Chemical Experts Settle Dispute Between Water Park And Chlorine Supplier

    Contracts ExpertThis case involves a dispute over a chlorine supply contract. The plaintiff was a large indoor waterpark in the northeast that was supplied chlorine by the defendant major chemical manufacturer. It was alleged that the defendant imprudently employed a cost-plus contract. An expert in chlorine manufacturing contracts was sought to opine on the dispute.

    Question(s) For Expert Witness

    • 1. Please describe your experience in buying/selling chlorine.
    • 2. Are you familiar with cost-plus terms in the context of a chlorine supply contract?

    Expert Witness Response E-058630

    I have been involved in chlorine for many years. I worked in the chlor-alkali chemical division at a global materials supplier from 1980 until 2013. This division had a chlorine business very much like those of the major chemical companies. My primary focus was on caustic products, but chlorine and caustics are very closely tied together so I was heavily involved in chlorine sales. Cost-plus deals on chlorine are very reasonable, particularly in specific instances. For a case in which a supplier invests lots of money, it is prudent to use a cost-plus structure that guarantees a return on the investment. The idea of a cost-plus sales agreement when a company has invested considerable assets to supply another company is not at all uncommon. When I was working with the global materials supplier, we made contracts with cost-plus elements and also a component linked to the market. We also made multiple cost-plus proposals, including a recent dealing at another chemical manufacturer where we proposed to build assets for a company and charge with a cost-plus arrangement.

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