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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

A few months ago, Ford Motor Company issued new Production Purchasing Global Terms and Conditions, which govern the purchase of goods, services and tech products (including tooling and service parts) purchased&nbsp;on or after today, July 1, 2021&nbsp;(“New Terms”). This is the first substantial change in Ford’s terms since 2004.

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Do you currently have a contract with Ford? If Ford’s terms apply to your contract, section 3 of the New Terms (confusingly) sets forth which set of Ford’s terms (the 2004 Terms or the New Terms) govern your supply relationship. We’re here to help clarify. &nbsp;

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According to the New Terms, the Purchase Order includes:&nbsp;

The Production Purchasing Global Terms and Conditions (either the New Terms or the 2004 Terms).

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Any other applicable documents issued by Ford or signed by Ford and the Supplier.&nbsp;

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These documents are referred to collectively as the “General Purchase Order Documents.”

Important to note: The date that the Purchase Order went into effect (“Effective Date”) is shown on the Purchase Order.

If Ford’s terms apply to your contract, the General Purchase Order Documents in effect on the Effective Date govern.&nbsp;

For Purchase Orders that are renewed, the General Purchase Order Documents in effect on July 1 of the “Renewal Term” (defined below) will apply to the Purchase Order.&nbsp;

For Blanket Purchase Orders, the General Purchase Order Documents in effect at the time of a Release will apply.&nbsp;

Section 7 of the New Terms sets forth the duration of the Purchase Order. Here is a breakdown:&nbsp;

The “Initial Term” of the contract begins on the Effective Date on the Purchase Order and expires on June 30 of the next calendar year.

Purchase Orders will automatically renew on July 1 for an additional 12 months, ending on the next June 30, unless a notice of non-renewal has been provided. This is the “Renewal Term.”&nbsp;

The Purchase Orders will automatically renew each subsequent year for an additional Renewal Term of 12 months, unless a notice of non-renewal has been provided.&nbsp;

Still confused? Here are two examples:&nbsp;

Purchase Order Effective Date: January 1, 2021

Purchase Order Effective Date: July 1, 2021 (or any date thereafter in year 2021)

If you have any questions about which contract documents and/or terms govern your supply relationship with Ford, please contact Katelyn Crysler or your Warner Automotive Industry Group attorney.

Ahead of the Curve Auto Supplier

Automotive

Autonomous, Connected and eMobility

Associate

Katelyn D. “Katie” Crysler

Supply Chain Litigation

Contract with Ford? You’ll Want to Read This Today.

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Contract with Ford? You’ll Want to Read This Today.

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