Commercial Contracts: Seven essentials for bursars, school contract managers and school business managers

This round-up highlights seven essentials to help bursars, school contracts managers and school business managers negotiate, agree, and manage contracts with confidence, with links to further reading. Read on for guidance on:

• Due diligence
• Contract formation
• Indemnities
• Warranties
• Good faith
• Force majeure
• Deeds and witnessing

1. Due diligence checks on counterparties

Trust is important in any commercial relationship, but blind trust can be costly. Schools and academies operate within tight budgets and high-stakes environments, so ensuring suppliers are reliable, solvent, and legally compliant is essential to avoid disruption, reputational damage, or financial loss.

TIP: Before awarding or signing a procurement contract, verify the supplier’s legal status, solvency, track record, and ability to deliver. Checks might include:

• Companies House search (verify the supplier’s legal status, solvency, confirm directors and charges).
• Internet and social media search for their education sector track record.
• Confirm relevant licences/accreditations (e.g. food hygiene, operator licences, DBS policy statements).
• Choose a payment method with control (alignment to milestones, retention, or performance-linked payments).
• “Find case law” search for reported disputes involving the supplier.

Read our article to find out more about the checks you can perform – Six due diligence checks to help verify the credibility of a counterparty.

2. Contract formation over messaging apps

Avoid accidental contracts. Contracts can be unintentionally formed over messaging platforms where the core elements of a contract are present: offer/acceptance, intention, consideration, and certainty.

TIP: Require staff to channel all procurement commitments through approved templates and email purchase orders; state that messaging applications and platforms are not to be used to vary or award contracts.

Read our article – Contract formation: Can WhatsApp messages create a legally binding contract?.

3. Indemnities

An indemnity is a promise to reimburse the other party for a defined loss if a ‘specific event’ occurs (e.g. safeguarding incidents, data breaches, trips/transport, construction/maintenance).

Indemnities are used in commercial contracts to:

• Allocate risk between parties.
• Ensure that liability is assumed by the counterparty who is ‘at fault’.
• Increase the amount recoverable from the party ‘at fault’.
• Simplify the claims process.
• Make it easier and quicker to recover the amounts due.

TIP: Align indemnities to key risks (e.g. safeguarding, data, transport, estates), ensure clear triggers, and match insurance limits to indemnity exposure.

Learn more about drafting and agreeing indemnities here – Indemnities in business-to-business contracts: A Guide.

4. Warranties

Warranties are used to allocate risk and provide assurances about facts or conditions. A warranty is a contractual promise that a statement is true. Note that a breach usually leads to damages, not termination of the contract, unless the contract states otherwise.

TIP: Secure promises on compliance and service levels (such as safeguarding, health and safety, data protection), and timetables critical to delivery (e.g. meals at set times, network uptime service level agreements (SLAs)).

Parties can limit liability for breach of warranty through clear contractual wording, such as time limits or financial caps aligned with the school or academy trust’s risk appetite.

Read more about warranties in our article – Warranties in Commercial Agreements: A Guide.

5. Good faith clauses

In English law, there is no general duty of good faith in commercial contracts unless stated. This means that, unless expressly stated, parties are not automatically required to act honestly or fairly.

However, including a tailored good-faith clause can help ensure both parties cooperate and refrain from undermining the contract’s purpose. These clauses are particularly useful in collaborative, long-term arrangements (such as multi-year catering/cleaning contracts, or multi-academy trust-wide ICT contracts).

TIP: For long-term services, include good-faith wording to support continuity throughout the term. Consider linking good-faith obligations to escalation processes and joint planning meetings in SLAs.

6. Force majeure

Force majeure clauses protect parties from liability when unforeseen events, such as site closures, severe weather, or public emergencies, prevent the performance of contractual obligations.

Force majeure is not implied in a contract; the clause must list the events and set out notice, mitigation, and continuity obligations (e.g. alternative meal provision, remote ICT support) rather than blanket relief.

Note that the 2024 Supreme Court case RTI Ltd v MUR Shipping BV confirmed that an obligation on a party to use their ‘reasonable endeavours’ will not require alternative performance unless the contract says so.

TIP:  Expressly define ‘force majeure’ events, notice and mitigation, and continuity steps.

Read about force majeure clauses here: Force Majeure: A reasonable solution will not trump contractual performance.

7. Signing a contract – witnessing a deed

Some agreements must be executed as deeds and require proper execution and witnessing. Regardless of whether the deed is to be signed on paper or electronically, a witness must:

• not be a party to the contract and should be independent and aged 18 or over 18.
• be unconnected to the parties and ideally not a family member or someone with a financial interest in the contract.

For documents requiring board or governing body approval, consider scheduling formal meetings in advance to pass necessary resolutions. Ensure that minutes are recorded and that any delegated authority to sign is clearly documented.

TIP: Where a deed is required, execute and witness correctly; use independent witnesses and follow your scheme of delegation.

Read more in Witnessing a deed: You’ve got to see it to believe it.

Even without an express clause, courts may imply a duty of good faith in certain relationships, especially where trust and cooperation are essential.

Find out more: FAQ on good-faith clauses in commercial contracts.

Conclusion

Before signing a contract: check the counterparty, control informal communications, align indemnities and warranties to service delivery, include suitable good faith and escalation wording, tailor force majeure to continuity of provision, and execute correctly (including deeds).

For help updating your contract templates or drafting/negotiating supplier terms and agreements, please contact our Corporate and Commercial team.