CONTRACT DRAFTINGF EXERCISE - MATERIAL TERMS

Confidential Facts - Buyer - Center Image

You are the Buyer for a medical office, and you were just informed that the current equipment in the Mission Viejo office is out of service and the current manufacturer needs the Med Device Model 3100 as soon as possible. You are currently paying a radiologist $4,000 per month because the model is not in place, and they have to more carefully read the images. The President would like to get the product as soon as possible.

You have $50,000 in the bank, and have heard that the price for the Model 3100 is about $70,000 - $75,000, and a friend told you they sold one for $65,000, but you don't know if that is true, and there is a little confusion about the amount they may discount to get a sale by Med Device's June fiscal year end. You are a little insecure about your job, and need to have the President see that you can negotiate well.

Next October, you need to purchase a machine similar to a new model for the Irvine facility, maybe Model 3200, for around $80-90,000, and maybe you would rather try to lock that price in.

The President thinks that it is silly that you are charged for installation and service for the first year and that it should be part of the warranty for the first year. Installation is usually taking the product out of the box, hooking up the cables and then turning on the switches. The rest is pretty much automatic. Sometimes you have to call Tech Support is there is a crisis.

As noted, you have about $50,000 in the bank. You would like to pay out no more than $30,000, but could pay all $50,000 if you got a great discounted price and a prepay discount. You can pay $5,000 per month in the future, and the President hates paying paying for interest charges.

Each day that passes without the order is costing $200 per day in radiologist costs, and the President is getting madder and madder. It needs to be here by April 30, and if not, you don't need it for the rest of the year and half of next.

The President asked you to have them guarantee that the product will work in the medical imaging, environment, and that they will take the product back and do the refund if it doesn't work. You can't find out later it doesn't work since you won't have any money to buy another product. A trade show is coming up, and Med Device would like your to be a site reference and tell others how well their products work.