5 tips for reviewing your client contracts and agreements
Find your business
Contracts are one of the key elements of any successful business whether for clients or on the supplier-side. Here we take a look at client-side contracts and how businesses can review them.
Why you should look at these contracts now
Most businesses tend to get busier and take on new deals or projects in the run-up to Christmas. It makes more sense to conduct a review now before these bigger projects kick off and consume greater resource. There is unlikely to be time for ‘tidying up’ within the next six months at least, and you never know when you might need contracts and paperwork to be in order. And with the quick growth often experienced with SMEs, it can be easy to forget to keep everything in order, when you don’t necessarily have specific departments responsible for such matters.
5 client contract reviewing tips
In general, you should consider what has changed since the last time you looked at the contract, but to guide you here are 5 top tips of what to think about and look out for:
And for contracts in general, don’t forget…
- Is the key contact information still accurate?
- Has anything significantly changed in law that needs to be addressed? For example, is GDPR covered for any disclosure of personal information?
- Remember your clients and suppliers may be carrying out the same process, so it’s important that you look honestly and objectively at your own performance as well as theirs.
- Make sure you schedule the next review date. Make sure you schedule well in advance of any auto-renewal dates to ensure you can review the contract in advance. The appropriate frequency of reviews will depend on the nature of the contract, but should be at least annually.
For maximum peace of mind, professional business legal advice is essential for creating and revisiting these contracts. And remember that at LawBite, we are here to help. Our LawBriefs are skilled in helping you to identify risks and opportunities and reviewing, negotiating and drafting contract terms.
LawBite are here to answer your questions and offer a FREE 15-minute consultation. You can also call their helpful client services team on 020 7148 1066
Are there any break clauses or rights of termination that could be used? Is there an auto-renewal clause? Consider if you need to take any action to ensure the continuation of the client contract or if you want out of the client relationship to prevent auto-renewal or terminate the contract. If there are supplier contracts that are dependent on this client contract, then you need to look at them in parallel with the client contract to ensure you are not exposed. You need to either make sure the supplier contract continues and is adequate and appropriate to meet the needs of the client contract or that you take steps to end the supplier contract in parallel with the client contract.
Are any required qualifications, permissions or accreditations to enable you to deliver the services or products still up to date?
Is the contract still financially viable when you look at risks/costs versus financial reward? Are you having any payment issues with the client? Is the client meeting their obligations to you or has it become a difficult relationship and one you could do without? Are there any financial review clauses? Do you have rights to increase the fees or costs and are you making the most of these? Are you able to charge interest for non-payment?
Do you have the capacity and the infrastructure in place to continue to deliver the services or products and meet the delivery timescales and other obligations in the contract? You may want to consider looking at the market to see what your competitors are offering. Have you had any issues with performance and are you at risk of a claim for poor or non-performance? Make sure your insurance is up to date and adequate and that you put in place any appropriate practical steps to mitigate the risk.
Is the description of services or products still accurate or has there been some “scope creep” that might leave you exposed from a financial or liability point of view? Consider whether you need to amend the contract to accommodate the changes.
Whatever the reason for a change in your client contracts, it's always good to know exactly where you, and your clients stands and exactly what is expected from everyone.
Find your business
A milestone passed | Bank Referral Scheme Post Implementation Review
Alternative Business Funding Chairman, Adam Tavener's thoughts on HM Treasury's Bank refer...LEARN MORE
Considering taking the plunge and starting a business?
Has Coronavirus made you think about becoming a business owner? ABF Chairman, Adam Tavener...LEARN MORE
Countering currency volatility during the coronavirus
The acceleration of the coronavirus crisis in March led to some dramatic currency movement...LEARN MORE