Bridget Calhoun, a partner in Crowell & Moring LLP's Washington office practicing antitrust and consumer protection law, offers these basic strategies to help U.S. companies mitigate the risks of importing unsafe products when contracting with foreign manufacturers:
1. Conduct adequate due diligence of foreign manufacturers, such as:
- Check the manufacturer's litigation and claims history.
- Request references (preferably other U.S. customers).
- Purchase and test products manufactured for others.
- Investigate the manufacturer's finances and insurance status.
2. Structure protective terms and conditions in the purchase contract, including:
- A broad indemnification clause;
- Comprehensive representations and warranties and right to return non-confirming products;
- Comprehensive general liability insurance;
- Permission to conduct facility, product and records inspections; and
- A dispute resolution clause.
3. Perform quality control checks at multiple points in the manufacturing process, including:
- Multiple quality control checks on samples throughout the manufacturing process ;
- Periodic inspections of the manufacturer's books and records; and
- On-site facility inspections.