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19 August 2016 · Templates

Passive/Active Terms and Conditions Analysis Tool

When analysing the terms and conditions of the main body of a contract and its accompanying schedules, it is easy to start reading though from the beginning to the end and highlighting various clauses, wording and details that jump out. This is one way of doing it.\r
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An alternative is to take the contract and schedules and search for the top ten clauses and schedules and identify the most significant items. You can do this without having to read the whole thing from beginning to end. The most significant items are typically price and payment, liability, insurance, any parent company guarantee, anything that hits your or your supplier's Profit and Loss account (such as liquidated damages), delivery risk, change control and performance metrics. \r
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(Note that this is a method that also allows you to identify what might be missing from the contract.)


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