This article is for startup founders, business owners, and procurement managers in Ireland who need to review or negotiate contracts with suppliers and vendors.
If you're unsure what terms to push back on, what's actually negotiable, or which clauses could create serious problems for your business, this guide covers payment terms, liability caps, termination rights, IP ownership, SLAs, and the hidden traps in standard supplier contracts.
Key Takeaways
• Negotiate longer payment terms (Net 60/90) and withhold rights for defective goods to preserve cash flow and leverage.
• Liability caps often limit supplier responsibility to monthly fees, leaving you exposed for losses from critical service failures.
• Secure explicit IP ownership clauses in contracts, as Irish law grants ownership to creators by default, not buyers.
• Set calendar reminders 90+ days before auto-renewal deadlines to avoid being locked into unwanted multi-year contract extensions.
• Ensure supplier IP indemnity covers defense costs and third-party infringement claims without being subject to low liability caps.
Why should I review supplier contracts instead of just signing them?
Standard supplier contracts are drafted to favor the supplier's interests, minimizing their risk while maximizing their flexibility. Without careful review, you may agree to unfavorable terms that create significant business problems—like a software startup that signed a cloud hosting contract with a €500 liability cap, only to lose €50,000 in revenue from a three-day outage caused by the supplier's error.
Should I negotiate for Net 30, Net 60, or Net 90 payment terms?
Push for the longest payment terms possible (Net 90 is best) to preserve your cash flow, which is particularly important for early-stage companies managing limited resources. Longer payment terms give you time to verify quality before payment and help preserve working capital, while immediate payment eliminates your leverage if problems arise.
What's the difference between liability capped at contract value versus monthly fees?
Liability capped at contract value limits what the supplier must pay to the total fees you've paid under the entire contract, while capping at monthly fees limits it to just one month's payment. The monthly fee cap heavily favors suppliers and creates significant risk for you—if you pay €500/month but suffer €50,000 in losses from their mistake, you'd only recover €500 under a monthly cap.
Can I terminate a supplier contract if I'm just unhappy with their service?
Only if your contract includes a "termination for convenience" clause that allows you to end the agreement without cause, typically with 30-90 days notice. Without this clause, you can only terminate "for cause" when the supplier commits a material breach, so it's essential to negotiate for convenience termination rights to maintain flexibility as your business needs change.
Who owns the software or designs my supplier creates for me?
Under Irish law, the creator owns intellectual property by default unless the contract explicitly states otherwise. If you want to own the work, you must negotiate a "work made for hire" clause where you own all IP created under the contract, or at minimum, ensure you receive a perpetual, exclusive license to use the deliverables.
What happens if my supplier misses their SLA commitments?
Most SLA remedies provide service credits (partial refunds) when performance standards aren't met, but these are often capped at small amounts like 10-25% of monthly fees that may not meaningfully compensate for your actual losses. Better contracts also include termination rights if SLAs are consistently missed over multiple consecutive periods, giving you an escape from underperforming relationships.
Do I need to worry about auto-renewal clauses in supplier contracts?
Yes—auto-renewal clauses can trap you in unwanted relationships by automatically extending your contract for another full term unless you provide notice during a specific opt-out window, often 30-90 days (sometimes 6+ months) before renewal. Calendar renewal dates carefully and set reminders well before opt-out deadlines, or better yet, negotiate against auto-renewal entirely or demand shorter renewal terms than the initial term.
What's an IP indemnity and why do I need it?
An IP indemnity requires your supplier to compensate you if their goods or services infringe on third-party patents, trademarks, or copyrights, protecting you from legal claims and covering both defense costs and damages. This is essential protection for technology products and should survive contract termination, but verify it isn't subject to low liability caps that would undermine its value.
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