Agreements register

If you want to cancel/vary an agreement, your business will have to give adequate notice of its intention to do so to the other party. How do you ensure no deadlines are missed which could result in financial penalties?

Giving notice

Contracts or agreements with suppliers could range from minor overheads, e.g. for a postal franking machine, to a significant spend on a direct cost, e.g. using a new supplier for one of your product’s components. The additional finance costs of any agreement are found in three areas: (1) specified set-up fees; (2) any ongoing variation charges/penalties; and (3) cancellation fees/penalties when you want to cut short the arrangement. One thing that you should seek out in any agreement is the clause that refers to “Notices”. If you want to cancel/vary an agreement, your business will have to give adequate notice of its intention to do so to the other party.

In practice, how much notice and what particular form it takes varies. For example, "A notice may be delivered in person or by first class post or fax and shall be deemed to have been served if by hand when delivered, if by post 48 hours after posting and if by fax six hours after dispatch."

Failure to give adequate notice can lead to additional costs for your company in the form of either cancellation charges or being locked into an onerous contract for longer than it needs to be.

Set up and maintain control over supplier contracts for your business by using our Agreements Register. This not only sets out the renewal date but also highlights the notice giving date and the form this notice has to take. This will also help you plan for those interruptions to the budget triggered by renewals of existing agreements.