Some contracts are profitable, and some are not - and hindsight is a perfect science.
If you knew what you know now, you may have thought twice before entering into those unprofitable contracts. However, do not assume that all is lost even after you have signed the contract. We have recently helped a number of clients to get key contracts back on track, saving large sums of money on unprofitable contracts.
You may already have done some of these things but it is certainly worth:
- Identifying the profitable contracts from those that are not;
- Prioritising the high value, unprofitable contracts or those large contracts where the profit margin is lower than you expect;
- Reviewing those contracts to see whether you can:
- Further improve your performance;
- Help the other party improve its performance if it’s impacting on your profitability; and
- See whether you can re-negotiate.
- Obtaining a legal review of key contracts to establish:
- Whether you can terminate the contract early;
- If you can terminate early, how much will it cost and what are the legal arguments you can use to reduce the costs; and
- What legal arguments can help in any re-negotiation.
In terms of the money you could potentially save, the cost of reviewing key contracts is minimal.
To discuss the options available to you on a contract, please contact Justin Byrne, a Consultant with over 20 years’ experience of advising on contract issues.
