The following article was prepared by Mike Taylor, C.P.M., for distribution to ISM affiliate newsletters.


Notice This!

What the heck are you trying to say, anyhow?  If it’s a contractual notice, there should not be any question. 

Recently I had the occasion to become involved with a problem one buyer was having with a purchase order.  The buyer was out of the office on vacation, but had issued a letter to the vendor.  It went something like this:

It was good to talk to you on Tuesday. Please provide the proposed replacement model number as soon as possible. Thank you for your cooperation.

Unfortunately for the buyer, the rest of us were unable to help with the issue, because the guidance to the vendor was so vague. In fact we spent several hours just trying to clarify the facts and determine what action was needed. As a contractual notice, the original letter left the situation vague, and would be nearly useless should the problem become a legal action.

Accordingly, rather than take the chance that a contract situation will improve, it is better to write every notice to a vendor as though your career and company depended on it.

Here are some suggestions for improving that example notice:

  1. As you were notified by telephone conversation between X and Y on 11/15/07…..

  2. Original shipment,  delivered on 11/14/07 …  failed to meet specification section 1.2.3,  in that it was lacking ….

  3. According to contract terms A,B,C, failure to meet the specification constitutes a time-sensitive situation and requires corrective action be taken within 24 hours of the first verbal notification.

  4. Expect your response by 2:00 p.m. 11/16/07…….|

  5. Expect corrective action report to preclude future failures of a similar nature within 20 days per contract provision 23..

  6. Failure to take immediate action as required by the contract and restated above may result in an immediate breach-of-contract determination wherein Buyer may exercise its right to cover at contractor’s expense without further notice. (per contract provision 26)

  7. A copy of this notice has been forwarded company president ZZTop  as identified in your last company profile.

These suggestions improve the original notice in several important ways:

  1. By providing a clear summary of the situation for anyone who get involved later

  2. By restating the facts. Better to find out now if a fact is wrong – also harder for the other party to later dispute a fact that has been restated several times.

  3. By clearly identifying the required actions and due dates.

  4. By notifying the contractor about future actions the buyer might take without making a specific threat.

  5. By making the vendor’s management chain aware of the problem.

While my suggested changes may sound harsh; they are not really. A restatement of facts is not criticism nor judgment; neither of which belong in a notice such as this.  Also, restating the facts is not being redundant, it’s documenting the situation for the benefit of future readers and to preclude a subsequent dispute of the facts.

Here is another way to look at it.

Are you just describing an interesting situation? Or are you putting the contractor on notice for a contractual problem? 

If there is a problem; be sure the letter identifies who owns the problem. Form a long-term-relationship perspective we may intend to help resolve it. However, at the same time, we need to leave ourselves the option of strictly enforcing the contract.

If it's an action item then show who is responsible for the action. Also, define the deliverables, delivery location/method and due date.

Consider the difference:

    " We found a problem with the workmanship on the HVAC housing." 

or

    "The HVAC housing delivered on 12/25/07 failed to meet contract requirements and specifically specification section 2.2.1. The delivered housing includes unallowable defects as can bee seen in the attached image file, and is rejected. We expect immediate action to remedy the situation and deliver a conforming HVAC housing. Provide your proposed resolution to me within 3 days."

Bottom line.  If it your job to compose contractual notices, then make them complete, salient and unambiguous.

Here are some more suggestions:

  1. Make the opening argument a slam dunk. If there is a weakness in the position, it’s much better to find out now than later in court. If the problem is a violation of the contract, say so.  Due to contractor’s failure to comply with…or failure to provide.

  2. Use every opportunity to restate the facts. Thus the facts, as we understand them, are obvious to all readers. Also errors or omissions get discussed before they become a liability in court.

  3. Do not speculate, guess, assume or judge.

  4. Be comprehensive, but don’t add words you don’t need. I joke with my lawyer friends about using too many words and run-on sentences. We have an uneasy truce on that point.

  5. Resist the feeling that letters need to be ‘softened’.  Facts are facts.  Offer options or face-saving resolutions if they are appropriate, but do so without touchy-feely baggage which could be misinterpreted. “ I hope we can find a happy way to resolve this unfortunate situation so it doesn’t impact you too much. NOT!!!

  6. Resist the temptation to assume everyone will “know the situation”.  Use correspondence as the opportunity to notify everyone who needs to know –including people within your own company.

  7. Describe alternatives, if appropriate to set the stage for future actions, so they will not be a surprise. However, do NOT commit to a specific course of action until it is time to do so.   Cancellation is one option we may elect to pursue.

  8. If a legal notice is required, make sure to include it instead of waiting and loosing valuable time.  This letter constitutes the 10-day notice requirement per contract provision 23 after which we may elect to….. Also, once you start the clock ticking absolutely don’t forget to follow up or risk loosing your right.  Buyer has extended the extended the response period by 10 days until January 25, for this specific situation only without abrogating our right to strictly enforce the 10-day notice period for any future problem. 

  9. Reiterate the required actions and due dates.

  10. Confirm the responsible parties and correct contact information.

  11. Here is a sample checklist to use:

 

Notice is addressed to the contractor person responsible for taking action.

 

Additional copies are addressed to the contractor’s chain of command, if needed

 

Copies (or summaries ) are addressed to all internal people who need to know

 

The subject line references the contract as well as the specific subject of the notice

 

Reference is made to pertinent information

 

Prior discussions or notices about this same subject are unambiguously specified

 

Purpose of the notice is clear in the first few sentences

 

Relevant facts are clearly stated

 

Deficiencies and failures are specified and described

 

Wishy-washy, just-wasting-space sentences are removed

 

Notice directs specific actions

 

Actions identify the responsible party and due dates

 

Required response/acknowledgement to the notice is described along with a due date

 

Weak words have been replaced with language that commands attention.

 

The cognizant person for questions about the notice and required response is identified along with a preferred contact methodology (phone, fax, email, etc.)

 

Trashy and mushy language is removed.

 

References and attachments are unambiguously identified, by letter number, date, title, revision, etc.

 

Notice was prepared, delivered and filed in a way that preserves legal rights and records

 

 

 

 

 

 

A few comments about style

  1. I wrote the suggestions above in bullet format to make them easier to read and I suggest the same format in contractual notices. Bullets can be easier to read and are a more effective way to make the points in a contractual notice. Write so the letter can be read;  regardless of the rules we learned in high school about paragraph structure and prose.
  2. Number bullets if there are more than about two of them. It is much more accurate to refer to “item number 12” in conversations and future correspondence.
  3. Can a contractual notice be made via email?  In my opinion and with some care – yes.  Keep in mind that you will need to verify receipt and confirm the identify of the sender and recipient. NOTE: Some lawyers will disagree, so get guidance from your counsel. Also here is the requisite disclaimer about my not giving you legal advice, just providing my humble opinion.
  4. Keep a legally binding record of the notice; free from mark-ups, coffee stains and questionable authenticity. Here is where sending copies to multiple people helps.

While I am thinking about it; How do you keep contract records? Might be an appropriate topic for a future article.

I hope this helps.

Mike

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