| Course | MT436 Purchasing and Supply Chain Management |
|---|---|
| Unit | Unit 8 |
| Paper type | Contract clause review |
| Length | About 880 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT436 Unit 8
Copper Both Ways, Warranty to Match, Exit for Either Side: An MT436 Unit 8 Contract Clause Review
[Student Name]
Purdue University Global
MT436: Purchasing and Supply Chain Management
Unit 8 Contract Clause Review
[Instructor Name]
[Date]
Marsh Run Utility Vehicles, the harness supplier's draft and every figure are composite; the proposed language is illustrative coursework, not legal advice, and the sources cited are real.
Order of Precedence
Before any clause can be relied on, the agreement must say which document wins when two conflict. The draft is silent, and the supplier's order acknowledgments carry their own printed terms. Under the rule on additional terms in acceptance, a seller's acknowledgment can add terms to a contract between merchants unless the buyer's offer limits acceptance to its own terms or the new terms materially alter the deal (Additional terms in acceptance or confirmation, 2022). The review therefore proposes, as the first clause, that the master agreement governs over any statement of work, purchase order or acknowledgment, and that printed terms on the supplier's forms have no effect.
Price: The Copper Clause
The draft clause lets the supplier raise harness prices each month if the COMEX copper price rises above $4.10 a pound, with no provision for decreases.
The failure scenario is a copper spike followed by a fall. The main dash harness contains about 6.2 pounds of copper and is priced at $286. If copper rose to $4.80, the draft would raise the harness by $4.34, about 1.52 percent, about $12,586 a year across 2,900 harnesses. If copper then fell to $3.60, the price would stay at the higher level, because the clause moves only up.
The proposed clause adjusts both ways, quarterly, using the average COMEX price for the prior quarter, and only when that average moves more than 5 percent from the $4.10 base, that is, outside $3.90 to $4.31. The adjustment applies only to the stated copper weight in each harness, at the change from the base price. At $4.80, the harness rises $4.34; at $3.60, it falls $3.10. A quarterly band avoids monthly price churn for small moves, while the two-way rule shares the risk fairly.
Warranty
The draft warrants harnesses against defects for twelve months from shipment and limits the remedy to replacing the defective harness.
The failure scenario is a connector defect found after a year. Marsh Run warrants the vehicle's electrical system for three years. Suppose a batch of connectors corrodes after eighteen months and Marsh Run must run a field campaign on 1,100 vehicles. The draft would leave Marsh Run paying all of it: about $260 of dealer labor per vehicle to inspect and replace the connector, about $286,000, plus the replacement parts, since the supplier's warranty would already have expired.
The proposed clause warrants harnesses for 36 months from the vehicle's retail sale or 42 months from shipment, whichever comes first, matching the vehicle's coverage. For defects traced to the supplier, it covers replacement parts and the dealer labor at Marsh Run's published warranty rates, including field campaigns, with the supplier's total liability for a campaign capped at the value of one year of purchases.
A twelve-month warranty on a part inside a three-year vehicle warranty leaves the builder holding two years of risk it did not price.
Termination
The draft lets the supplier end the agreement for any reason on 90 days' notice, while Marsh Run may end it only for the supplier's material breach.
The failure scenario is a supplier exit during the spring peak. Ninety days is shorter than the time needed to qualify a new harness supplier, which the Unit 5 RFP timeline puts at about eighteen weeks including first articles. A supplier exit would leave Marsh Run without harnesses for weeks.
The proposed clause makes termination for convenience mutual, on 180 days' notice for either party, and adds three protections: a last-time buy right for Marsh Run of up to six months' volume at current prices; the return of all Marsh Run-owned tooling and test boards within 30 days of notice; and cooperation in transferring drawings and test programs to a new supplier.
Why These Three Clauses
Price, warranty and termination are the clauses where the draft shifts the most risk to Marsh Run. Bajari and Tadelis (2001) showed that contract terms should reflect who can best control and bear each risk; the supplier controls connector quality, so it should bear the warranty risk for its parts, while copper prices are outside both parties' control, so the risk should be shared both ways. Monczka et al. (2021) recommend that buyers test each key clause against what happens when things go wrong, which is the method this review uses.
How the Supplier Is Likely to Respond
The supplier will probably accept the two-way copper clause, since it protects it against rises as the draft did. It will resist the warranty change hardest, because it shifts real cost. The review therefore proposes the liability cap at one year of purchases as the concession that makes the longer warranty acceptable.
Remaining Clauses
The review found the delivery, confidentiality and insurance clauses acceptable as drafted, and recommends only that the delivery clause adopt the late-delivery credit used in the frame award in Unit 3.
References
Additional terms in acceptance or confirmation, U.C.C. ยง 2-207 (2022).
