Company Focus on the Risk of Third-Party Misconduct — A New Strategic Consideration

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Companies may increasingly find themselves accountable both in courts of law and public opinion for third-party behavior. However, attempting to control supplier conduct is fraught with potential risks, most importantly that of enforceable third-party beneficiary rights. To minimize litigation, companies should try to avoid assuming responsibilities they are incapable or unwilling to meet and/or include language in supplier codes and contracts disclaiming the creation of third party rights.

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