abstract As the first line of defense for enterprise material procurement, contract legal risk management is very important. According to the characteristics of legal risk management of material procurement contracts, combined with the management process of material procurement contracts, this paper aims to elaborate the common and characteristic problems in the practice of legal risk management of enterprise material procurement contracts, and put forward suggestions for improvement.
author : Li Jing
key word : material procurement; Contract; Legal risk; Administration
(Contract Law Thesis) Model Article: Legal Risk Management Practice of Enterprise Material Procurement Contract
1、 Material procurement contract management process
The management of material procurement contract can be divided into contract conclusion stage, contract performance stage and post evaluation stage of contract management from a large perspective. The contract conclusion stage includes credit investigation, contract negotiation, contract drafting, contract countersigning, contract approval, contract signing and other links; The contract performance stage involves contract performance, contract supplement and change, contract settlement, contract dispute settlement, contract termination and other links; Post evaluation of contract management means that enterprises should gradually establish a contract performance evaluation system, analyze and evaluate the overall performance of contracts and the performance of major contracts, and timely improve the deficiencies found in the analysis and evaluation of contract performance. Archives management, contract confidentiality, analysis and assessment run through the whole contract management business.
2、 Risks in the management of material procurement contracts
The material supply department has been continuously strengthening the contract management of the enterprise for many years. The contract management has always been at the forefront of the group company, but there are still some risks in each link of contract management:
2.1 Improper qualification of contract subject during contract investigation
Main risk description: ignoring the subject qualification review of the investigated object, the quasi contract object does not have the corresponding civil capacity and civil capacity or does not have specific qualifications, signing a contract with the subject that does not have agency power or ultra vires agency, resulting in invalid contracts, or causing potential risks; Misjudged the credit status of the investigated object before signing the contract, or failed to pay continuous attention to the other party's credit changes during the performance of the contract, resulting in losses to the enterprise; Give improper evaluation on the performance ability of the investigated objects, identify the objects without performance ability as the quasi contract objects, or exclude the objects with performance ability from the quasi contract objects.
2.2 In the drafting stage of contract negotiation, the focus and strategy of contract negotiation are unclear and the specific contract terms are not rigorous
Main risk description: ignore major contract issues or make improper concessions on major issues; Inadequate negotiation experience and lack of support of relevant knowledge, resulting in loss of enterprise interests; Disclose the negotiation strategy of the enterprise, resulting in the enterprise being at a disadvantage in the negotiation. The content and terms of the contract are incomplete, imprecise and inaccurate, or there are major omissions and fraud, or the contract form is inappropriate, resulting in unclear rights and responsibilities, litigation risk or damage to the company's interests. Intentionally splitting the contract and evading the contract management regulations, which led to the slow progress of the project and the company into legal disputes.
2.3 In the stage of contract review, approval and signing, avoid the control process becoming formalistic
Main risk description: due to the professional quality or work attitude of contract countersigners, improper contents and terms in the contract text cannot be found; Although the countersigners found problems through review, they did not put forward appropriate revision opinions; The contract drafters did not modify the contract according to the improvement opinions of the reviewers, making the countersignature a formality; The contract was signed beyond the authority, the contract seal was improperly managed, the signed contract was tampered with, and the contract was invalid due to incomplete procedures. If the contract text has to be submitted to the relevant competent department for review and approval or filing, the corresponding procedures have not been performed, and the contract is invalid due to incomplete procedures.
2.4 The contract cannot be performed normally during the contract performance, settlement and supervision stages
Main risk description: the enterprise itself or the other party to the contract did not properly perform the obligations agreed in the contract; After the contract comes into force, there is no timely agreement to supplement the matters not clearly stipulated in the contract terms, resulting in the failure of normal performance of the contract; Improper handling of contract disputes has resulted in the enterprise being punished by the regulatory authority, litigation failure, and damage to the enterprise's interests and reputation.
2.5 Improper management of contract registration and business without signing a contract
Main risk description: the contract statistics, classification, archiving and filing are not properly carried out, and the contract registration inspection is not carried out, resulting in improper contract registration management, incomplete contract files, contract disclosure and contract abuse. It is difficult to provide evidence for the business that should be contracted without a contract, which leads to the inability to protect the legitimate rights and interests of the company.
