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This Precedent is a contract review clause which gives the contracting parties the opportunity to review both parties’ performance of the contract and to discuss the implementation of any necessary changes. It is drafted to be favourable to the customer. It is suitable for use in a business to business agreement only, and is typically found in a supply of services or outsourcing agreement.

Why contract review clauses are used

It is a commercial reality that parties doing business together will often not simply enter into self-contained discrete contracts with each other but engage in a business relationship that evolves and can change over time. Particularly in long-term contracts the surrounding circumstances in which a contract is performed can change (for example, in relation to the economic climate, technology developments, market demand, supply chain issues etc). It is therefore good business practice to periodically review the performance of a contract. Doing so can pre-empt any performance issues that may lead to potential contract breaches and disputes between the parties and help to maintain an ongoing business