©McGraw-Hill Education. All rights reserved. Chapter 15 Legal and Ethics ©McGraw-Hill Education. All rights reserved.

Key Questions Addressed in Chapter 15 How can we assure that the legal record reflects the commercial agreement? How can we confirm the legal record? How can we assure that supply personnel deal ethically and in conformance with regulatory requirements as well as organizational values?

Law of Agency Gives legal status to supply personnel Gives the authority as an agent of the organization to attend to the business of supply in accordance with the instructions given by his or her employer Typically instructions are a job description Rationale for title: Purchasing Agent (not commonly used any more)

Uniform Laws A uniform body of law governing the sale of goods within a country and between countries minimizes the risks associated with the acquisition process and facilitates fair and efficient trade USA: Uniform Commercial Code (UCC) with adaptations at the State level Canada: Commercial Law Strategy International: UN Convention on Contracts for the International Sale of Goods (CISG)

A Valid Contract Is Based on Four Factors Competent parties - either principals or qualified agents Legal subject matter or purpose An offer and an acceptance Consideration (bargained-for exchange) ©McGraw-Hill Education. All rights reserved.

Common Law and the Purchase of Services The UCC does not address contracts for services Common law governs the purchase of services contracts solely for services contracts wherein services and goods are bundled and the service portion equals more than 50 percent of the value of the contract Common law develops over time as courts make decisions on a case-by-case basis, developing what is known as “case law”

Intellectual Property (IP) Refers to creations of the mind: inventions, literary and artistic works; designs; and symbols, names and images used in commerce (World Intellectual Property Organization—www.wipo.int) Protected in law through Patents Copyright Industrial designs Trademarks

Product Liability Refers to liability of any or all parties along the manufacturing supply chain for damage caused by that product Includes the manufacturer of component parts an assembling manufacturer the wholesaler the retail store owner Liability suits filed over inherent defects in products that harmed consumers

Alternative Dispute Resolution Any means of settling disputes outside of the courtroom, including Arbitration Mediation Internal escalation Provide an opportunity to reach negotiated settlements and maintain working professional relationships