Contracts/Lawyer Guys - Looking for language re: rebates/margins (1 Viewer)

[Baloney Sandwich]

I'm not sure anyone here can help but figured I would throw it out there. I work for a professional services firm and one of our large clients is asking us to put together a volume rebate proposal for next year. We are only in the proposal stage but I fear we will receive rate pressure next year in additional to whatever volume rebate we put together. We don't mind providing a volume rebate but based on the assumption that our margins stay consistent. We will not share with them our current, past or future margins but I'm wondering how to best articulate that our volume discounts are contingent on our margins remaining the same. Perhaps it is as simple as just stating that in our assumptions but thought there might be someone on here with additional thoughts of value.

TIA

 

[Psychopav]

If you aren't willing to explicitly break out margins, I suggest you identify the most important factors which influence them. So (not knowing what business you're in) you might tie your contingency to things such as interest rate changes, changes in costs of goods and services as measured by a consumer prices index, demographic changes, volume changes, etc. Set a threshold for change in your most impact variables and deserve the right to rerate your services if any one variable changes beyond the threshold you set.

 

[Psychopav]

Hello typos! Sorry about that! You get the idea...

 

[Aerial Assault]

Psychopav's post was awesome. CPI-chained costs and interest rates as variables have been a feature of any agreement in this area I've seen (which is only 5-7 or less). But, Baloney: a lawyer has to draft something like this for you or review your proposed lingo. Way too important not to have a lawyer look over it IMO.