To check whether supplier actually complies with the labour standards set out in the contract, the purchaser should have...?

A 'right of audit' is a specific contractual clause that grants the purchaser the authority to inspect and verify a supplier's compliance with agreed-upon terms. To check adherence to labour standards, a purchaser would need this right to access the supplier's facilities, records, and interview employees. This proactive measure allows for direct verification of practices against the contractual requirements. The other options are reactive remedies that are exercised after non-compliance has already been established, whereas an audit is the mechanism used to establish the facts of compliance or non-compliance.

A. Right to penalise the supplier: This is a remedy for a proven breach of contract, not a method to investigate or check for compliance.
B. Right to terminate the contract: This is a severe remedy for a material breach and is used after non-compliance is confirmed, not as a tool for checking.
D. Right to rescind the contract: Rescission voids the contract from its beginning, typically for reasons like misrepresentation, and is not a tool for ongoing compliance monitoring. ---

1. CIPS. (2019). Commercial Contracting L4M3 Study Guide. Profex Publishing. In the chapter on 'Managing Contractual Performance

' the guide explains that audits are a key tool for monitoring and verifying supplier compliance with contractual obligations

including ethical and social standards like labour laws. (Specific reference: Chapter 6

Section 2: 'Monitoring Performance').

2. Lysons

K.

& Farrington

B. (2020). Procurement and Supply Chain Management (10th ed.). Pearson. Chapter 18 discusses supplier performance management

highlighting that supplier audits are a primary method for buyers to "verify that the supplier is conforming to agreed standards

" which explicitly includes social responsibility and labour standards. (Specific reference: Chapter 18

pp. 485-487

'Supplier Audits').

3. Monczka

R. M.

Handfield

R. B.

Giunipero

L. C.

& Patterson

J. L. (2016). Purchasing and Supply Chain Management (6th ed.). Cengage Learning. The text details the use of supplier audits and site visits as essential components of contract management to ensure compliance with quality

process

and ethical standards

including labour practices. (Specific reference: Chapter 14

'Supplier Performance Management

' Section on 'Supplier Measurement Decisions').