Strong Supplier Pacts, Due Diligence Can Help in Product Recalls
Signing strong supplier agreements and doing due diligence on partners can help businesses mitigate the costs associated with product recalls, according to a UK expert in manufacturing-supply chain contracts.
If a supplier’s quality problems lead to a recall, solid contracts and previous due diligence can help manufacturers recover costs, according to Pinsent Masons partner Jayne Hussey, whose advice is posted on the London-based law firm’s blog, Out-Law.com.
Among her pieces of advice, Hussey says companies should be sure their suppliers – and sub-tier suppliers – have the insurance or other financial means to cover recalls, and that contracts allow businesses to tap the responsible suppliers for compensation.
Hussey’s advice followed Aston Martin’s recent recall of more than 5,000 of its sports cars because of a faulty part that the company attributed counterfeit material used by a third-party supplier.
