<< Previous: The full contract - clauses to include
1. Most favoured nation
These clauses aim to provide that your organisation gets the same or a better price than any of the supplier’s other customers (at the start and/or in the future).
2. Step-in
This provides that if the supplier is in default then your organisation (or a nominee of your organisation) has the right to “step into” the position of the supplier and provide the services in place of the supplier (and deduct costs of doing this from the payments which would have ordinarily been due to the supplier). These are useful clauses for buyers to obtain, but are unpopular with suppliers.
3. Outsourcing
Your organisation may reserve the right to hire a new supplier as the prime contractor and put your original supplier under the control of the new supplier (ie, the original supplier becomes a sub-contractor to the new supplier).
4. Benchmarking
In a long-term relationship your organisation may wish to compare the prices for goods and services which it is paying for against general market rates of other suppliers. If it transpires that your organisation is being charged more than general market rates your organisation may demand a discount from its supplier so prices paid are in line with general market rates.
5. Freedom of Information
If your organisation is a public body it will need to comply with the Freedom of Information Act 2000. In particular, your organisation may have to disclose details of contracts upon request from members of the public, unless it has an exception under the Act.
This will need to be considered when the contract is negotiated and agreed. Public sector bodies tend to insist on including FOI clauses in contracts.
6. TUPE
If your organisation is outsourcing goods or services for supply by an external supplier then it could be that your employees who originally provided those goods or services for your organisation may transfer to the new supplier under the Transfer of Undertakings (Protection of Employment) Act 2006 (TUPE). In this case, provisions relating to TUPE will need to be included in the contract.
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