General Motors has announced that Effective July 15, 2013, its general terms and conditions for direct material, customer care & aftersales (CCA) and tooling purchases are changing. The new terms and conditions are part of GM’s implementation of its joint purchasing activities with PSA Peugeot Citroen and will be used for all GM purchases around the world and not only with PSA. GM will begin including the new terms and conditions in its request for quotes beginning on July 15, 2013. Only new contracts from and after July 15, 2013 will utilize these new terms. GM’s existing contracts with suppliers will not be amended to include the new terms.
The new terms contain significant changes. These changes include, but are not limited to, imposition of a greater compliance burden on seller, and expansion of buyer’s right to use a threatened or actual supply disruption as a basis for breach and injunctive relief. Below is a summary of some of the significant changes:
This article is only a summary of some of the significant changes to GM’s terms and conditions. A seller should consult with its legal team for a full understanding of all the changes. In entering into new contracts with GM, it is critical that a seller is aware of these new terms. To the extent the seller’s bargaining power permits, a seller is well advised to have a strategy to negotiate these new terms prior to entering into any new contracts with GM. Merely relying on GM’s default terms puts the seller in a disadvantaged position if and when a dispute arises.