Services Retainer Agreement (Maximum Plus Additional Hours)
This Services Retainer Agreement (Maximum Plus Additional Hours) is one of several Agreements in this subfolder catering for the situation where a supplier of services provides services to the client under a retainer arrangement. For an explanation and discussion of retainer arrangements generally, please see our Guidance Note: Retainer Arrangements in this subfolder.
This template establishes a retainer arrangement under which the client must pay an agreed retainer fee in advance at stated intervals, e.g. every three months. This gives it the right to order up to a maximum number of hours of work (“basic maximum hours”) to be carried out during the relevant period (e.g. three months). In this particular form of agreement, the retainer fee is not only the consideration payable for that right but is also full payment for all hours of work that the client orders up to the basic maximum. It will receive no rebate if it does not order that maximum in any period.
Unlike the “Payment For Set Number Of Hours” template in this subfolder, in this version, the client is also entitled to order and pay for certain additional hours over and above the basic maximum hours (“additional hours”. Each “additional hour” ordered is chargeable at an agreed hourly rate. The supplier is obliged to provide those additional hours ordered up to a stated limit on the number of hours. The supplier can on any occasion waive that limit under the terms of the agreement. The supplier will need to ensure that it has the capacity to provide up to that limit.
Contrast these arrangements with “call off” arrangements under which the supplier is not bound to accept any order at all that the client places in any period.
If this template does not meet your needs, you might consider whether one of our other templates will better suit your needs.
The retainer fee may be any sum that the supplier considers appropriate, but it will need to be at a level which takes into account the supplier’s commercial, financial and practical needs and circumstances. These may include the fact that, under the arrangement, the supplier will be assured of receiving a guaranteed amount for each period for the basic maximum hours whether or not it ultimately has to provide the basic maximum (or indeed any) hours of work. However, it will need to have the capacity to provide up to the basic maximum hours.
The effective hourly rate for each of the basic maximum hours might be a different rate from the supplier’s rate for additional hours.
The client does not have to order any minimum or fixed number of hours of work in any period. Indeed, it does not have to order any work in any period. Nevertheless, the client will have to pay the retainer fee in full. The client might be content to agree this if it is confident that it will need all of the basic maximum hours (or more) in each period. Even if the client considers that it is unlikely to order as much as the basic maximum, if the amount of the retainer fee represents an attractive hourly rate from the client’s point of view, it might be willing to agree to this retainer arrangement.
This agreement states that the retainer arrangement will continue indefinitely until either party gives notice to terminate after a stated minimum period. It may be adapted so that it instead continues only for an agreed fixed period subject to notice terminating it sooner.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
This Services Retainer Agreement (Maximum Plus Additional Hours) contains the following clauses:
1. Definitions and Interpretation
2. Provision of the Services
3. Ordering Procedure and Other Order Details
4. Client’s Obligations
5. Fees, Payment and Records
6. Liability, Indemnity and Insurance
8. Intellectual Property Rights
10. Force Majeure
11. Term and Termination
12. Effects of Termination
13. Data Protection
14. Data Processing
15. No Waiver
16. Further Assurance
19. Assignment and Sub-Contracting
21. Relationship of the Parties
23. Third Party Rights
25. Entire Agreement
28. Dispute Resolution
29. Law and Jurisdiction
and the following schedules:
SCHEDULE 1: Specification of Services
SCHEDULE 2: Fees and Payment
SCHEDULE 3: Order Form [pro forma]
SCHEDULE 4: Data Processing
This Services Retainer Agreement (Maximum Plus Additional Hours) is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
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