The healthcare debate (or lack of it) is in full swing now and one of the key objectives has been to prevent insurance companies from denying coverage based on a medical condition that existed before the insurance policy was underwritten.  

Supply Chains also have a “pre-existing condition” clause, it is called “termination for convienence”.  The bolierplate behind most Purchase Orders today contain language that basically gives the buyer the right to cancel any order if business conditions dictate.  This is the escape hatch built into most contracts allowing the buyer to change their mind. The condition which triggers this clause is usually a change in market demand and herein lies the rub: all contracts (especially Blanket Order contracts) are ultimately subject to the certainty of a forecast.

What do you think?