ISO 9001 / 9002 INTERNATIONAL STANDARD

Clause 4.3 - CONTRACT REVIEW

This is the clause that frequently causes confusion. Some people make the mistake of assuming that this clause applies to the relationship between the company and its suppliers or subcontractors, when it actually applies to the relationship between the Company and its Clients / Customers.

ISO 9000 defines a contract as :

Agreed requirements between a supplier and customer transmitted by any means

Clause 4.3.1 - General

This clause requires your Company to have written procedures covering Contract review, and for coordination of these activities.

All sales of product and services must be covered by contracts, even if only verbal (e.g. when a customer in a shop buys a newspaper, there is a verbal contract to supply a newspaper at a given price) There must be clear evidence of a review of terms and conditions. (in the case of the newspaper sale, the review is "Do I have the newspaper that the Customer wants?" by the shopkeeper, and the information "That will be xxx cost." is passed to the Customer by the shopkeeper. If the Customer hands the money over, the contract is concluded.

Clause 4.3.2 - Review

Attention should be paid to the following:

• The Company must ensure that the customer's requirements are agreed and clearly understood by all involved parties.
• the Company must check that all parties have the necessary resources, organisation and facilities.

Note : VERBAL CONTRACTS Verbal contracts must be agreed before acceptance, implying that some positive confirmation of order requirements must be made. In practice this could be achieved using fax confirmation messages or logging verbal orders and reading or otherwise confirming them back to customers over the phone.

Clause 4.3.3 - Amendment to Contract

• Any subsequent changes to the contract (whether due to a change requested by the Customer or a change requested by the Company - eg late delivery, etc) must be agreed and notified to all involved, including the Customer. This could be achieved, for example, by reviewing ongoing contracts at the daily production meetings by putting a system in place whereby Scheduling, Planning and Production would be alerted to all changes.

Clause 4.3.4 - Records

The standard simply states : Records of Contract Review shall be maintained.

For most industries, this should present no particular problems. However, returning to the newspaper shop example, (above) there are no obvious records. in practice, any good assessment Company would accept that the only valid proof of a contract review in this situation is a cash-register till-roll, and would not press for further records.