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Tip 8: Service Contracts
· Watch out for the Price Adjustment Clause in Service Contracts…
When you enter into long-term service contracts, you might find a clause detailing price adjustments to the contract.· Common Avoidable Costly Error Business Owner's Make…
The price adjustment clause might read something like this: From time to time during the term of this agreement, Seller shall have the right to adjust the price charged for the product by giving Buyer written notice of such adjustment. In each such event, such adjustment shall become effective fifteen (15) days after the date of the notice. If within such fifteen (15) day period Buyer furnishes Seller with a copy of a bona fide firm written offer to Buyer from a responsible supplier offering to provide at a lower price than the adjusted price of Seller of like grade, quality, and quantity as provided …then you might get out of contract or get the Seller to hold the current price!Don't put off checking out the competition, you only have 15 days to do your homework or you will be committed to the new price increase.
The price adjustment clause might state that there will be an increase at a certain percentage per year….
Don't be rushed into signing a contract. Take the time to do your research of the market and get quotes from other companies to be sure you are getting your best deal or seek legal counsel. Don't forget you can always alter the clause; you are still in the driver's seat…until you sign on the dotted line!!!
Remember, "Haste makes Waste!"