1. Contract Start and End Dates
- Start Date: Confirm the exact commencement date of the contract. Ensure that it aligns with the desired timeline and internal planning.
- Is the start date clearly defined?
- Does the start date consider any preconditions (e.g., initial deliveries, approvals)?
- End Date: Confirm the contract’s expiration or completion date.
- Is the end date mentioned explicitly?
- Is there any provision for extension, and if so, how is this handled?
- Does the end date account for all deliverables, milestones, or services?
- Transition Period: Does the contract provide for a transition period upon expiration or termination to ensure a smooth handover or continuation of services?
2. Performance and Compliance Metrics
- Key Performance Indicators (KPIs): Ensure that specific, measurable KPIs are outlined.
- What metrics are being used to measure vendor performance? (e.g., quality of service, delivery timelines, customer satisfaction)
- Are the KPIs reasonable and aligned with the company’s goals?
- Is there a process for measuring and reporting on these KPIs?
- Compliance Requirements: Confirm that all compliance obligations are clearly defined.
- Are there any industry standards, regulations, or certifications that must be adhered to?
- What are the penalties for non-compliance, and how are they enforced?
- Service Level Agreements (SLAs): Are SLAs properly outlined and measurable?
- Does the contract specify response times, uptime, support hours, or other critical factors?
- How are SLA violations addressed?
3. Renewal Terms and Conditions
- Automatic Renewal Clauses: Check if the contract has an automatic renewal clause.
- How are renewals initiated (automatic, manual, or based on mutual agreement)?
- What is the notice period for either party to opt out of renewal?
- Does the renewal process require renegotiation of terms or a fixed cost increase?
- Notice of Intent to Renew/Non-Renew: Are both parties required to notify each other of their intention to renew or terminate?
- What is the time frame for sending out renewal notices?
- Does the notice allow adequate time to review and negotiate changes to the contract?
4. Vendor Performance Review
- Frequency of Reviews: Determine how often vendor performance will be reviewed.
- Is there a formal schedule for performance evaluations?
- How are the evaluations conducted (e.g., quarterly, annually)?
- Review Criteria: Ensure the contract specifies the criteria for evaluating vendor performance.
- What specific aspects will be reviewed (e.g., product quality, service reliability, customer support)?
- Is there a formal process for addressing performance issues, such as corrective action plans or penalties?
- Escalation Procedures: Identify the escalation process if performance does not meet expectations.
- What happens if performance issues are identified during reviews?
- How are conflicts or unresolved issues escalated to higher management or legal teams?
5. Contract Expiration and Renewal Deadlines
- Expiration Date Review: Make sure all expiration dates are clearly identified.
- Are deadlines for notification of expiration outlined?
- Do both parties have sufficient time to discuss extensions, renewals, or new terms before expiration?
- Grace Periods: Check if the contract allows any grace periods or contingencies.
- Is there a buffer period in case of delays in negotiation or renewal?
- Are there provisions for extension or late renegotiation?
- Post-Expiration Actions: Ensure that actions are specified after the contract ends.
- What steps need to be taken after expiration, such as returning intellectual property, ceasing services, or completing pending deliveries?
- Are there any penalties or consequences for failing to meet deadlines?
6. Budget and Cost Projections
- Total Contract Value: Review the total cost of the contract.
- Is the total price explicitly stated, and does it account for all expected fees and charges (e.g., one-time fees, recurring fees, maintenance)?
- Cost Breakdown: Ensure a detailed breakdown of costs is provided.
- Does the contract specify payment schedules, milestones, and any other fees associated with the project?
- Are there conditions under which costs could increase, and are these conditions clearly defined (e.g., inflation, exchange rates, additional services)?
- Payment Terms: Confirm that payment terms are clearly outlined.
- Are payment milestones tied to deliverables or specific dates?
- Is there a late payment penalty clause?
- Are any discounts for early payment specified?
- Budget Flexibility: Check for clauses allowing for budget adjustments.
- Can the contract’s cost structure be altered if additional work is required or if there are unforeseen circumstances?
- Are there predefined procedures for budget adjustments and approvals?
Final Review Notes:
- Ensure that all sections above are clearly and comprehensively addressed in the contract.
- Double-check for any ambiguities or vague language that could lead to disputes.
- Evaluate if the terms meet the organization’s legal, financial, and operational requirements.
- Consider legal or financial counsel for clarification or adjustments.
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