Our knowledge resources reflect the breadth and depth of our expertise, our insight into the issues which matter to your business, and our understanding of the markets in which you operate.
In this short video, Richard Offord, Katie Hindley and Jonathan Rush provide a 5 minute primer on key pricing issues in commercial contracts. Topics covered include whether suppliers can raise prices unilaterally, how to deal with inflation, cost plus and open book pricing, audit clauses, "best price" or MFN obligations, price-matching clauses and benchmarking.
In commercial contracts, the terms of payment are usually a key element of the parties' bargain – so if a customer fails to pay a material sum on time, then surely the supplier should have a right to terminate the contract? Quite possibly, but in practice it may not be as straightforward as this – and if the supplier reaches for the "big red termination button" prematurely, without a careful assessment of its rights, it can be a costly mis-step.
What happens where you're required to pay in a different currency from your own and exchange rate fluctuations mean that suddenly, the cost (in your own currency) has gone up considerably? We look at how the English courts have approached this issue and what you can do to protect yourself against this type of risk.
Benchmarking mechanisms in commercial agreements are intended to help customers to assess whether they are getting a good deal. But both suppliers and customers can sometimes end up feeling that the whole process is more trouble than it's worth.
Imposing an obligation on another business to offer the best prices and terms that it offers to all other customers can often seem attractive – but such clauses are not always straightforward. In this briefing, we explore some of the difficulties and discuss the key points to consider for both customers and suppliers when negotiating such clauses.
Audit clauses can be a useful tool for verifying compliance with contractual obligations, especially on compliance, pricing and payment issues. But what are the key drafting considerations?
In an environment where costs are increasingly unpredictable and escalating, pricing mechanisms based on cost plus a margin may seem an attractive option, at least for suppliers. But as we explain below, there are a number of pitfalls for the unwary – and it's vital to build in appropriate contractual protections.
Although pricing will often loom large in negotiations, provisions setting out the mechanics of the payment process and related terms don't always get the attention they deserve – which can lead to problems once the contract is being performed. In this briefing, we look at some key issues that suppliers and customers need to watch out for.
The recent announcement of the UK Government's Payment and Cash Flow Review has once again put the spotlight on late payment clauses and other payment practices. Larger businesses in particular may be criticised for failure to comply with legal requirements or "best practices" in relation to their purchasing activity.
With inflation at its highest for many years, many businesses are looking again at price indexation clauses. This briefing explores when they can be useful, which index to use, and whether the best known index - RPI - has a future. It's the second in our series of briefings on pricing and payment issues in commercial contracts.
Against a background of high inflation and a challenging economic environment, many businesses are looking at whether they can raise prices. However, as we explain below, even where a contract appears to allow for this, much depends on the precise wording and what constraints the courts may decide to impose.