Special Considerations Buying a System

Special Considerations Buying a System


The supply of a system will commonly involve the supply of both goods and services. A key element of the overall success of a transaction of this type is the initial development of a workable and acceptable specification. Hence, depending on the complexity of the system, it is often advisable for there to be an initial agreement whereby you and the system supplier agree to develop a design specification for the system. This is then followed by a second agreement to supply that system.

Design Specification Agreement:

The agreement for the initial design specification for the system may well cover the following areas:

· Responsibility for, and approval of, designs;

· the design program; price and payment;

· ownership of intellectual property rights in the design; and

· warranties for ongoing adequacy & fitness of the design for its purpose.

System Supply Agreement:

Once the specification development has been completed, the supply agreement covering the supply of the system must be finalised. This agreement may well include the following:

· The contract price and payment (including provision for stage payments);

· compliance by the supplier with the agreed specification;

· delivery and installation of the system;

· spares, maintenance and systems support;

· warranties by the supplier as to performance of the system;

· respective rights and obligations in the event of variations or delays;

· liability of the parties if the system causes damage and any indemnities that may be offered;

· site access;

· when the project may be considered to be completed and when you, as the client, may be considered to have accepted the system as meeting your requirements.

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