With regard to technology, Docusign and others have fairly secure systems in place to ensure the integrity of e-signature contracts. Some organisations, however, still try to arrange in person signings where possible. In these circumstances, though, you will need to ensure that all signed contracts are stored safely and in a searchable repository as finding signed contracts remains a perennial problem for many who do not have comprehensive document repositories deployed.
With regard to your second question, many organisations have their legal functions handle the contract signature process. The larger the organisation, however, the more impractical such a set up can often be, as there are just not enough resources. Many organisations still have the sales function handling the signature process. There should be strict guidelines and processes in place to help ensure integrity and to prevent mistakes such as wrong versions being signed etc.
This is a very broad question! Shared services is normally internal, so what sort of 'shared service' do you mean?
Critical elements will be definition of scope, provisions for change In services, charging mechanism and KPIs.
In addition to the provisions that you might find in a typical services agreement (www.contractstandards.com/public/contracts/master-services-agreement) and statement of work www.iaccm.com/resources/, I would also make sure that you cover governance, change management, and innovation. In my experience, it is likely that the Shared Services model will change significantly over the life of the arrangement and you need to make sure that there are agile provisions in place to support such changes.
If you could provide more detail, perhaps our community will be able to provide you with a fuller response.
Thanks Paul and Anonymous for your response. I'm going to propose Shared Services Model to the Customer for Service Desk and End User Computing. It is primarily resource sharing across different Customers. Along with scope of services, support level, governance, charging mechanism, change management etc., I think its also important to address Security and Confidentiality of Customer's data in the Contract.
Can you please help me with a few model clauses that can be leveraged for Security and Confidentiality pertinent to Shared Services Model ? It would be great if you can share a standard agreement which was drafted for Shared Services only.
Thank you for your post. Choosing a neutral and well understood place of jurisdiction and applicable law is often the obvious answer when parties are located in countries that are unfamiliar. The Laws of England and Wales and the Laws of Switzerland are often used as neutral third party jurisdictions not least because they have well-developed and reputable jurisprudence. I note that you are proposing to include Arbitration according to LCIA - Article 16.4 of the new LCIA rules provides that, unless the parties have agreed otherwise in writing, the law of the seat of the arbitration will also apply as the law governing the arbitration agreement. Equally you could propose the adoption of the UNIDROIT principles which you can read more on here: www.unidroit.org/contracts.
Clearly a concern with unfamiliar jurisdictions is enforceability and the quality of the overall legal system. As this article indicates, Rwanda has made major efforts to develop its legal system and understands its importance in the context of international trade www.lexology.com/library/detail.aspx
You will find extensive guidance on Force Majeure in the Resource Library on the IACCM website.
As you can imagine, this clause has been the subject of much writing in recent weeks and many organizations are reviewing their current approach. It is important to remember that a claim of Force majeure has to be accompanied by clear evidence that performance is impossible and it is also the duty of the party claiming Force Majeure to take all reasonable steps to mitigate its consequence. If it is the supplier claiming Force majeure, it is reasonable that the customer might terminate or seek alternate supply - and there is no particular reason why that action could not be immediate if they so wish.
Obviously there are many factors to take into account. For example, is the supplier simply suggesting there will be a delay in supply, or are they no longer able to supply at all? Will it be quicker and easier for the customer to find an alternate, or to accept the revised date? In general, any claim of Force majeure results in some level of negotiation. It cannot be used by either party just as a matter of convenience.
• GMR Energy LImited
Answers to questions in same order as above:
1) Termination for prolonged FM - Generally its a negotiated term. Typically for a FM event neither party is liable for any compensation from the other side, specially if its a natural one and insurance covers are available.Termination right to trigger after indemnity period under insurance covers. If no such inusrance cover is available then it becomes a commercial decision for how long my budget under the contract can sustain such loss . That should decide the period of FM event beyond which termination right can be excercised under the contracts.
2) Alternate vendor - This provision is a must for eventuality . Experience - it is used only rare cases , as removing the existing vendor and putting a new vendor is generally comes with additional risks. So even if vendor is on the wrong side of the contract in terms of cost (not time) then we may compromise and move ahead as the alternate option is more expensive. In the instant that existing vendor is not at all able to perform because it has become financially bankrupt or some thing else the we do not have any choice but to terminate and deploy alternate vendor.
3) Yes its a standard practice to put such provisions under the contracts. However these practices are typically used in one time contracts , when we do not have any subsequent use of the vendor. But if we are depending on them for a long period and repeated orders etc. it becomes difficult and owners/customers tend to compromise.
I suggest you start by reviewing the relevant Contracting Principle which you'll find at www.iaccm.com/resources/contracting-principles/
These principles are the result of cross-industry, buy side and Sell side reviews and therefore represent market norms. You can use these with your customer to explain that unlimited liability is not market practice.
Hi Jennifer - we can't leave you hanging here when you're looking to help us out with some great material !
I think it would be great to see an example of one of the processes that someone has been through. Fire and Rescue NSW in Australia I understand looked at the process for a supplier, and went not just from tracking the supplier through holding companies, but also looking at the materials and places of manufacture of the garments and fabric themselves.
It was a real eye opener for myself and many in the room at the meeting, and stories like this help open up our eyes to just how wide we need to look when thinking about slavery in the supply chain.
Hello, we are being asked similar questions by a number of members. All FM clauses in new contracts should include a reference to the ongoing pandemic. As you point out there is a risk still that there will be continued fallout from this both on the buy and sell sides. We are advising members to be as prescriptive as possible in thinking about and addressing in their FM clause any future risks that could put the services or goods to be delivered at risk. Think beyond the usual FM remedies of suspension or termination. You may need alterntive remedies which could include a reduction in scope of what is being deliverd together with any associated pricing. You may also wish to consider a phased approach to ramping up obligations after a reduction period due to ongoing uncertainty. It is difficult to cater for all future uncertainties. Thus, we advise that you also build into the contract further agility to cater for complete unknowns that still might arise. IACCM has developed a framework called the VCU to help our members to map out uncertainty within their contracts and ensure that appropriate terms and conditions are used for each contractual relationship. Please contact us if your organisation is interested in participating one of our workshops around this.
I think also important to make the point that when an event is known and on-going, in itself it cannot really be a Force Majeure event! So I'm not sure that either party could invoke coronavirus in a contract being agreed now.
What do you think, Paula?
• TRG Law Limited
At least under English law, what qualifies as FM depends only upon the wording of the relevant contract clause. Just because a situation such as Covid is known at the time of contracting does not I believe, of itself, prevent a party relying on an appropriate clause providing you can bring yourself within the wording. Of course, if the relevant clause limits FM to matters 'not reasonably foreseeable' then that would be another matter but many clauses do not do so.