3rd Party contracts. Early Termination fees

[snmp899]

Hi All

In your experience, when working with B2B third party vendors, not contractors/workers and employees, but 3rd party companies.

In the contract what are early termination fees as a percentage for IT 3rd party companies, if the client was to cancel the contract?

Thanks

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[northernladuk]

Depends. How long is a piece of string?

[GhostofTarbera]

Depends. How long is a piece of string?

30 cm if a 30 cm piece of string


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[BlasterBates]

If you commit resources to a client then you agree a notice period, and make it clear that should the contract be terminated earlier a fee equivalent to the notice period is payable. That notice period can be any length, there is no standard,

[snmp899]

Ive often heard comments in the industry from senior managers, that say too expensive to change supplier/cancel the contract. Just curious as to what might be typical exit fees .. 50%

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[northernladuk]

There is no typical. It depends on the situation.

[Lance]

Ive often heard comments in the industry from senior managers, that say too expensive to change supplier/cancel the contract. Just curious as to what might be typical exit fees .. 50%

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It’s not just exit fees though.
Incumbent suppliers are usually embedded deep into an organisation. That all needs replacing. And if you want to TUPE their staff that has significant costs.

Usually the best way to get value from a supplier is to manage them properly. And that is not done very often.