3、 Risk management and control during contract performance
3.1 Effective control of default risk
The characteristics of legal risk in the performance of enterprise material procurement contracts focus on the default risk of the other party. The main way to effectively control the risk of default is to make necessary assessment of the other party's performance ability, and track and supervise the performance process. The material procurement department shall judge the performance ability and credit level of the other party according to the operating status, past cooperation, user unit evaluation and other factors. If necessary, it can assign a special person to take charge of the dynamic management of the material procurement contract, grasp the contract implementation progress in real time, and regularly analyze the performance of the material procurement contract, Timely coordinate and solve abnormal problems in contract execution.
The performance report system shall be implemented for major procurement contracts. Once abnormal conditions are found, they shall be reported to the superior in a timely manner, and corresponding measures shall be taken to minimize the losses. During the performance of the material procurement contract, pay special attention to the delivery time of the subject matter of the contract, and urge the seller to deliver the subject matter on time; Pay attention to the quality inspection of the subject matter of the contract. If the subject matter does not meet the quality requirements agreed in the contract, it shall be returned or replaced in a timely manner; There are confidentiality clauses in some material purchase contracts. Notice should be given to contract executors to protect trade secrets.
3.2 Correct handling of contract changes
During the actual performance of the material purchase contract, it is difficult to fully comply with the contract due to various events that affect the performance of the contract, such as the delay of delivery of goods due to the weather, the sudden and substantial increase in the price of raw materials, and the change in the price of goods, One party will always negotiate with the other party to change some terms of the contract after the situation occurs. Changes in the content of the material procurement contract mainly focus on the following aspects:
(1) Increase or decrease of subject matter quantity;
(2) Change in the quality of the subject matter;
(3) Increase or decrease of price;
(4) Change of time limit and place of performance;
(5) Change of settlement method;
(6) Change of liquidated damages, etc. The changes to the above contents should be specific and clear. It is better to sign a supplementary agreement in written form to prevent contract disputes, and ensure better performance of the contract by modifying the original contract to achieve the purpose of the contract.
3.3 Proper settlement of contract disputes
In real life, due to the different integrity of each enterprise or asymmetric information and other reasons, the performance of a contract often leads to various disputes, large or small. The same is true for disputes over material purchase contracts. It is generally believed that litigation is a way of "wasting people's money". When disputes over material procurement contracts arise, we should weigh the advantages and disadvantages and try our best to mediate.
If the negotiation fails, the parties may choose litigation or arbitration to settle the contract dispute according to the agreement in the contract. In the litigation of disputes over material purchase contracts, attention should be paid to the limitation of action. The limitation of action for general sales contracts is two years; The period of limitation of action for selling substandard goods without declaration is one year; The limitation period for claims for damages caused by product defects is two years; The limitation period of action for disputes over contracts for the international sale of goods is four years.
4、 Risk control after contract performance
4.1 Establish and improve material procurement contract files
The archives of the material procurement contract mainly include: the original, duplicate and annex of the contract, contract negotiation records, process control records, supervision reports, communication letters, agreements on contract change and termination, and the handling and results of problems. In addition, contract text signing records, various ledgers, statements, leadership instructions and other data in the management process of material procurement contracts should also be classified and filed.
The contract management department of the enterprise shall properly keep the archives of the material purchase contract, establish a detailed management account of the material purchase contract, and submit it to the archives management department for storage after the contract is terminated and all processes are completed.
4.2 Attach importance to the management of material purchase contract attachments
Most enterprises generally integrate the basic attachment module of the contract into the contract system, such as《 Incorruptible Employment Responsibility Statement 》Technical Annex《 Confidentiality Agreement 》And《 Safety Production Management Agreement 》Etc. However, in actual work, enterprises often pay less attention to the annex of the material purchase contract than the contract itself, and their contract management system does not make detailed requirements and assessment on the signing of the annex of the contract.
However, in the contract management department of enterprises, the main text is serious and the annexes are random. Material procurement is a high-risk occupation for honest employment. For large state-owned production enterprises, the work of material procurement should also be responsible for the user, i.e. the production unit. If you do not attach importance to the contract annexes, it is easy to generate potential legal risks of the contract.
Conclusion
The legal risk of material procurement contract is one of the important sources of enterprise business risk. It is necessary to enhance the awareness of contract legal risk, establish a sound legal risk management system for material procurement, carefully review the qualification of suppliers, sign a clear, legal and effective procurement contract, strengthen contract information management, and control the legal risk of material procurement contract, Only in this way can enterprises find a way to keep the balance between risks and benefits.
reference:
[1] Zhang Yong. Legal Risk Management Practice of Enterprise Material Procurement Contract [J]. Enterprise Reform and Management, 2015 (9): 6-7
[2] Wen Yan. Analysis on Legal Risk Control of Enterprise Material Purchase Contract [J]. Enterprise
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