Need to Draw Up Basic Contract with Company we Outsouce Work To...

Hi Guys,

We outsource a lot of the day to day work of our business to another company.

It works very well but we'd like to put a basic contract in place to protect ourselves from a couple of situations, the main one being them setting up in competition to us, doing similar work for a rival etc.

It does not need to be something hugely complex. I asked a solicitor friend of mine and she recommended websites like Practical Law Company, that have standard contracts and terms an conditions that you can adapt as you need
or Greens Practice Styles with template contract clauses for pretty much any situation.

I'm looking for either a recommendation of a legal firm to use or perhaps better still if someone that works in the area might be interested in helping us come up with this they could get in touch.

As I say we don't need anything vastly complicated, nor or we looking to pay big fees for this! We just need something basic in place to provide some reassurance.

Any advice on this would be much appreciated

Thanks!

Two questions for starters:

1. How much do you spend with them and
2. Are there others who can easily do the same work for you that they do?

Spear said:

Two questions for starters:

1. How much do you spend with them and
2. Are there others who can easily do the same work for you that they do?

Click to expand...

Thanks for the reply!

1. 30k+ per month
2. Not that easily, it's possible but it would be quite tricky to transition to someone else doing the work, ie it took quite a bit of work to get us where we are now.

What you seem to need is a service level agreement. If you google you will see a few templates.

becky said:

What you seem to need is a service level agreement. If you google you will see a few templates.

Click to expand...

An SLA is for managing performance and service levels (as the name suggests) so it would not be appropriate for the OP's needs as expressed:

"....to protect ourselves from a couple of situations, the main one being them setting up in competition to us, doing similar work for a rival etc."

Given the cost of 360k per year, there is certainly merit in drawing up a contract to protect value which is presumably even greater than that amount. The contract should give protection on elements such as: intellectual property and asset ownership, (i.e. including setting up in competition as the OP points out), TUPE, poor service (credits), audit rights, (possibly) site access, to name but a few... If there is software or customer data involved, even more protection will be needed. Standard "Supply of Service" terms and conditions work to a point, but you need to go a bit further when it comes to outsourcing agreements.

There is one other potential issue, however. Given that there are not many others who can deliver the service, and there has already been a significant investment in this relationship to date, the negotiation strategy will need to start with this in mind, i.e. there is no short term alternative. There is no point launching in with a fancy contract and expecting them to sign it if they believe you have no credible alternative.

I would recommend that you think about what alternatives you have to the existing supplier before commencing the contract negotiations process. I would be inclined to engage first with a commercial procurement professional first to bring you to the point where a contract was a viable option.

If you do proceed to contract, make sure you get some input from an experienced solicitor before final sign-off.

Thanks for the reply.

I've already discussed it with them and they are perfectly happy with everything we want in it.

So negotiation etc is not needed really, like I say we just need a basic contract to formalise the arrangements we already have in place. It's just there to give us some protection should anything change with the company we outsource to.

Any further advice on how to go about this would be much appreciated!

At this level (€360k p.a.) you should get a proper contract drawn up by a legal firm who specialise in this area. Getting standard templates and such is crazy.