This contract tip is about design changes to a product after the seller entered into a binding purchase order or contract.
Vendors change and improve their products all the time to meet changing suppliers, pricing shifts, and market demands.
Sometimes customers welcome those product changes. The customer may get the latest and greatest version, even better than the original product it agreed to purchase.
But sometimes, the customer objects. It needs the product precisely as identified in the binding order. After all, the vendor is contractually obligated to deliver that product described in the order.
There is no one right answer in these situations.
How we approach product design changes depends on the parties, the products, the planned use, and the design process. Both the vendor and customer must think through what autonomy and options they want if changes happen.
Here are three things to consider:
1. Describing product changes that might be ok - One common approach is to provide that the vendor can change the product as long as the new design has "the same form, fit, and function" as the one in the order. This may work if you are reselling or using it as is, but not if you've designed your product or manufacturing for the dimensions or specifications for the product you ordered. In these cases, the customer may need to insist on more limitations on changes so that the new product fits in the overall design or layout.
2. Describing approval processes - Another approach is to identify specific changes that are ok to make and others that aren't. For example, the customer could preapprove changes to the appearance, but not to the dimensions or specifications.
3. Identifying customer remedies - You'll also want to think about the remedies the customer should have. Most vendors won't hold off a product redesign for a single customer. So the customer needs to consider if it needs rights should the product change. Customers may want the right to cancel the order or require the vendor to supply a last buy for the customer using the design specified in the order.
How do you approach changes to the product's design when there is already a binding purchase order or contract?
