The fee has been agreed, the client is ready to proceed, and the contract arrives for signature. Attention naturally turns to whether the document reflects the price and services discussed. Yet provisions elsewhere in the agreement may materially change the financial return.

A profitable proposal can become an expensive commitment if payment depends on an open-ended approval process, additional work carries no additional fee, or the client can leave before the supplier recovers its initial investment. Reading the contract alongside the delivery budget and cash forecast brings these risks into focus.

For companies in Bulgaria working with international customers, that review deserves particular care. A software business in Sofia or a consultancy in Varna may be asked to accept a customer’s standard agreement. Terms routinely used by the customer may still be poorly suited to the supplier’s operations.

Payment terms begin before the invoice

“Payment within 30 days” appears straightforward. First, establish what starts that period. If payment depends on formal acceptance of the work, the acceptance procedure directly affects how long the supplier must finance delivery.

Look for objective acceptance criteria, a defined review period and a process for identifying and correcting defects. Establish what happens if the customer does not respond or disputes only part of the work. Any provision treating silence as acceptance needs careful drafting and review under the applicable law. The payment arrangements must also respect applicable invoicing requirements.

Consider an illustrative €30,000 project with €21,000 in direct delivery costs and no advance payment. The expected contribution before overheads and tax is €9,000. If those costs are paid before the customer settles, the supplier must fund €21,000 in the meantime. An additional month awaiting approval extends that period even if payment is subsequently made within the agreed deadline. Before any additional financing costs, the expected contribution remains €9,000; the supplier’s cash is committed for longer.

Where applicable, late-payment rules provide rights to interest and compensation for recovery costs. The European Union’s guidance on B2B late payments explains those rights and their conditions. These remedies do not remove the immediate funding need: the supplier may still have to pay staff and subcontractors while pursuing collection.

A fixed price needs a defined scope

A fixed fee works best when both parties can identify what it covers. Phrases such as “all necessary support” or “revisions as required” make it harder for the delivery team to establish when a request falls outside the agreed scope.

Define the deliverables, exclusions, revision limits and customer inputs on which the timetable depends. Agree who can authorise changes and how additional fees and revised deadlines will be approved. The procedure must be practical for the people managing the assignment. If every minor request requires lengthy approval, work may continue before anyone agrees its cost.

In the example above, an additional €6,000 in delivery costs, incurred without an increase in the fee, would reduce the expected contribution from €9,000 to €3,000. The company could complete the project successfully and still earn far less than planned. A clear change procedure protects the supplier’s margin and gives the customer a basis for deciding whether the extra work is worth commissioning.

The cost of an early exit

A twelve-month agreement does not necessarily provide twelve months of committed revenue. The customer may have a right to terminate for convenience, meaning without having to establish a breach, on short notice. That matters if the supplier hires staff, reserves capacity or purchases annual licences to deliver the service.

Separate the costs that cease on termination from those that remain. Check how the agreement treats completed work, work in progress, approved expenses and commitments that cannot reasonably be cancelled. Consider whether an onboarding fee, minimum commitment or proportionate termination payment is commercially justified and legally supportable.

Assess the notice period against the time needed to redeploy resources. Thirty days may be workable for a flexible service and inadequate for a dedicated team. Check renewal provisions too: missing a notice deadline can leave the business paying for services it no longer needs.

Exclusivity has an opportunity cost

Exclusivity can be reasonable when a customer pays for dedicated capacity or commits to a meaningful volume of purchases. The commercial risk is greater when the restriction is broad but the customer has no corresponding obligation to place orders.

Define the activities, customers, territory and duration covered. Examine whether the wording could prevent the supplier from serving existing clients or taking unrelated work. Then compare the expected return with the opportunities being surrendered. A forecast of future orders provides less protection than an enforceable minimum purchase obligation.

Establish what the business receives in exchange for the restriction. A narrower scope, a shorter term or a right to end exclusivity if agreed purchase volumes are not met may produce a more workable arrangement. Exclusivity and non-compete provisions also require legal review, including consideration of applicable competition law.

Read the liability cap together with its exceptions

A liability cap needs to be read with the provisions that define its scope. A limit tied to annual fees may appear proportionate, while indemnities or exceptions for particular types of claim leave substantial exposure outside it. Check whether the cap applies to all claims in aggregate or separately to each claim, and how the relevant fee period is calculated.

Compare the potential financial exposure with the contract’s expected return and the company’s ability to absorb a loss. Pay particular attention to obligations that depend on matters outside the supplier’s control, such as the accuracy of customer-provided data, the availability of third-party systems or timely customer instructions.

Insurance must be checked against the actual obligations accepted. A policy limit does not establish that a particular contractual indemnity is covered. Ask the broker or insurer about exclusions and contractual liabilities before relying on the policy in negotiations. The meaning and enforceability of limitations and indemnities depend on the wording and applicable law.

Ownership rights and the practical cost of enforcement

For businesses producing software, designs, reports or other intellectual property, specify what the customer will own or be licensed to use. Distinguish project-specific deliverables from pre-existing tools, templates and methods. Broad assignment wording may limit the supplier’s ability to reuse its own materials on future projects. Third-party materials may carry separate licence conditions.

Cross-border agreements also require attention to governing law and dispute resolution. The language of the document does not, by itself, determine the law governing it. The chosen law and the court or arbitral forum are separate matters, and both need to be understood before signature.

Assess the practical cost of pursuing a claim in the agreed forum, including legal representation, translation and enforcement where the counterparty has assets. A contractual right to payment may offer limited commercial protection if recovery costs are disproportionate to the amount owed. These provisions warrant advice from counsel familiar with the relevant jurisdictions, particularly when using a foreign-law template.

Assess the agreement as a whole

Before signing, record the commercial effect of the material terms: the expected margin, cash required before collection, costs that remain after termination, restrictions on future business and potential liabilities the company would have to meet. Confirm the contracting entity’s identity and the signatory’s authority. Review the schedules and any documents incorporated by reference as carefully as the main agreement.

Test the contract against realistic events: acceptance is delayed, the customer requests extra work, or the relationship ends earlier than expected. This helps identify the provisions worth negotiating and the risks the business is prepared to accept at the agreed price.

For me, a contract review is complete only when the legal terms have been assessed against how the business will deliver the work. Legal counsel and management need to consider the commitments together, including their cost and funding requirements. The decision to sign should reflect a return that justifies the risks the company is accepting.

This article addresses commercial considerations in business-to-business contracts. The legal effect of individual provisions depends on the applicable law and the specific agreement.