Con­tract design in sup­p­ly chains in times of cri­sis Part 2

Sin­ce the out­break of the Covid 19 pan­de­mic, the asso­cia­ted dis­rup­ti­ons in sup­p­ly rela­ti­ons have been an ongo­ing issue. As alre­a­dy repor­ted in our pre­vious news, such dis­rup­ti­ons can be coun­te­red – at least in part – with smart, forward-looking con­tract design. The text below pro­vi­des examp­les of how sup­pli­ers can pre­vent typi­cal cri­sis situa­tions in the sup­p­ly chain through con­trac­tu­al arrangements.

Con­trac­tu­al design options

Self-delivery reser­va­ti­on

One pos­si­bi­li­ty is the so-called “self-delivery reser­va­ti­on”. Such a reser­va­ti­on grants a con­trac­ting par­ty the right to with­draw from the con­tract if it is not sup­pli­ed by its sup­pli­er. In sup­p­ly rela­ti­ons, the sel­ler may uni­la­te­ral­ly with­draw from a con­tract in such a case.

In addi­ti­on to a con­trac­tu­al pro­vi­si­on, howe­ver, this pre­sup­po­ses that the con­trac­ting par­ty con­cer­ned has con­cluded a “con­gru­ent hedge” and is “left in the lurch” by its sup­pli­er, i.e., is not its­elf sup­pli­ed. It should also be noted that, in the absence of any agree­ment to the con­tra­ry, cases in which the sup­pli­er can only obtain the goods at an increased pri­ce are not encompassed.

The requi­re­ments for the admis­si­bi­li­ty of such clau­ses in gene­ral terms and con­di­ti­ons are lower in the B2B area than in the B2C area. In both cases, howe­ver, a reser­va­ti­on of self-delivery is gene­ral­ly per­mis­si­ble if cor­rect­ly for­mu­la­ted (cf. Fede­ral Supre­me Court, Ruling of 14 Novem­ber 1984 – Case VIII ZR 283/83; Hig­her Regio­nal Court of Stutt­gart, Jud­ge­ment of 16 Febru­ary 2011 – Case 3 U 136/10).

Pri­ce sca­les tied to volumes

Cus­to­mers’ con­tracts often do not pro­vi­de for long-term bin­ding volu­mes that the cus­to­mer has to purcha­se. In the­se cases, the sup­pli­er must expect that a customer’s call-ups will be lower than expec­ted or even fail to mate­ria­li­se altog­e­ther. This is often pro­ble­ma­tic becau­se the sup­pli­er has usual­ly based its pri­ce cal­cu­la­ti­on on a cer­tain purcha­se quantity.

This can be reme­di­ed, at least in part, by agre­e­ing on a pri­cing struc­tu­re that is sca­led accor­ding to the sales volu­me. The pri­ce per unit can depend on the actu­al quan­ti­ty cal­led up by the cus­to­mer within a cer­tain peri­od. As a rule, the pri­ce will then increase for each pro­duct with lower call-up volumes.

Sin­ce this is a main pri­ce agree­ment, it is not sub­ject to con­trol in the GTC and is only sub­ject to trans­pa­ren­cy con­trol in accordance with § 307, Para­graph 1, Sen­tence 2 and Para­graph 3, Sen­tence 2 of the Civil Code.

Pri­ce escala­ti­on clause

If the­re is a risk for the sup­pli­er that the pro­cu­re­ment cos­ts of any input pro­ducts will increase, the­se increased cos­ts can be “pas­sed on” to the cus­to­mer with the help of a pri­ce escala­ti­on clause.

Pri­ce escala­ti­on clau­ses are usual­ly desi­gned in such a way that the sup­pli­er is gran­ted a uni­la­te­ral right to deter­mi­ne per­for­mance in the terms of § 315 of the Civil Code. The sup­pli­er is ther­eby entit­led to fix or adjust the pri­ces sub­se­quent­ly and/or for the future.

In the B2C sec­tor, such clau­ses are only pos­si­ble under the nar­row pre­re­qui­si­tes of § 309(1) of the Civil Code. In the B2B area, they are only to be mea­su­red in terms of § 307 of the Civil Code and may not unre­ason­ab­ly dis­ad­van­ta­ge the con­trac­tu­al part­ner. In order for the­re to be no unre­asonable dis­ad­van­ta­ge, the sup­pli­er must have a legi­ti­ma­te inte­rest in pas­sing on the cost increa­ses to the cus­to­mer. Fur­ther­mo­re, the requi­re­ments and the scope of the right to deter­mi­ne per­for­mance must be suf­fi­ci­ent­ly spe­ci­fied in the pro­vi­si­on. Clau­ses that allow the user to increase the pri­ce bey­ond just pas­sing on the cost increase wit­hout any limit are not permitted.

In addi­ti­on, clau­ses may also be con­side­red which, alt­hough not estab­li­shing a right to adjust pri­ces, obli­ge the con­trac­ting par­ty to nego­tia­te new pri­ces at least in cer­tain situa­tions. This can also be an expe­di­ent mecha­nism for making mutual­ly agreeable adjus­t­ments to prices.

Pro­vi­si­ons on capa­ci­ty reservations

In long-term sup­p­ly rela­ti­ons, the sup­pli­er is often obli­ged to ensu­re per­ma­nent pro­duc­tion capa­ci­ty. This can beco­me pro­ble­ma­tic if the cus­to­mer does not sub­se­quent­ly use the­se capacities.

To avo­id such a situa­ti­on, arran­ge­ments for hol­ding cer­tain capa­ci­ties in reser­ve should be exami­ned and, at best, avo­ided. Howe­ver, it is often not pos­si­ble to dele­te the­se out­right during con­trac­tu­al nego­tia­ti­ons. In the­se cases, it makes sen­se, for exam­p­le, to agree on con­trac­tu­al com­pen­sa­ti­on for unu­sed capa­ci­ty with the customer.


The abo­ve expl­ana­ti­ons repre­sent only some of the pos­si­bi­li­ties for pre­ven­ting risks from being rea­li­sed through con­trac­tu­al pro­vi­si­ons and thus aver­ting dama­ge to one’s own com­pa­ny as far as pos­si­ble. If typi­cal sup­pli­er risks are not cover­ed in a con­tract, the sup­pli­er has no or few rights in times of cri­sis, or only rights that are dif­fi­cult to jus­ti­fy, to enforce its own claims against the cus­to­mer or to ward off (dama­ge) com­pen­sa­ti­on claims by the customer.


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