Your business depends on a variety of third-party vendors to provide services such as website development, IT services, accounting, and marketing. This checklist outlines best practices for vetting vendors, including key contract terms to protect your business from legal risk.
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1. Review Vendor’s Website
- Check how long vendor has been in business.
- Review vendor’s areas of expertise.
- Consider vendor’s business strategies.
2. Research Vendor’s Reputation
- Request references. Learn from references’ experience, including items such as implementation, staff, and customer service.
- Obtain information about vendor through third-party websites, such as the Better Business Bureau, Yelp, or Angie’s List.
3. Conduct Online Search of Vendor
- Perform an online search of vendor.
- Review news articles or other mentions of vendor.
- Seek assurance from vendor regarding any negative or concerning information that comes to light.
4. Review the Contract
- Copyright: Address issues related to use of any intellectual property created under the agreement, including through the inclusion of a work-made-for-hire or licensing provision. Sample photography agreements can be found here: https://www.nar.realtor/legal/copyright-trademark/listing-photo-sample-agreements ).
- Standard of Performance: Ensure that vendor follows industry standards and that services are performed by qualified personnel.
- Indemnification: Seek indemnification from vendor for any third-party claims related to the vendor’s products or services.
- Assignment: Require your consent prior to vendor transferring any of its obligations to a third-party.
- Termination: Include a termination for convenience clause for maximum flexibility to terminate the contract for any reason and at any time.