Subcontracting Clause (Outsourcing)

Summary

This clause is a subcontracting that allows the supplier in an outsourcing agreement to delegate or subcontract its obligations only upon written approval and consent of the customer. Subcontracting can be to the customer's advantage by enabling access to specialist resources or services which the supplier would not be in a position to provide itself. It may also result in more competitive pricing. This clause includes practical guidance and drafting notes. Most major outsourcing deals will involve the supplier providing part of the services through third parties under subcontracts. Although this arrangement can be advantageous to the customer, the main downside is the increase in risk that comes from indirectly engaging a third party which may not have been subject to the same level of due diligence or scrutiny as the supplier during the tender process. The customer is likely to have little or no contact with the subcontractor, even in the early stages of the negotiation of the deal, ...