Legal contracting in supply chain is used when an organization's needs exceed their capacity and they need to outsource a certain task. For example, a company may have a complex demand forecast system that has traditionally been completed by an expert on staff, but due to lack of resources or time, they instead subcontract this work to a specialist. This is a form of legal contracting in supply chain because it involves the exchange of goods, services, or money at an agreed-upon price and within a certain time frame. Legal contracts are used throughout the four major areas of supply chain: supplier relationship management, customer relationship management, transportation and logistics management, and procurement and operations management.
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