A common mistake when signing a contract is that insufficient attention is paid to the supplier's general conditions.
Reading the fine print is not the most pleasant activity, but it absolutely pays to carefully review a number of clauses.
Below you'll find 6 pitfalls that can cost a lot of money if you don't read them. We give a suggestion per clause on how to deal with it.
Suppliers are generally very flexible regarding these clauses. They too don't always pay much attention to them. So don't be afraid to ask for an adjustment.
1 - Contract Duration Not Stated in the Contract
Then definitely check what's in the general conditions. Before you know it, you've signed a 10-year contract.
Tip: Limit the contract duration to a maximum of 36 months.
2 - Cancellation Period Not Stated in the Contract
Don't assume this is standard 3 months and check what's in the general conditions. It often happens that the cancellation period is 6 months or even more.
Tip: Limit the cancellation period to a maximum of 3 months.
3 - Read Carefully What Happens in Case of Lack of Timely Cancellation
In B2B it's still legal to extend a contract with the initial duration in case of lack of timely cancellation. The 10-year contract thus becomes a 20-year contract in one go.
Tip: Replace the extension with the initial term with an extension of max 12 months.
4 - Price Changes
Often the general conditions refer to the sector index. This can be much higher than inflation.
Tip: Ask for a calculation example of how the sector index relates to the consumer index and negotiate about this.
5 - End of Contract Costs Are Not Mentioned
You have to pay attention to this in case of rental of certain products. E.g. waste containers, phone exchanges, drink dispensers, etc. In the general conditions, a substantial amount can be mentioned for collecting the rented goods at the end of the contract. These costs can be so high that savings that can be realized by switching to another supplier are completely eaten up.
Tip: Do the calculation in advance, ask to have this cost removed or negotiate about it.
6 - The Right to a Unilateral Valid Change of the General Conditions
This is often stated in the general conditions and ultimately gives free play to the supplier.
Tip: Have this clause removed
These are the main pitfalls that we see recurring regardless of the sector or the size of a company. Screen the general conditions at least for these 6 pitfalls and you'll save many costs during and at the end of the collaboration.
Do you have any tips yourself that you want to share, let us know.