Machinery suppliers often face terms and conditions prepared by their customers that are totally one-sided and that are said to be non-negotiable. What to do? Do not overlook the power of saying "no."
Machinery sellers recognize that they are going to have to agree to terms that require them to stand behind their products, which will include a reasonable warranty and other provisions that provide the customer with assurance that the seller will perform and a reasonable remedy if the seller does not. That does not mean that a seller should agree to provisions that in effect require the seller to insure the customer against anything bad that may happen.
It is important for sellers to understand that terms and conditions are probably enforceable and that there are consequences and risks in accepting unreasonable terms. Sellers should thus establish limits regarding the amount of contractual risk they are willing to accept and then must be willing to stick to those limits.
If a customer insists on terms that contain unreasonable provisions, a seller has to be willing to say "no" and walk away from the transaction. Saying "no" does not have be be done in an unpleasant or combative manner. The seller should explain why the term is unacceptable and should also explain what alternative provision the seller is willing to accept.
Saying "no" does not always result in losing the transaction. Some customers will simply not believe you until you show you are willing to walk away, and will then come back to the table.
It is of course possible that a seller will lose some transactions. However, a transaction based on unreasonable terms from a customer unwilling to talk about them is probably not a good way to start a business relationship.
Machinery sellers recognize that they are going to have to agree to terms that require them to stand behind their products, which will include a reasonable warranty and other provisions that provide the customer with assurance that the seller will perform and a reasonable remedy if the seller does not. That does not mean that a seller should agree to provisions that in effect require the seller to insure the customer against anything bad that may happen.
It is important for sellers to understand that terms and conditions are probably enforceable and that there are consequences and risks in accepting unreasonable terms. Sellers should thus establish limits regarding the amount of contractual risk they are willing to accept and then must be willing to stick to those limits.
If a customer insists on terms that contain unreasonable provisions, a seller has to be willing to say "no" and walk away from the transaction. Saying "no" does not have be be done in an unpleasant or combative manner. The seller should explain why the term is unacceptable and should also explain what alternative provision the seller is willing to accept.
Saying "no" does not always result in losing the transaction. Some customers will simply not believe you until you show you are willing to walk away, and will then come back to the table.
It is of course possible that a seller will lose some transactions. However, a transaction based on unreasonable terms from a customer unwilling to talk about them is probably not a good way to start a business relationship.
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