Understanding Clauses

Clauses describe any special conditions or provisions that relate to the fulfillment of a contract. Some clauses specify the terms under which a product is not acceptable. For example, your company might abide by a quality clause which states that a product must meet certain federal and state requirements. If your company fails to meet the quality requirements, the customer has the right to return the product and receive full credit. Other clauses might relate to the timeliness in which you receive a product. For example, your company might have a penalty clause whereby the contracting entity incurs a penalty of a certain amount for failing to deliver the product by the agreed upon delivery date.

Each clause must have a unique name. You set up the name and enter the text for the clause using the Print Message program (P40162). Then when you enter a contract, you assign the contract clause or, if applicable, multiple contract clauses to the contract.