This week’s post includes an excerpt from our co-authored article “PFAS will be increasing concern for manufacturers in year ahead,” published in the Hartford Business Journal’s Economic Forecast issue on January 8, 2024.

There are a lot of trends that we could identify for corporate compliance / litigation, but the one that stands out for me relates to contracts – the lifeblood for many of our clients. 

COVID-19 exposed the weaknesses in our global supply chains and in the business-to-business contracts that drive the entire system.

Manufacturers need to review their long-term agreements or standard terms and conditions if they sell “purchase order to purchase order.”

Most manufacturers are on high alert for business and/or legal terms that can significantly impact their margins, legal rights, etc.

What has changed in the past few years that will only increase in 2024? The rise in the use of contractual templates.

Companies — big and small — are looking for ways to make their contracting process more “efficient,” and thus, everyone is pulling out a template that has been approved up the chain of command.

These templates are filled with contractual clauses — some that make sense and others that do not. These templates also contain clauses that often have no relevance to the actual contractual negotiation that is going on.

Templates have made contracts longer in length — not shorter. And, because of all the extraneous language and clauses that are included to make the template effective, the negotiations are dragging on for months.

Time will tell if the manufacturing industry moves away from the templates to get deals done quicker in 2024 and beyond.