws and Regulations Part 1 of 2. Laws and Regulations. Contracts are legally binding Provisions are enforceable by law Sources Uniform Commercial Code Federal Acquisition Regulation International Contracting law - PowerPoint PPT PresentationTRANSCRIPT
Contract Management Body of
Knowledge
Contract Management Body of
KnowledgePre-Award Competencies
Section 1.1 Laws and RegulationsPart 1 of 2
Pre-Award CompetenciesSection 1.1 Laws and Regulations
Part 1 of 2
Laws and Regulations
• Contracts are legally binding
• Provisions are enforceable by law
• Sources
• Uniform Commercial Code
• Federal Acquisition Regulation
• International Contracting law
• Case Law
Commercial Contracting
• States are primary source of law for commercial transactions
• Statutory and common law
• Private law may establish additional terms and conditions
• Statute may require a specific form (written) or procedure for execution
Where We Are Going ...
• Law of Agency
• The Uniform Commercial Code
• Warranties
• Repudiation
• Sarbanes-Oxley Act
The Law of Agency
• Provides an individual with the power to act for another
• Explicit (written) appointment
• Implied agency through acts.
Types of Agents
• Agent - acts on behalf of another for their benefit
• Principle - one who appoints agent
• Universal agent - broad authority to act
• General agent - more limited/defined powers
• Special agent - powers are narrowly defined and may NOT enter into contracts on behalf of principal
Authority of Agents
• Actual - intentionally conferred upon agent by principal to affect legal relations with third party
• Express - plainly granted with respect to specific actions
• Implied - not expressed but is customary in the industry.
• Apparent - The appearance of being an agent without the actual authority.
Liability for Agent
• Corporations are liable for the acts or promises of an employee if it appears to a third party that the employee has been granted authority to bind the corporation.
The Uniform Commercial Code
• UCC provides framework of law for commercial transactions
• Intent is to provide consistency of law across jurisdictional boundaries
• Each state must adopt UCC separately
• Created by:
• National Conference of Commissioners on Uniform State Laws
• American Law Institute
The UCC
• Enacted in 49 states
• Louisiana has enacted much of UCC but some portions conflict with state’s Napoleonic Code
• Some states have modified specific articles or sections
• When applying UCC the specifics for each state need to be considered
The UCC
• Consists of nine articles - each with one or more parts
• Primary source of agreement and guidance in commercial contracting
• Continuously revised
• Only applies to sale of Goods
• Does not apply to services contracts
The UCC ArticlesThe UCC ArticlesArticle 1 General Provisions
Article 2 Sales
Article 2A Leases
Article 3Negotiable Instrument
Article 4Bank Deposits
Article 4AFunds Transfers
Article 5 Letters of Credit
Article 6 Bulk Transfer/Sales
Article 7 Documents of Title
Article 8Investment Securities
Article 9Secured Transactions
Philosophy Behind the UCC
• Fills in the gaps where the contract may be silent
• Merchants are professionals and should be held to higher standards
• Contracts impose obligation of “good faith”
• What is a reasonable time is defined by the nature, purpose and circumstances
UCC Article 2 - Sales
• Sole source of law governing sales of goods
• Supplemented by state law only to the extent a subject is not addressed by UCC
• Addresses:
• Contract formation
• Performance/non-performance
• Cure rights
• Warranties
UCC Article 2 - Sales
• Contracts for sale of goods > $5,000 must be in writing
• To be enforceable it must:
• Provide evidence a contract for the sale of goods existed
• Signed by party to be charged
• Specify a quantity
UCC Article 2 - Sales
• Does not require:
• Time and place of payment
• Delivery location
• Warranty
• No need to use special forms
UCC Article 2 - Sales
• Contracts not in writing can be validated by “partial performance” (acceptance and payment)
• Signed offers are irrevocable for a reasonable period not to exceed 3 months or as stated in the offer
• Acceptance of an offer may be made by any reasonable method including shipment/promise to ship (performance)
UCC Article 2 - Sales
• Last piece of paper rules ....
• Terms and conditions printed on order forms (by offeror) may be countered by terms and conditions on order acknowledgement
• Such terms are a “counter proposal”
• Counter terms may be accepted if:
• Offer does not expressly reject alternate terms
• Acceptance is conditional on the additional terms
• Objection is made so as to reject additional terms.
UCC Article 2 - Sales
• “Course of Performance” includes acts by either party that are not objected to
• “Course of Dealing” a basis of conduct predicated on past transactions that establish precedent
• “Usage of Trade” are practices or methods regularly observed (customary) and justify an expectation that they will apply to the transaction
UCC Article 2 - Sales
• Modifications need not include consideration but must satisfy the “Statute of Frauds”
• Modifications must be in writing
• Must meet the test of good faith
• Modifications not meeting the above can be considered a waiver.
UCC Article 2 - Sales
• Seller must make best efforts to forward the product to the buyer until payment is received
• Tender
• Buyer obligated to pay when product received and inspected
• Goods must conform in all respects to the terms of the contract
• Buyer may reject non-conforming goods and not be bound to subsequent performance
UCC Article 2 - Sales
• Implied Warranties
• Merchantability - reasonably fit for general purpose for which they are sold
• Fitness for a particular purpose- item is fit for the specific purpose for which it is sold
• Warranties may be disclaimed but disclaimer must specifically state
• No warranty of implied merchantability
• “As-is”
Repudiation• Refusal (especially by public official) of a
contract or debt
• One party may wait reasonable time for performance and then seek remedy for breach
• Can do so while it continues to wait for performance in the case of anticipatory repudiation
• Repudiation may be retracted until next performance is due unless
• Aggrieved party has cancelled or materially altered its position
• Announced it considers the repudiation final
• Parties may require adequate assurances of the other parties performance and may suspend their performance pending such assurance.
Son, I Say Son ...That constitutes
Anticipatory Repudiation
Sarbane-Oxley Act
• Public Law 107-204 July, 2002
• Requires changes to corporate accounting so as to control how value is created/recognized
• Large impact on CM since contracts are principle revenue generating device
• Impacts most seen in commercial (predominantly B to B enterprises) since contracts with Federal Government required more stringent accounting