Last week I received the following inquiry from a reader:
I have a frustrating drafting challenge (possible blog topic?) that I suspect beleaguers many in-house counsel who are trying to streamline contracting processes—using a service provider’s proposal to define the scope of work without bringing in the “general” terms and conditions that accompany it. I will not deny that this is an awful way to handle contracting, but the realities of high contract volume, relatively small dollar impact, and limited legal resources preclude a better approach. The classic “to the extent terms conflict, owner’s contract governs” type of provision is defective in my view because the service provider’s proposal may introduce new concepts not directly addressed in the owner’s contract (e.g. adding a limitation of liability). It is, of course, impossible to anticipate every possible inclusion. I’m curious whether you have any words of wisdom for those of us trying to craft a solution that at least provides a modicum of comfort to us lawyer-types!
Below is a weak attempt to draft something (apologies—I just can’t bring myself to use lower-case for “this agreement”):
The Service Provider agrees to perform the services described in the proposal or the scope of work attached as Exhibit A (the “Services”). If the Service Provider’s proposal is attached as Exhibit A, any terms and conditions not specifically defining the scope of the Services to be performed shall be deemed in conflict with this Agreement, whether such terms and conditions directly conflict with this Agreement, or contain representations, warranties, or covenants not directly addressed in this Agreement, and shall not constitute part of this Agreement.
Any thoughts would be appreciated!
I threw together and sent to this reader my preliminary take on this kind of provision:
The Service Provider shall perform the services described in the proposal or scope of work attached as exhibit A (the “Services”). Anything in exhibit A other than a description of the Services does not constitute part of this agreement, regardless of whether it is in conflict with this agreement.
If you’re familiar with this issue, I’d be interest to hear how you handle it.
I’d be afraid that a court would respond that the terms and conditions in the statement of work were a specific agreement that took precedence over the general terms and conditions in the standard form contract. (I remember a rule from 1L Contracts that the order of precedence is: Printed forms have the lowest precedence, then typed provisions, then handwritten provisions.)
I will usually specifically address, by paragraph number (if numbered) or otherwise, the service provider proposal terms. So in the happy case when a provider gives us a proposal where the work description is well separated, I will force our services agreement on them, append the proposal as a SOW and then add a paragraph saying (paraphrasing here) “Sections 1, 3 and 5 of the SOW are incorporated by reference herein. Sections 2, 4, and 6 through 12 of the SOW are not incorporated, are void and of no force or effect.” Or something like that. This is a little heavier workload, though, as it requires some deep analysis of the t’s and c’s, and so you don’t quite get the nice, time-saving “one fell swoop” approach of the language Ken proposes. If you were willing to take the risk DC notes, Ken’s approach is a good one, but I am too picky and will try to deal with each item — for clarity, albeit at the cost of more valuable time spent on some crummy $50k services agreement.