Contract clauses, one at a time
Each page explains one clause: what it does, a sample written for an invented business, the usual variants, the points worth negotiating and the risk of leaving it out. Sample wording is a starting point, not legal advice.
150 pages, page 5 of 7
Payment and pricing clauses in a contract
- Most favoured customer clause: promising the best price
A buyer asks for this clause to stop shopping every year. A supplier gives it and quietly loses the ability to discount anywhere else, which is why the definition of comparable does all the work.
- Payment terms clause: when the money is actually due
Most invoice disputes are not arguments about the amount, they are arguments about the date. A payment terms clause removes the argument by naming the trigger, the period and the method before any work starts.
- Price adjustment clause: moving a price after signing
A multi year contract at a fixed rate is a bet on costs, and one side always loses it. An adjustment clause replaces the bet with a procedure.
- Retention money clause: holding back part of a progress claim
Retention is the money a subcontractor has earned and cannot spend. Getting it back is a paperwork exercise, and the clause decides how long that exercise takes.
- Set off clause: deducting what the other side owes
Set off looks like an accounting convenience and works as leverage. Whoever holds the right to deduct decides who funds a dispute while it is being resolved.
- Suspension for non payment clause: pausing work, not ending it
Termination is a blunt response to a late invoice, because it ends the revenue as well as the exposure. Suspension keeps the contract alive and puts the pressure where it belongs.
Performance and delivery clauses in a contract
- Acceptance testing clause: deciding when the work is done
Suppliers fear a customer that never says yes, and customers fear being told a half working system was accepted. An acceptance clause gives each side a date, a test and a decision, with deemed acceptance usually doing the tie breaking.
- Change control clause: requesting, pricing and approving a scope change
Projects change weekly, and a change agreed in a stand up meeting has no price or date attached until someone writes it down. The change control clause makes writing it down the only route to more work, more money or more time.
- Delivery clause: where, when and how the handover happens
A truck at the wrong gate at the wrong hour is a delivery that did not happen, whatever the docket says. The clause earns its place by deciding in advance what a successful handover looks like and who pays when one fails.
- Exclusivity clause: dealing only with each other, within limits
Exclusivity swaps one party's freedom to shop around for something measurable in return. The clauses that cause trouble describe the promise in careful detail and the return in a single vague line.
- Extension of time clause: moving the completion date fairly
Liquidated damages only work if the completion date can move when the principal causes delay. The extension of time clause is what keeps that date fair, and its notice rules are where most claims are won or lost.
- Key personnel clause: keeping the people the client chose
Clients often buy a consultancy because of the two people who pitched the work, then meet a different team on day one. A key personnel clause makes the pitch team part of the contract and puts a price on changing it.
- Minimum purchase commitment clause: buying a set amount or paying anyway
Suppliers price for volume, so a buyer that wants the low price is often asked to promise the volume as well. The drafting question is what the buyer pays when demand drops, and whether that amount is a fair price or a penalty in disguise.
- Reporting obligations clause: what the supplier must tell you, and when
Most customers learn that a project is in trouble from a report that arrived late or said nothing. A reporting clause fixes the contents and the deadline, so bad news surfaces while there is still time to act on it.
- Service credits clause: what a missed service level costs the supplier
Service credits are the price adjustment that makes service levels bite without a lawsuit. How they are sized, capped and claimed decides whether they motivate the supplier or simply become a small discount the supplier budgets for.
- Service level clause: turning good service into numbers
A promise of reliable support means whatever the unhappy party wants it to mean. A service level clause replaces that with a target, a measuring window and a report, so both sides can see from the same data whether the service is working.
- Standard of care clause: how good the work has to be
Most service disputes are not about whether work was done but whether it was done well enough. The standard of care clause is the ruler that question is measured against, and the words chosen move the answer considerably.
- Subcontracting clause: who else may do the work, and who answers for it
Customers choose a supplier after checking its insurance, security and references, then discover part of the job was done by a business they have never heard of. The subcontracting clause decides whether that is allowed and makes sure the checks the customer ran still count.
- Time is of the essence clause: when a missed date ends the deal
Five words can turn a late delivery from an irritation into an exit. That is why suppliers read them closely, and why a clause applying them to every date in a contract is rarely what either side needs.
Property and tenancy clauses in a lease
- Bond clause in a lease: amount, lodgement and return
Bond disputes happen in the last week of a tenancy, but they are decided by what was done in the first week: the amount taken, the lodgement and the condition report. A clause that follows the statutory steps makes the eventual claim routine.
- Break clause in a commercial lease
Break clauses in England and Wales are read strictly, so a small arrears figure or a partition left behind can keep a tenant bound for years. The safest break for a tenant has a clear date, a clear notice method and as few conditions as the landlord will accept.
- Holding over clause: staying on after the lease expires
Holding over happens more often than either side plans, usually because renewal talks run past the expiry date. A clause that settles the rent, the notice and which terms survive stops an informal arrangement turning into an argument about what kind of tenancy exists.
- Landlord access clause: entry, inspections and notice
Entry disputes rarely involve a dramatic intrusion. They are about an inspection booked for the wrong day, a tradesperson arriving unannounced or an open home every Saturday, and a clause that lists each reason with its notice period prevents most of them.
- Make good clause: what a tenant leaves behind
Make good is often the largest bill a commercial tenant faces at the end of a lease, and it arrives when the business has already moved on. A clause tied to a photographed condition report, with a landlord election made well before the last day, turns an open ended obligation into a list.