Vendor Contract Analysis

19 Nov

For an assignment, we were given the task of finding a vendor agreement and analyzing the document. We were to find the five most important/interesting aspects of the contract, and explain them in detail.

I analysed a vendor agreement between RIM (blackberry) and potential vendors who are selling apps in the RIM app store (known as Blackberry app world). As expected, the contract was very detailed, with many different aspects of it that potential vendors need to be aware of. Below are the five sections I found the most important/interesting:

4.6 Geographic Restrictions

The clause outlines to APP developers that RIME is a global business, and that entering an agreement with RIME requires the APP developer/distributor to have proper licensing of the APP throughout the world.

9.3 Reverse Engineering

RIME is not allowed to modify an application without written consent from the Vendor, and may not reverse engineer, disassemble, or decompile any Application per the vendor agreement. This portion of the contract protects the vendor when entering a vendor agreement with RIME. It is a very important portion of the contract with RIME as it shows vendors that the APPs they have worked hard on will be safe when entering business with RIME. It is also importing for RIME to include a reverse engineering clause in their vendor contracts to attract app vendors into conducting business with RIME.

4.5 Vendor Fulfillment

Clause 4.5 is an important part of the RIME vendor agreement, especially for the vendor, as they must fulfill all promises and expectations made to end users of the APP. A vendor cannot sell services and then not deliver on them. RIME also wants to maintain their own reputation, and do not want vendors treating customers poorly. RIME can terminate the agreement immediately for such a breach.

5 . Secondary Revenue Fee

Clause 5, covering several aspects of the secondary revenue fee, is a crucial portion of the RIME vendor agreement. Per the first section of the clause, vendors must pay RIME 30% of secondary revenue collected through APPs, on a quarterly basis. Vendors are also required to provide a month by month breakdown of secondary revenue collected and paid. A related section on taxes on the payments is included later on in the agreement. The clause is vitally important in

the vendor agreement for RIME, as it is how they will make profit by allowing APPs in their APP distribution and selling platform.

16 Term, Termination

The term/termination portion of the vendor agreement with RIME covers the protocol involved with ending the agreement between the vendor and RIME. The termination clause outlines exactly what notice the vendor has to give RIME in the event of termination, and what notice RIME has to give to the vendor when the agreement is terminated. RIME can terminate the agreement for convenience with the vendor by providing at least 90 days written notice to the vendor. If a breach of conditions has occurred, RIME only has to provide 30 days written notice of termination of the agreement, if the breach cannot be corrected.

 

My analysis of the contract proves why a company would hire me. Any company would expect a marketing professional to be capable of analysing such contracts, and understanding every detail. Thoroughness is very important in vendor contracts, as failure to understand the contract can result in a breach, which could easily result in the contract being terminated, and time and money being loss.

I have attached a copy of my full report for your interest.

Gamache, Mark Contract Analysis (1)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: