The Thirty-Day Out Clause

How to Easily Stop Customer ‘No-Service’

One of the worst fears of taking on a new vendor is not knowing how they are really going to perform until you allow them to go to work for you.

Yes, you can check references.  Yes, you can do criminal background checks.  Yes, can look at how the potential vendor has performed in other companies similar to yours.  The unfortunate thing is no one wants to make a bad decision on a vendor – especially you with your job or business on the line.

The easiest way to minimize the impact of accidentally choosing a vendor who can’t fulfill your business’ needs is to mandate a “non-performance” clause in all of your vendor contracts during your negotiations.

The clause can be as simple as, “We (our company) reserve the right to cancel this contract with a 30 day notice if you (the vendor) cannot service our needs to the terms of this agreement.”  Of course check with your lawyer to approve this but for most industries and agreements this is more than satisfactory.

If your potential vendor balks at this “non-performance” clause then it is highly recommended not to do business with them.

The Thirty-Day Out Clause keeps your vendors honest while allowing you the peace of mind of knowing a bad decision is only 30 days away from fixing.

Image Credit: Despair.com

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