Business guide
Before Signing a Vendor Agreement: Seven Terms Worth Checking
Most expensive contract disputes were visible in the document before anyone signed. These seven terms deserve a close read every time.
1. Payment terms and late remedies
When is payment due, and what happens when it is late? Look for interest, collection costs, and whether the vendor can stop work while keeping your deposit.
2. Scope and change orders
If the work is not defined precisely, everything extra becomes a negotiation. A good agreement defines the deliverables and the process, and price, for changes.
3. Termination rights
Can you exit, and what does it cost? Watch for long auto-renewal terms with narrow cancellation windows and early-termination fees.
4. Liability caps and indemnity
Who pays when something goes wrong? A one-sided indemnity clause can make you responsible for the vendor's own mistakes.
5. Insurance requirements
The vendor should carry coverage appropriate to the work, and you should be named as an additional insured where the risk justifies it.
6. Dispute resolution and venue
Arbitration clauses, jury waivers, and out-of-state venue provisions decide where and how a fight happens, often before you know there is one.
7. Ownership of work product
For creative, technical, or custom work, confirm who owns the result. Paying for work does not automatically mean you own it.
This guide is general information, not legal advice for your situation. Every case turns on its own facts. Contacting the firm does not create an attorney-client relationship.