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Perform and manage

Keep your contracts working as your business changes: renewals, changes, deadlines and audits.

03

03 — Perform and manage

What clients ask us

A supplier doesn’t deliver what was agreed: what are our options?

First read the contract and document the failure. Under the Civil Code you can generally put the supplier on notice and require performance, suspend your own obligations if the breach justifies it, claim damages or a price reduction, and in serious cases terminate. Follow any notice and cure steps in the contract and keep the tone factual. Take advice before you terminate or withhold payment, as a wrong move can put you in breach.

How do we change or renew a contract on good terms?

Start well before the notice date, because automatic renewal clauses often lock you in for another term. Check what the contract says about price indexation, change control and termination. Record any change in a written amendment signed by both sides, not in emails alone. Use renewal as leverage: review performance, benchmark alternatives and bring open points to the table. We can draft the amendment or negotiate the renewal.

How do we keep track of deadlines, renewals and obligations?

Most contract problems come from what nobody remembered: a notice period that lapsed, an option not exercised, a report not sent. Keep one register of each contract’s duties, rights and dates, linked to the clause they come from, with reminders ahead of notice and option windows. Name an owner for every contract. The same applies to IP deadlines and renewals.

What if circumstances change and the contract becomes too costly to perform?

The Civil Code (Book 5) allows a party to ask for renegotiation when unforeseen changed circumstances make performance excessively onerous, and a court may adapt or end the contract if talks fail. This is a last resort and can be excluded or regulated by contract. Better to include a price-adjustment or change-control mechanism, and to keep performing meanwhile unless advised otherwise.

Can we audit a supplier or partner, and can they audit us?

Only if the contract allows it, so audit rights should be negotiated at signing. Typical clauses cover notice, frequency, scope, confidentiality and who pays. Royalty and licence audits check payments and permitted use, and GDPR processing agreements must let the controller verify compliance. When you are audited, check the contract’s scope before you hand over data, and protect confidential information.

How do we monitor that a distributor or licensee respects our brand rules?

Write the rules into the contract: brand guidelines, quality standards, approved channels and an authorised-seller list. Then check in practice, through periodic reviews, sample products and monitoring of online listings and domain names. Document breaches and follow the notice-and-cure steps. Without quality control, a trademark licence can weaken the mark itself.

Do we have to pay late payment interest, and can we charge it?

Between businesses, the EU Late Payment Directive, as implemented in national law, provides for statutory interest and compensation for recovery costs on overdue invoices, unless parties agreed otherwise within the limits of the law, and grossly unfair terms can be challenged. Rates and details differ per country. Put payment terms, interest and recovery costs in your contract and invoices. In many countries a court can reduce a penalty clause if it is disproportionate.

What happens to our contracts when the business is sold or reorganised?

It depends on the deal. In a share sale the contracts stay with the company, but change-of-control clauses may let the other side terminate. In an asset sale, contracts generally need the counterparty’s consent to be transferred. Check assignment and change-of-control clauses early, and plan any transitional services. Hidden contract terms are a common finding in due diligence.

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