Preferred Contractor Agreement

Preferred Contractor Agreement for the United Kingdom

Preferred Contractor Agreement Template for England and Wales

A Preferred Contractor Agreement under English and Welsh law establishes a framework relationship between a client organization and a contractor, granting the contractor preferred status for specified services. The agreement sets out preferential terms, pricing structures, and service standards while maintaining compliance with UK legislation including employment law, health and safety regulations, and data protection requirements. It typically includes provisions for work allocation, performance metrics, and quality standards.

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What is a Preferred Contractor Agreement?

The Preferred Contractor Agreement is designed for organizations seeking to establish long-term, preferential relationships with trusted service providers. This contract type, governed by English and Welsh law, provides a framework for ongoing service delivery while offering the contractor preferential status for specific work types. It includes essential terms covering scope, pricing, performance standards, and regulatory compliance, while maintaining flexibility for project-specific requirements. The agreement is particularly valuable for organizations requiring regular access to reliable, pre-approved contractors with established terms and conditions.

What sections should be included in a Preferred Contractor Agreement?

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the preferred contractor arrangement

3. Definitions: Key terms used throughout the agreement

4. Appointment and Scope: Terms of appointment and scope of services

5. Term and Renewal: Duration of the agreement and renewal provisions

6. Pricing and Payment Terms: Fee structure, payment schedule, and invoicing requirements

7. Obligations of the Parties: Key responsibilities and duties of both parties

8. Insurance Requirements: Mandatory insurance coverage and limits

9. Termination: Conditions and process for ending the agreement

10. Governing Law: Jurisdiction and applicable law

What sections are optional to include in a Preferred Contractor Agreement?

1. Performance Metrics: KPIs and performance measurement criteria for monitoring specific performance standards

2. Exclusivity Provisions: Terms regarding exclusive rights or restrictions when granting exclusive contractor status

3. Subcontracting: Rules and conditions for subcontracting work when delegation might be required

4. Change Control: Process for managing changes to services or terms in complex arrangements

5. Data Protection: GDPR and data handling requirements when personal data processing is involved

What schedules should be included in a Preferred Contractor Agreement?

1. Schedule of Services: Detailed description of services to be provided

2. Rate Card: Detailed pricing structure and rates

3. KPI Schedule: Detailed performance metrics and measurement criteria

4. Insurance Schedule: Detailed insurance requirements and coverage limits

5. Form of Work Order: Template for individual work orders under the agreement

6. Service Levels: Detailed service level requirements and remedies

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok��˰� | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Cost

Free to use

Relevant legal definitions

Clauses

Relevant Industries

Construction
IT Services
Professional Services
Facilities Management
Engineering

Relevant Teams

Procurement
Legal
Operations
Finance
Commercial

Relevant Roles

Procurement Manager
Commercial Director
Operations Manager
Project Manager
Legal Counsel

Industries

Supply of Goods and Services Act 1982: Primary legislation governing contracts for the supply of goods and services in England and Wales, establishing implied terms and contractual obligations

Contracts (Rights of Third Parties) Act 1999: Legislation governing how third parties may enforce terms of a contract to which they are not a direct party

Late Payment of Commercial Debts (Interest) Act 1998: Legislation providing for statutory interest on late payments in commercial transactions

Consumer Rights Act 2015: Legislation protecting consumer rights in B2C relationships, may be relevant if contractors deal with consumers

Employment Rights Act 1996: Key employment legislation to consider for proper differentiation between contractors and employees

IR35 Legislation: Off-payroll working rules determining tax status of contractors and preventing disguised employment

Agency Workers Regulations 2010: Regulations governing rights of agency workers and temporary contractors

Health and Safety at Work Act 1974: Primary legislation for workplace health and safety obligations and responsibilities

Construction (Design and Management) Regulations 2015: Specific regulations for construction projects, relevant if contract involves construction work

UK GDPR: Data protection regulation governing the processing of personal data in the UK post-Brexit

Data Protection Act 2018: UK's implementation of data protection standards, working alongside UK GDPR

Bribery Act 2010: Anti-corruption legislation affecting commercial relationships and requiring adequate procedures

Competition Act 1998: Legislation prohibiting anti-competitive behavior and agreements

Enterprise Act 2002: Legislation dealing with competition law and market regulation

Employers' Liability (Compulsory Insurance) Act 1969: Legislation requiring employers to maintain insurance for employee injuries/illnesses

Common Law - Contract Formation: Legal principles governing offer, acceptance, consideration, and intention to create legal relations

Common Law - Breach and Remedies: Legal principles governing contract breaches, damages, and remedies available to parties

Common Law - Limitation of Liability: Legal principles governing the extent to which parties can limit their liability in contracts

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Download a Standard Template

What is a Preferred Contractor Agreement?

What sections should be included in a Preferred Contractor Agreement?

What sections are optional to include in a Preferred Contractor Agreement?

What schedules should be included in a Preferred Contractor Agreement?

Authors

Alex Denne

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