Company, having undertaken the effort of putting a master
purchase agreement in place with a detailed specification and
statement of work, was quite pleased with itself, having
established this relationship with a key supplier. Purchase orders
were issued, received by the supplier, and processed. All was good
... until it wasn't.
The supplier contacted Company and advised that due to
"extenuating circumstances," it would no longer be
accepting purchase orders, forcing Company into a costly,
stress laden scramble to replace supply for its in-process
product.
This issue comes up with suppliers of goods and services due to
a variety of "extenuating circumstances" including
increased costs from its suppliers, sale of its supply to a
competitor or for a higher price, and allocation of the resource to
another project or customer. Purchasers of goods and services
should always consider the advisability of a supplier having the
contractual right to reject a purchase order
