Four contract checks worth making this August

The quieter days of August are often a useful time to pause and look at the contracts that sit behind the day-to-day running of a business. They’re not always front of mind when everything is working well, but they become very important when costs change, technology moves on, service levels slip or a relationship needs to end.

I’ve seen this many times over the years: the clause everyone skips over at the start is often the one everyone comes back to when the relationship is under pressure.

One memorable case arose even though everyone went into the arrangement with good intentions. The commercial relationship was positive, the teams knew each other and the contract hadn’t felt controversial at the time. The problem only came later, when one business wanted to change how the service was delivered and the other side saw that change as something extra.

Suddenly, the short wording on approvals, changes and payment became the centre of the discussion. No one had been trying to be difficult and no one had set out to create a problem. The contract simply hadn’t said enough about what would happen if the day-to-day reality moved on. That kind of issue is often avoidable with a clearer conversation at the start.

With that in mind, here are four areas worth checking now. Not because businesses should be alarmed, but because a little clarity at the start can save a lot of time later.

1. AI agents: what if your business tool goes too far?

AI is moving very quickly from being a tool that helps people work to a tool that can proactively take steps for the business. That might mean browsing third-party websites, using supplier portals, accepting online terms, reusing information, placing orders, processing refunds, sending messages to customers or triggering internal processes.

Recent reports of AI agents escaping test environments and accessing third-party systems should make businesses pause. If an AI tool used by a business accesses information it shouldn’t, the question isn’t just whether the tool behaved unexpectedly. The harder question is who carries responsibility if that information is confidential, commercially sensitive or protected as a trade secret.

AI tools can be useful, but they need clear boundaries. If an AI tool accepts terms, uses content it shouldn’t use, makes a promise to a customer, applies a refund incorrectly or simply goes further than intended, the business may need to deal with several issues at once. If the tool is acting for the business, the business needs to be clear about what it’s allowed to do.

Contract point: check the AI supplier terms, what the tool is allowed to do, where human approval is needed, which systems or data it must not access, what records are kept and who is responsible if something goes wrong. That should include unauthorised access to confidential information, commercially sensitive data or trade secrets, as well as any loss caused by the tool acting outside its intended scope.

A helpful test is this: can the business explain, in plain English, what the tool can do, who supervises it, what information it’s prohibited from accessing and what happens if it makes a mistake?

2. Public procurement: more transparency, more performance scrutiny

For businesses that bid for public-sector work, the direction of travel is clear: more openness, more focus on delivery and more attention to what happens after the contract is signed.

That means bid promises need to be realistic and properly joined up with the people who will deliver them. Payment, reporting, social value, subcontractors and performance measures shouldn’t sit in separate boxes. They all need to work together.

Contract point: before signing, check that the contract matches what the business can actually deliver. Pay particular attention to subcontractor obligations, reporting, payment, performance standards, step-in rights, termination and how issues will be escalated if something starts to drift.

3. Supplier agreements: standard terms still deserve a proper look

Supplier terms are easy to accept when the value is modest, the relationship feels straightforward or the team just wants to get moving. That’s completely understandable. The difficulty is that those terms can matter a great deal if costs rise, services slip or either side wants to walk away.

It’s often the familiar clauses that do the heavy lifting: payment dates, liability limits, indemnities, price-change wording, service levels and termination rights. A quick review can show whether the deal still reflects the commercial reality.

Contract point: look at supplier terms as a whole, not clause by clause in isolation. Payment, service levels, remedies, liability, insurance, data, intellectual property, termination and exit support should all fit together. If the business has grown or the relationship has changed, the standard terms may need to change too.

4. Clear drafting: say what you mean before it matters

Many contract disputes start with wording that could have been clearer: a definition doesn’t quite match the clause; a schedule says something different from the main terms; a liability cap doesn’t apply in the way people expected; a renewal clause leaves too much room for argument.

Sometimes those points can be sorted out. Sometimes they become expensive and distracting. Either way, it’s usually better to fix the wording while everyone is still aligned and the relationship is working well.

Contract point: check that the definitions, main terms and schedules all say the same thing. Make sure the contract is clear on price, payment, renewal, cancellation, changes, liability and exit. Clear wording isn’t just tidier; it’s easier to work with.

What should businesses do now?

The point isn’t to worry about every possible contract risk; it’s to know where the important ones sit. In most contracts, a small number of clauses will decide the answer when something changes: who had authority, when payment is due, who carries the loss, how changes are agreed and how the parties can bring things to an end if needed.

Practical next steps:

• Pick out the contracts that matter most to the business
• Check the clauses on authority, payment, liability, changes and exit
• Make sure AI tools and automated processes are covered by clear permissions and controls
• Check that bid promises, framework terms and subcontractor obligations all line up
• Refresh standard terms if the business or the risk has moved on.