Performance and delivery clauses in a contract

Setting the standard

Standard of care says how well the work must be done when no number can capture it, usually with the skill and care of a competent professional in the field. Service levels replace that judgement with measures such as uptime, response times or turnaround, and service credits set the price reduction when a level is missed. Reporting obliges the supplier to show the figures rather than leaving the customer to discover a miss. Read service levels and service credits together, because a credit is often drafted as the only remedy, which can quietly cap what a customer can recover.

Delivering and accepting the work

Delivery covers where, when and in what form goods or work arrive. Time is of the essence makes a deadline a condition, so missing it lets the other side end the contract, and extension of time sets out when a deadline moves because of a delay the supplier did not cause. Acceptance testing defines how the customer checks the work and what counts as passing, which matters because payment and warranty periods usually start from acceptance. Change control is the process for altering scope without tearing up the contract, and it is the clause most projects end up relying on.

Who does the work and how much of it

Key personnel names the people a customer is paying for and limits replacing them, and subcontracting says whether the supplier can pass work to others and who stays responsible if they do. Exclusivity stops one side dealing with competitors, and minimum commitment fixes the volume or spend a customer guarantees in return for a better price. These four are the most negotiated in the group, since each trades flexibility for certainty. Every page carries a definition, sample wording, variants and negotiation points, and none of it is legal advice.

Every page in this collection

• 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.