Procurement Contract Risk Checklist

Does the contract specify unit price, quantity, and currency?

Ambiguity may lead to payment disputes later.

Are payment milestones tied to inspection or acceptance?

Paying before quality verification removes leverage.

Are MOQ and price adjustment mechanisms defined?

Reorders may face unexpected price changes.

Does the contract specify delivery dates and delay penalties?

Late delivery with no contractual remedy.

Is there a force majeure clause with notification obligations?

Supplier may claim indefinite delay with no accountability.

Are acceptance criteria defined (AQL, tolerances, color range)?

Quality disputes become he-said-she-said without standards.

Is there a clear mechanism for rejection, replacement, or refund?

Receiving defective goods with no recourse.

Are liquidated damages defined with calculation method and cap?

Cannot quantify losses or enforce penalties on breach.

Does the dispute clause specify arbitration body and jurisdiction?

May be forced to litigate in an unfavorable venue.

Is an NNN agreement (Non-Disclosure, Non-Use, Non-Circumvention) in place?

Designs and trade secrets may be misused or leaked.

Is ownership of tooling, drawings, and design outputs clearly assigned?

Molds you paid for could be retained or repurposed by the factory.

Is there a non-circumvention clause preventing direct contact with end buyers?

Supplier may bypass you and deal directly with your customers.