Outsourcing: How to Avoid Contract Disputes

23.06.2011

When outsourcing disagreements arise, the supplier may blame the customer. Therefore, the contract should require the supplier to provide contemporaneous written notice to a specified officer of the customer when the supplier contends that the customer is failing to meet its obligations. That will go a long way toward "avoid[ing] costly litigation over retrospective, unfounded excuses and [will] provide the customer with an opportunity to avoid the dispute altogether," says Peterson.

"Such a provision makes it much easier to identify the cause of the problem before it develops or as it is developing," he adds. "Otherwise, the parties may have to determine causation long after the fact by reviewing hundreds of e-mails, interviewing witnesses and hiring experts."

If the customer really is at fault, the provision will help to alert IT leaders of the internal issue that needs to be corrected.