TERMS OF THE BUSINESS

1.DEFINITIONS AND INTERPRETATION

This contains a few definitions which are in a format that does not have to be changed depending on specific project details.

Clause 1.2 makes it clear that these terms are the only ones which apply to the contract and anything put forward by the client is excluded.

2.PROVISION OF SERVICES

This sets out the basic obligation of the firm to provide the services which are set out in the Schedule.  If any equipment is to be supplied by the client then the wording will need to be changed slightly or else this point can be dealt with in the Schedule.

3.DURATION

The wording assumes a 12 month contract which will automatically be renewed unless terminated.  Any different period should be set out in the Form of Agreement.

4.FEES & PAYMENT

This clause contains the default position for invoicing and payment.  Any special terms should be put into the Schedule.  Clause 4.2 requires the client to query invoices within 3 days and clause 4.3 provides for interest if payment is late.  The law referred to here allows the firm to claim interest at the rate fixed by the government which at present is around 8% above base rate.  An alternative is to have a rate fixed in the contract – e.g. 3% above the base rate of Barclays Bank.

Price increases are dealt with in clause 4.5.  In practice, it is going to be necessary to obtain the client’s agreement to any increase in charges before they are implemented unless there is a formula in the contract – e.g. that the annual increase will be in line with RPI.

5.FIRM’S OBLIGATIONS

This clause contains some general obligations on the firm, in particular that it already knows or has obtained references from its cleaners as well as ensuring that they are reliable.

If the firm provides uniforms for its staff, this can be mentioned in clause 5.3.  

Generally, clause 5 is designed to give some assurance to the client that the cleaning company and its staff can be relied on.

6.CLIENT’S OBLIGATIONS

The clause deals with a number of practical matters designed to ensure that the firm’s cleaners can get access at the agreed times and they know how to deal with the fire alarm and any other security systems.  In addition, the client is required specifically to ensure compliance with health and safety requirements.

7.LOSS OF PROPERTY

This is designed to ensure that the firm’s liability for loss or damage to client property only arises if there is proven default on the part of the cleaning staff.  The firm should maintain a public liability insurance policy to protect it against this risk.

8.CLIENT COMPLAINTS

It is sensible to have a time limit within which clients are expected to raise any complaints.  While this clause contains appropriate wording, if the client does not raise a complaint within 2 working days, the firm could still have a potential claim against it.

9.SUSPENSION OF SERVICES

If the client does not pay or commits some other serious breach of the contract, this clause gives the firm the option to suspend the contract rather than terminate it altogether.  If you decide to exercise your right to suspend, you should give notice to the client setting out the reasons for suspension.

10.TERMINATION

Under 10.1 either side can terminate on one month’s notice once the initial period (of 12 months) has finished.  If you want the contract to run from year to year, then the wording would need to be change or alternative arrangements set out in the Schedule.

Clause 10.2 allows either side to give notice to terminate if the other party becomes bankrupt or commits a breach of contract.  Under clause 10.3 the client has an obligation to pay compensation under certain circumstances.

11.FORCE MAJEURE

Circumstances beyond the control of the firm would allow the firm to avoid its obligations under the Contract.  Whether a client would accept that shortage of staff is a “force majeure” is a matter of conjecture, but on the face of it, this clause should give some protection to the firm in such circumstances.

12CONFIDENTIALITY

Since the firm and its employees might have access to confidential information at the client’s offices, the clause is designed to give some comfort to the client who has the right to insist on the firm having written confidentiality undertakings signed by its staff

13.NO SOLICITING OF FIRM’S EMPLOYEES

Cleaning contractors frequently run the risk of losing staff to clients.  This clause is intended to prevent the client from offering work to the firm’s cleaners both during the contract and for six months after it comes to an end.  A breach by the client entitles the firm to claim compensation as set out in the clause.

14LIABILITY

This clause is designed to limit the firm’s liability, first by excluding liability for indirect losses, incurred by the client and secondly by capping the liability in any month at the level of fees that are payable under the contract.  Since it is not permissible by law to limit liability for death or injury, this risk is unlimited.  While the contract does not require it , the firm should take out public liability insurance to protect against these risks.

15LAW & DISPUTES

If a dispute occurs, this clause has a three-stage process for dealing with the problem.  First, direct negotiation between senior executives, secondly, if this does not resolve the matter, the dispute can be referred to mediation.  (Our free document Z140 gives some information on the mediation process)  Only after these processes can a dispute be referred to the courts.

16GENERAL

This clause contains some provisions that lawyers refer to as “boilerplate” clauses.  

Under clause 16.1 the wording makes it clear that any previous arrangements or agreements are of no effect once the contract is signed.

Under clause 16.2 if one of the parties is let off the hook after committing some breach of the contract that does not prevent the other party from later taking action against him.

Under clause 16.3 if one of the terms of the contract became invalid for some reason, this clause deals with the situation.

Under clause 16.4 neither the client nor the firm has the right to transfer the contract to somebody else.