This Master Services Agreement contains two critical commercial risks and three high-risk clauses that materially favour the vendor. The combination of an unbalanced liability cap, an uncapped pricing escalation, and a 24-month auto-renewal creates significant long-term financial and operational exposure. We recommend negotiating the five flagged items below before counter-signing.
Locks you in for 2 more years and stacks pricing escalation on top.
Replace with annual renewal and 30-day notice.
Highly imbalanced. If they cause damage, your recovery is tiny.
Mutual cap at 12 months of fees with carve-outs.
Real cost can outpace inflation by 5%+ per year — compounding.
Cap uplift at CPI or CPI + 2% maximum.
Limits your ability to switch vendors or commercialise the output.
Customer-owned IP with vendor license for delivery.
Creates lock-in beyond the renewal window.
30–60 days notice with no buyout.
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