Standard Terms and Conditions for the Supply of Services – Top 5 points for suppliers to consider

1. Clear scope

Unless you provide a single, fixed service to all customers, you should be thinking about your scope of services every time you enter into a new contract. The clearer the scope, the less risk of spiralling costs and unhappy customers who complain you haven’t delivered the service they were expecting.

2.Customer dependencies

Think about what you need your customers to do in order for you to be able to provide your services effectively and efficiently. For example, do they need to attend meetings? Provide information? Review draft deliverables? Obtain certain licences or authorisations?

3. Limits of liability

I regularly come across supplier standard T&Cs that have no financial liability cap whatsoever. This is the sort of error that sends suppliers out of business. Even if your T&Cs have a financial cap, make sure that you’re not offering a higher cap than you intended. For example, caps are often linked to overall customer spend, which can start to rack up with repeat business.

4. Termination for convenience

Check what termination rights you have given yourself as a supplier. Termination for convenience is often missing altogether or not properly thought through. Think about this in the context of the service you’re providing (for example, short term project or ongoing services?). Also consider how termination should affect customer payment obligations and whether you’re willing to give your customers an equivalent right to terminate without cause.

5. Force majeure

If the past 2 years have taught us anything, it’s that force majeure events do happen, often with disastrous consequences for a supplier’s business. The first step is to check you have an FM clause in your T&Cs. An equally important second step is to check that the clause provides effective protection for events outside of your control. This means thinking about the types of events that could arise, as well as the triggers for relief.