Here at RiskBox, we aren’t lawyers, so we can’t help to formally review our clients’ contracts. What we can do is share our thoughts on some of the key clauses within the contracts, so you have a clearer idea of what you’re signing up for.
That’s why we’ve put together a list of the 10 most commonly seen terms relating to insurance in commercial technology contracts, and provided guidance on why they’re important. You’ll find the first five explained below.
Contracts should typically include clear agreement as to when deliverables are approved and signed off as complete. This is vital in avoiding confusion about when performance obligations have been met.
The clause should also detail acceptance criteria, and clarify how any problems encountered during acceptance testing are to be handled.
Often, delivering a contract is a joint effort between the contracting party and a range of specialist contractors and freelancers. To cater to these situations, contracts can include clauses specifically aimed at outsourced service providers.
On the one hand they can be there to limit your liability, such as if a supplier fails to deliver as promised, causing a delivery delay to your end customer. On the other hand, they can be there to specify insurance obligations relating to the outsourced providers themselves, such as having a certain level of Professional Indemnity protection.
When agreements incorporate fixed date(s) for delivery, caution is advised, as failure to manage delays effectively can result in costly penalties.
For any contract that includes such stipulations, be sure to incorporate buffers that can provide the necessary flexibility to address unforeseen delays, which can often be caused by third parties.
Litigation could be costly for any type of dispute, that’s why the resolution clause within a contract can be so important for both parties. Typically, the clause outlines the agreed resolution methods you should attempt before engaging a lawyer – which are usually a combination of mediation and arbitration.
We always recommend contracts that include such provisions, not just to avoid expensive legal fees, but because it can help to keep relationships intact.
This clause is placed within contracts to allow for circumstances that couldn’t have been reasonably anticipated or controlled. When triggered, it releases both contracting parties from the liability or commitment within the contract.
Examples of force majeure are quite diverse, from global pandemics to war, and can sometimes incorporate business exposures such as supplier failure.
Part two coming soon…
Hopefully, this blog has given you a better understanding of some of the clauses in your contract. Look out for part two where we highlight our next set of key terms!
If you have any questions about your existing cover, or you’re thinking of taking out a new policy, we can help. Call us today on 0161 533 0411 or fill in our online contact form and we’ll get straight back to you.
Uncategorized - November 7, 2022
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