Signing on the customer’s paper: when to accept, what to change

Why they insist

An enterprise procurement team has a template that its legal department approved, its insurers reviewed and its systems are built around. Using it is not hostility; it is how they buy everything. A vendor that refuses to engage with it is asking the customer to run an exception process, and many will simply pick a competitor who will not.

So the starting position is usually: yes, we will work from your paper. The question is what to change.

First: does the form fit the product?

Most customer templates were written for procuring services or on-premise software. Read the whole thing once asking a single question: does this describe what we actually sell? Common mismatches:

• Delivery and acceptance clauses that assume software is delivered and installed, with acceptance testing before payment. A SaaS product is not delivered; it is accessed. Replace with provisioning and access terms.
• Source code escrow. Meaningless for multi-tenant SaaS. Remove, or replace with data export and transition terms that address the real continuity concern.
• Ownership of deliverables clauses under which the customer owns everything created. Fine for a bespoke development project; catastrophic for a product you sell to everyone. Carve out the platform and anything not uniquely created for them.
• Warranty of conformance to specifications where no specification exists. Replace with a warranty that the service will perform materially in accordance with the documentation.
• Site access, personnel and background check clauses that assume staff on the customer’s premises.

These changes are structural rather than adversarial, and a reasonable customer will accept them quickly once the mismatch is explained. Lead with them.

Second: the money clauses

With the structure fixed, turn to the handful of clauses where the customer’s form allocates risk to the vendor in ways the price does not reflect.

• Liability cap. Customer forms often have no cap on vendor liability, or a cap on the customer’s liability only. Propose a mutual cap at a defensible multiple of fees.
• Indemnities. Narrow a general indemnity to third-party IP claims and, if needed, breach of confidentiality and data obligations.
• Data terms. Ensure your DPA governs data processing rather than a services-era confidentiality clause that does not meet regulatory requirements.
• Termination for convenience. Customer forms frequently allow the customer to terminate at any time on short notice, with a refund. In a committed-term subscription this destroys the economics; negotiate it out or price for it.
• Most-favoured-customer and audit clauses. Resist the first; narrow the second to what a third-party report can satisfy.

Third: leave the rest alone

Their governing law, their notice clause, their boilerplate, their formatting. Every change you request costs a round; every round costs a week. A redline with sixty changes signals to the other side’s lawyer that you have not prioritised, and invites them to fight everything. A redline with twelve changes, each explained in one line, gets accepted.