Bajari, P., & Tadelis, S. (2001). Incentives versus transaction costs: A theory of procurement contracts. RAND Journal of Economics, 32(3), 387-407. https://doi.org/10.2307/2696361
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2021). Purchasing and supply chain management (7th ed.). Cengage Learning.
The Purdue Global MT436 Unit 8 instructions
Unit 8 asks students to review key clauses in a supply contract and propose better language. Instructors expect each clause tested against what happens when something goes wrong, not summarized. A three-column layout, original clause, issue and proposed language, is common. Price adjustment clauses should be modeled with the case's figures in both directions. Warranty terms should be compared with the buyer's own obligations to its customers, and the cost of a mismatch estimated. Termination rights should be tested against the time needed to replace the supplier. Which document governs when terms conflict should be settled first. Proposed language should be specific enough to use, and the review should explain how the other side is likely to respond.
Inside the MT436 Unit 8 example
The sample begins with order of precedence, citing the rule on additional terms in a seller's acknowledgment. The copper clause is modeled at a high and a low copper price, showing that the draft moves only up, and redrafted to a two-way quarterly adjustment with a band. The warranty clause is tested against an eighteen-month connector failure and its campaign cost, under a highlighted line on the gap between the part and vehicle warranties, and redrafted with a liability cap. The termination clause is tested against the time to qualify a new supplier and redrafted to mutual notice with last-time buys. A section explains the risk allocation with Bajari and Tadelis and Monczka and colleagues, and another predicts the supplier's response.
Reading the MT436 Unit 8 grading rubric
Testing each clause against a failure scenario, rather than summarizing it, is the first thing a clause review is judged on. Rubrics reward modeling price clauses with real figures in both directions. Credit goes to setting the part's warranty against the buyer's own customer warranty and costing the gap. Termination rights tested against replacement lead time show practical judgment. Settling order of precedence first shows awareness of how printed form terms can override negotiated ones. Proposed language specific enough to drop into the contract earns marks. Explaining who should bear each risk, and anticipating the supplier's response, shows depth. A three-column layout grouped by topic supports the review.
Common MT436 Unit 8 mistakes, and how to avoid them
The most common weak clause review restates each clause in plain English and calls it unfavorable without showing why. Another frequent error proposes language such as fair adjustment or reasonable warranty, which settles nothing. Students often model a price clause only when prices rise, missing that a one-way clause is the problem. Warranty terms are rarely compared with the buyer's own commitments. Termination notice periods are accepted without asking how long a replacement takes. Before submitting, write one concrete failure for each clause you reviewed and walk it through both the draft and your proposed language. If your language does not change the outcome, it needs another draft.
Get an MT436 Unit 8 example written to your instructions
Paste the contract clauses or case excerpt your Unit 8 review covers, what the buyer is purchasing and its own obligations to customers, plus the rubric. A first review is written free within 24-48h, each clause tested against what goes wrong, with redrafted language and the dollar exposure worked out. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More MT436 papers and BS in Business Administration samples
- MT436 Unit 1: Purchasing and Profit Board Post
- MT436 Unit 2: Spend Analysis
- MT436 Unit 3: Total Cost of Ownership Model
- MT436 Unit 4: Supplier Selection Matrix
- MT436 Unit 5: Request for Proposal
- MT436 Unit 6: Negotiation Rehearsal Reflection
- MT436 Unit 7: Negotiation Plan
- MT436 Unit 9: Supplier Scorecard
- MT436 Unit 10: Category Sourcing Strategy
- MT435 Unit 8: Control Chart Analysis
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MT436 Unit 8 questions, answered
What makes a price adjustment clause fair to the buyer?
Symmetry, a stated index and a band. The clause should move prices down as readily as up, tie changes to a published index such as a copper price, and ignore small movements so prices are not reset constantly. The example's redraft adjusts quarterly in both directions, and only when copper moves more than five percent from a stated base.
Why compare the supplier's warranty with the buyer's own?
Because the buyer usually promises its customers more than a component supplier promises the buyer, and the difference is cost the buyer carries alone. The example's builder covers electrical systems for three years while the draft harness warranty ends at twelve months, so the redraft aligns the two periods from the date of retail sale.
Does a clause review need to cite the Uniform Commercial Code?
Where goods are sold between merchants in the United States, Article 2 usually governs, so citing it accurately adds weight. The example refers to the sections on conflicting forms and on limiting remedies, because both change how its clauses operate. It avoids presenting the review as legal advice and recommends that counsel confirm the final language.
Where can I find a free MT436 Unit 8 sample paper?
The full MT436 Unit 8 review is here, redrafting copper pricing, warranty and termination clauses in a harness supply agreement.
How much would the draft warranty leave with the builder in the MT436 Unit 8 sample?
About $286,000 of dealer labor in a 1,100-vehicle campaign, because the twelve-month warranty ends long before the vehicle's three-year coverage.