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Identifying and Managing Risk
Key issues to consider before
entering into commercial
arrangements…
• what are the key risks? ‐ spotlight on schools – the
importance of identifying and
managing risk
• the need to formalise
agreements and protections ‐ what are the usual clauses and
what to look out for
‐ key terms and questions to ask
‐ types of contracts
• practical considerations
“BBC’s Panorama highlighted a
widespread phenomenon of schools
overpaying for ICT products by many
times the worth of the equipment in
question…169 schools signed ‘dodgy’
contracts with 10 head teachers resigning
or being suspended”
“The large figures on a photocopier
service agreement sent to a school state:
5p per colour copy. Actually the price
charged per colour copy is more than
three times that – 15.5p. Yet this figure
appears nowhere on the contract, and the
maths setting out how it is calculated are
buried in the small print”
“Diverting thousands away which should
be spent educating children”
The trouble is, as the National Association
of Head Teachers puts it: “We don’t want
heads to be experts in hire purchase
agreements; we want heads to be experts
in teaching.”
1. tightening budgets
2. taking on more responsibility as LA pulls
back on services it can provide
3. financial scrutiny in schools
4. well publicised problems with some
contracts
5. many schools feel they have no option but
to deal on a supplier's un-amended standard
terms
6. increasing number of service providers
entering the education market
before signing on the dotted line… • what are the usual clauses and
what to look out for
• key terms and questions to ask
Express terms • can (sometimes!) be oral as well as
written
• standard terms are important
• can be binding even if unread
• likely to be onerous
• they will prevail over implied
terms
Implied terms – if not expressed a) business efficacy
b) custom/trade usage
c) course of dealing
d) parliamentary acts and regulations
e.g. Supply of Goods and Services
Act 1982 (time, standard, price)
• what is the term of the agreement?
• is there an initial fixed-term period
during which we cannot terminate
the arrangements?
• after initial period is there rolling
period?
• can both parties terminate the
contract or can only one party
terminate the contract?
• what is the notice period for
terminating the arrangements? Is
it too long? Does the notice given
to terminate need to expire on a
particular date?
• have you fully understood the
terms you are signing up to?
• what are your obligations? e.g.
returning equipment?
• are the services/goods you expect
to receive fully set out in the
agreement?
• are the services/goods to be
provided/delivered on a particular
date?
• are there any warranties given as
to the standard/condition these
services/goods will be in?
• are the costs properly set out? ‐ fixed or variable?
‐ how often should payment be made and
how?
‐ are prices inclusive or exclusive of VAT?
‐ are delivery costs or other taxes
included?
‐ can prices be increased unilaterally or
subject to market fluctuations?
‐ are you entitled to a profit share? How
will this be calculated?
• is the supplier seeking to limit or
exclude their liability in any way?
• do you need new insurance/or
update existing insurance? What
insurance should the contractor
have (type, level etc.)
• catering, cleaning, security,
facilities management, IT support
services
• key issues ‐ TUPE
‐ data protection
‐ safeguarding
‐ long duration
• orderly handover on termination
• who is the contractor (sole trader,
partnership, limited liability
partnership, company, trusts, trade
unions)
• are the correct parties entering
into this agreement? Do you know
who you are contracting with?
Agents etc.
• how established are they?
‐ referees?
‐ financial health?
‐ consumer complaints?
1. do not sign unless you fully
understand the terms of the
contract – if in doubt seek advice
2. compile a list of contracts and
note notice periods and
termination dates
3. shop around
www.education-advisors.com
