Businesses need to consider a range of issues when entering long-term contracts for supply of services. Nath Solicitors in London has a team of experienced commercial contract solicitors with an in-depth knowledge of the contract terms required to secure our clients’ best interests.

We will partner with you, learning about your business and adapting and updating your supply of service agreements as you expand.

What are the key terms in a supply of services contract?

  • Among the issues for consideration in a supply of services contract are:
  • price – reaching agreement on price is a delicate balancing exercise between the interests of the supplier who may want to recoup costs involved in the start-up of the business and the interests of the customer who will want to minimise the price as much as possible and increase the level of discounts and rebates available, especially if they are ordering large quantities. Other points to consider in relation to price would be:
    • inflation
    • third party costs
    • employment and transport costs
    • customer-required changes to the product
    • development and improvement costs
  • the term of the contract and how and when it can be terminated
  • performance levels—the customer will usually want to set performance levels for the supplier using key performance indicators (KPIs) and include mechanisms to measure the KPIs. The supplier will want to set the KPIs at reasonable levels, minimise the remedies available to the customer while maximising the potential incentivisation and deal with the effect of a force majeure event on the KPIs. Other points to consider on performance are:
    • remedy any failure by the supplier to reach and maintain the KPIs, and
    • incentivise the supplier
  • whether the goods or services are to be improved or developed
  • exclusivity of the contract
  • a method for resolving disputes

 

We will work through each of these points with you, helping you develop a supply of services contract that meets your needs and protects your best interests.

To discuss how we can assist you with supply of services contracts, call our London office on 0203 670 5540 or contact us online.