How we rewrote a contract with Turkey and saved $15,000–20,000 a year
A light-industry company signed a $120,000 contract for the supply of textiles from Turkey on DDP Incoterms. The seller priced in risks it did not control, and on the first delivery the cargo was held for 9 days due to delays at Ukrainian customs. The supplier refused to compensate for the downtime, citing force majeure.
We audited the contract and found an unfavourable allocation of risks and no procedure for acceptance of the goods. We drafted a new agreement with penalties for delay (0.1% per day), a clear CIP Incoterm and an escrow account for the first deal with a new supplier.
The next 4 deliveries went through without delays. The client protected itself against the risk of losing $15,000–20,000 a year. The contract became the template for all of the company's Turkish suppliers.
"We thought DDP was convenient for us. It turned out to be convenient only for the supplier. BROER rewrote the deal so that now we sleep soundly."— CFO of the company
