Bill of Material
(BOM) A detailed list of all the materials and components needed to produce a product (21 Point Checklist)
Custodial Care
(Unknown) in procurement and logistics refers to the carrier’s limited responsibility for safeguarding goods during transport.
Force Majeure
An act of God. A contract provision that releases a parties obligation to perform for reasons outside of their control (flood, hurricane, acts of war, etc.)
Indemnification
Protection afforded to the Buyer from Seller’s infringement
Infringement
The illegal usage of an entities Intellectual Property (Software: “copyleft”)
Intellectual Property
An entities ownership of information including designs, trademarks, patents, copyrights and software
Liquidated Damages
/ As known as “Remedies”: Compensation for not fulfilling an obligation
Notification
The formal process an entity must follow when requesting contract termination, announcing a product’s end of life, change in product design or similar provisions captured in the Agreement
Revenue Recognition
is an accounting principle that determines when a business records revenue as earned, rather than when payment is received. It’s a key part of accrual accounting and is required by the Financial Accounting Standards Board (FASB) in the US
Right to Use
/(pertaining to software licensing): Owners of software provide an RTU to a seller
Risk of Loss
The point in a transaction where the responsibility for damage or loss of goods transfers from the seller to the buyer.
• Under FOB Origin, the buyer assumes the risk once goods leave the seller’s dock.
• Under FOB Destination, the seller retains the risk until goods arrive at the buyer’s location.
• Importance: Determines who bears the financial liability if goods are damaged or lost in transit.
Shrinkage
The loss of inventory that occurs between the point of manufacture or receipt and the point of sale or deliver
• Causes include theft, damage, administrative errors, or misplacement.
Termination for Cause
Termination of a contract for non-compliance including breach or non-performance. Follows a formal Notification process – never pretty!!!
Three Way Match
(M1,29)
Title
Legal ownership of goods — the right to possess, use, and transfer them.
• Title typically transfers from seller to buyer when the parties intend it to, often defined by shipping terms or contractual agreement.
• Under UCC rules, title and risk of loss may transfer at different times, depending on contract structure.
Warranty
Obligations of the buyer in the contract. Warranty can have numerous meanings including product performance, wherewithal of the contracting firm, their right to execute the Agreement, etc…
