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FALL 2013

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  • Fastener
  • Fasteners
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Distributor's Link Magazine Fall Issue 2013 / VOL 36 / NO.4

60 THE DISTRIBUTOR’S

60 THE DISTRIBUTOR’S LINK Jim Truesdell James Truesdell is president of Brauer Supply Company, a distributor of specialty fasteners, insulation, air filtration, and air conditioning with headquarters in St. Louis. Mr. Truesdell is adjunct professor at Saint Louis University and Webster University. An attorney and frequently published writer, he is the author of “Total Quality Management: Reports From the Front Lines”. WATCH OUT - STANDARD FORMS ARE GETTING MORE ONE-SIDED! Better start reading that fine print! For well over a generation the standard form contracts we are signing as a matter of course have been getting longer and more complex. Consumers have become accustomed to “clicking” that they agree with the terms of sale so that they can proceed on to information they are seeking on the web. Business people short on time are relying on the verbal assurances of a sales rep that everything in the small print of the standard form is fair and OK so that they can enter into a purchase of goods or services and then get on with their daily tasks. The problem is, however, that in our fear of litigation or our desire to cover our rears we are ceding more and more of our business decisions to a distant group of attorneys who are establishing the terms of dealing between us and our customers. In particular I have recently seen companies present commercial and industrial purchasers with contracts that bind not only the company but the individual signing the contract to its terms. While a clearly marked “personal guarantee” might be proper and justified if one is dealing with an owner/ manager or proprietor of a small “mom and pop” corporation, where is the logic or fairness in asking an EMPLOYEE of a company to bind himself or herself personally and individually to the obligations Unless this is noticed and objected to by the signer, that individual might some day find himself or herself on the hook personally for large corporate contracts where the employer company goes bankrupt or out of existence. If this practice continues to spread and buyers don’t take notice and refuse to sign such agreements it could well have a chilling effect on our system of commerce as corporate employees wise up and start balking at signing these agreements. I have run into these “individual” obligation arrangements in the fine print recently in such agreements as telephone directory advertising, garbage service, and purchase of office equipment. Sometimes my refusal to sign has been met with the sales reps’ statement that they do not have the authority to deviate from the standard terms, or their assertion that “that will never happen”. Many fastener (and other commodity line) distributors are large enough that much of our contract signing is done by employees rather than owners. These employees may well, and rightfully, object to putting their personal credit on the line. Another provision being included more frequently is “automatic renewals” of services that take effect unless the customer gives written notice of cancellation well in advance. Sometimes these even allow for rate increases unless the specific notice in advance is given. A commercial customer needs to proceed even more carefully than a retail consumer in these instances because a court is less likely to find a business purchaser to be an unsophisticated target of these one-sided contracts and thus find reason to strike down harsh and unconscionable language or provisions in the contract language. On the idea that our economy and capitalist system is based on freedom of contract and the idea of mutual commitment and assent, even a consumer has a duty to reads the terms under which he or she will be bound. A small business buyer may well be expected to have the skills or the legal resources (as well as the bargaining power) to stand their ground in the face of standard forms. please turn to page 223

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