How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask JPEsq Your Own Question
JPEsq
JPEsq, Attorney
Category: Business Law
Satisfied Customers: 5106
Experience:  Experience as both in-house and outside counsel in general business and transactional law
14397910
Type Your Business Law Question Here...
JPEsq is online now
A new question is answered every 9 seconds

As a part of a Proposed Service Agreement for a Vendor to continue

Resolved Question:

As a part of a Proposed Service Agreement for a Vendor to continue to support a Software Application (past an original Service End Date) the Service provider is requiring that in order to fund and maintain the resources necessary to provide the service, the 2 year period of the extension must be paid for up-front. and I am trying to identify some possible wording for inclusion in the agreement protecting the customers (our) interest as respects paying the 2year fee up-front. __I welcome any thoughts, comments, suggestions! Thank You!
Submitted: 6 years ago.
Category: Business Law
Expert:  JPEsq replied 6 years ago.
Are you looking for some sort of warranty and refund language? Or some language that says if the contract is terminated prior to the 2 years, some of the money will be refunded? What interest exactly are you hoping to protect?
Customer: replied 6 years ago.

I am looking for language speaking to if the contract is terminated early some of the money will be refunded.

 

Additionally, could or should the agreement address damages as a result of the service ending abruptly and leaving me "in a bad situation"??

Expert:  JPEsq replied 6 years ago.

Ok. You can add language that states that the fee is to cover a two year period, if the service is terminated by either party for any reason prior to the end of the 2 years period, that a pro rated amount of the fee will be refunded. You could also add a liquidated damages section, which would state that if they terminate the agreement, you will be entitled to liquidated damages of X dollars.

 

I can give some samples, but I am not allowed to draft your contract clause for you.

 

Termination and Refund. The term of this Service Agreement is 24 months. The agreed upon price for the 24 month period is X dollars. This agreement may be terminated at any time by either party.

A. Termination for Convenience: If A (you) terminates the Agreement for convenience, B shall be entitled to the entire fee of X dollars. If B terminates the agreement, the fee shall be refunded at a pro rated for the remainder of the term of the agreement.

B. Termination for Cause: If A terminates the Agreement because of B's failure to perform as agreed, B shall return the portion of the fee at a pro rated.

C. Calculation of Pro Rated Rate: The total fee of X dollars is for a 24 month period. Each month shall be 1/24 of the fee. The fee shall be earned on the 1st day of each month. In the event of a termination, the fee for that month shall be considered earned, and every month thereafter shall be refunded.

 

This is just a general sample... you will have to play with it to make it work for you.

Customer: replied 6 years ago.

I would appreciate it if you could forward the examples of the Liquidated Damages Section.

 

Upon receipt of that, I should be "good" and I can ACCEPT ANSWER

 

Thanxx!

Expert:  JPEsq replied 6 years ago.

If B cancels the agreement or the agreement is terminated due to nonperformance, B shall pay liquidated damages in the amount of $X per day for the remainder or unexpired portion of the term of the agreement.

 

or

 

If B cancels the agreement or the agreement is terminated due to nonperformance, B shall pay liquidated damages in the lump sum amount of $X

JPEsq and 2 other Business Law Specialists are ready to help you

Related Business Law Questions