Many organizations use a vendor’s services to support their business goals. It is important for the business to have a contract in place with the vendor that addresses the terms of service, the costs involved and the length of time the vendor will provide the service.
However, there are also other key areas the business may want to address in the vendor contract that may not be as apparent.
Proprietary or confidential information
When a business contemplates entering into an agreement with a vendor, they should be aware of the potential impact to their proprietary or confidential business information. It is important for the contract to address who has ownership of that information and how the vendor will safeguard it.
Change of services and termination
The business may not always consider that the vendor’s service could change over time. It may want to take note of any internal approval processes, timelines or costs that could result from a change in services, as well as include language in the contract to address any expected changes.
The business may also want to address costs for terminating the agreement early and which circumstances will allow it to terminate the agreement. Sometimes, a vendor may want the business to pre-pay for its services. If the business agrees to do this, the contract can also address a refund of all or a portion of that pre-payment.
It’s also important for the business to address the return of their property, if applicable, when the agreement ends. An experienced attorney can draft vendor contracts and provide advice if there is a dispute.