There is never a better time to perform contract reviews than the beginning of the year. Budget planning is complete, and your team should be refreshed and returned from spending time recharging their batteries after the holidays.
Here are 8 things to help you with your contract reviews:
- Review the scope of services. You want to verify there are provisions, such as the following, included:
- The products and/or services the vendor will provide
- Rights and responsibilities of both parties (your organization and the third-party vendor)
- Language around any timeframes promised or custom services requested
- Rights to modify products and/or services
- Any guidelines around adding products or services and contract re-negotiation
- Locate the performance standards and make sure they are adequate. Here you should find the service level agreement (SLA) requirements, remedies and any penalties if the SLAs are not met.
- Verify the duration of the contract is correct. Confirm that the term, renewal term, non-renewal and termination notice periods and anything else related to timeframes are accurate.
- Ensure there is a default and termination clause within the contract. Also, be sure to review for early termination fees in the event you need to terminate the agreement for convenience as these can become quite costly.
- Review security and confidentiality provisions. This should include information on how the vendor plans to safeguard your data, prevent exposure to breaches, how they will notify you of a breach and how they plan to mitigate future incidents. You also want to confirm how the vendor will return or destroy your data or assets if the relationship terminates. Are there geographical limits on where data can reside and/or be transferred?
- Look at the audit requirements. Verify there is a description of audit reports your organization is entitled to receive.
- Understand what reports will be made available to you and if there will be any fees for customizations. Reports often considered, but not limited to, are the following:
- Financial statements
- Performance reports
- PCI compliance certification
- Include dispute resolution procedures. Be sure to identify how and where disputes will be heard. Many arbitration clauses benefit the vendor, so be sure to have your expert legal team review before signing!
As always, you should have a qualified subject matter expert (financial or legal) review the contract for compliance. Once you have your analysis in hand, reach out to the vendor to discuss any terms that may be missing and next steps to negotiate them into the contract.
About Limitless Technology
Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.
Through our Billing Optimization and Vendor Management Solutions proprietary platforms we utilize technology, processes, expertise, time, and resources to improve our client’s bottom-line.
Limitless Technology manages your vendors, so you can manage and grow your business.
For Additional Information Contact us at:Phone: 407.330.4466