As a result, the terms and conditions of a betaCo standalone po order may need to be significantly shortened and made less unilateral in order to reduce BetaCo and Acme`s transaction costs. I can understand that the same terms and conditions apply to purchases under a master`s contract and to purchases under separate orders: your concerns as buyers are the same in both contexts. As you know, goods or services can be purchased by orders placed under a master contract or by orders that are not placed under a master`s contract – I refer to these as a P.A., as nails. They can be issued for one-time purchases or regularly as part of an ongoing relationship. A sub-agreement always has a higher agreement directly in the hierarchy, but may itself be an element superior to one or more sub-agreements in the hierarchy. If you have a master`s contract, the terms and conditions – that is, anything that does not relate to specific business such as product and price – are included in the contract; orders placed under the contract contain only the terms of the contract. In addition, the terms and conditions are negotiated in a basic contract. On the other hand, if you buy something with a stand-alone order, the terms and conditions are included in the order and these terms and conditions are defined unilaterally by the buyer and are not negotiated. Of course, BetaCo`s transaction costs could be significantly reduced in the next transaction by Acme.
This assumes, however, that the same BetaCo staff make the second order as the first. And more than that, when handling the first order, it would be risky for BetaCo to assume that it would be able to make its transaction costs profitable during future purchases: for all that it knows, Acme`s first order could be the last. It follows that if a set of general terms in a standalone OP leads BetaCo to generate disproportionate transaction costs, the conclusion of the agreement would also result in additional transaction costs for Acme, as it is in talks with BetaCo. BetaCo`s transaction costs may be lower than Alphaco`s: in the event of a single transaction, the stakes would not be so high that BetaCo might be quite willing to accept certain general terms of sale without haggling. However, it would not be reasonable to expect Betaco`s transaction costs to be 1% of Alphaco`s transaction cost – the time it would take to read and understand the terms and conditions would be the same for both transactions.