Contracting for Human Rights: Looking to Version 2.0 of the ABA Model Contract Clauses

Abstract

This Article offers a commentary on the American Bar Association’s initiative to craft model contract clauses that U.S. buyer companies can include in their contracts with suppliers. The purpose of the model contract clauses (“MCCs”) is to deepen the protection of human rights along the supply chain. This Article briefly explains how the MCCs work and highlights two valuable contributions of the MCCs to the business and human rights space. First, the MCCs effectively take buyers’ non-binding human rights policies and put them into practice by incorporating them as contractually enforceable appendices to the supply agreements. Second, the MCCs serve to relax the legally outdated distinction between product and process regulation by treating a product’s human rights conformity as being on contractual par with a product’s technical conformity (e.g., quantity, size, design). Both of these contributions are hugely beneficial for purposes of advancing the protection of human rights within global supply chains. This Article then discusses a central shortcoming of the MCCs, which is that the clauses shift all responsibility for human rights violations onto the supplier, ignoring the reality that the buyer’s purchasing practices can be a serious contributing factor to the occurrence of violations. It concludes with some preliminary recommendations for improving the MCCs, in anticipation of a possible version 2.0 of the clauses.

Keywords: American Bar Association, ABA, Human Rights Protections for Workers in International Supply Chains, human rights, labor rights, worker rights, global supply chains, united nations guiding principles on business and human rights, consumer protection, identity harm, model contract clauses, supply agre