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Professional Services Agreement
Between: Supplier Pty Ltd (ABN 12 345 678 901) and Client Corp Ltd (ABN 98 765 432 109)
Effective Date: 1 January 2026 | Agreement No: PSA-2026-0471
Clause 8.2
Limitation of Liability
"The Supplier's total aggregate liability under or in connection with this Agreement shall not exceed the total fees paid by the Client in the 12-month period immediately preceding the event giving rise to the claim."
✓ Standard limitation of liability — matches firm playbook
Firm Playbook
Position
Liability capped at fees paid in preceding 12 months is our standard accepted position.
Suggested Redline
No changes required. Clause acceptable as drafted.
Clause 12.3
Indemnity
"The Client shall indemnify and keep indemnified the Supplier against any and all claims, losses, damages, costs and expenses (including consequential loss) arising from or in connection with the Client's use of the Services, without limitation."
❌ UNLIMITED indemnity for consequential loss — Our position: cap indemnity at 2x annual fees, exclude consequential loss
Firm Playbook
Position
Indemnities must be capped and mutual. Consequential loss should always be excluded from indemnity scope.
Suggested Redline
Replace "without limitation" with "up to a maximum of 2x the annual fees paid under this Agreement". Delete "(including consequential loss)". Add mutual indemnity obligation.
Clause 15.1
Intellectual Property
"All intellectual property rights in materials created by the Supplier in the course of providing the Services shall vest in the Client upon payment in full."
✓ Standard IP assignment — acceptable
Firm Playbook
Position
IP vesting in Client upon payment is our preferred standard. Consistent with firm playbook.
Suggested Redline
No changes required. Clause acceptable as drafted.
Clause 18.1
IP Assignment
"The Client hereby assigns to the Supplier all rights, title, and interest in any improvements, modifications, or derivative works created using the Supplier's proprietary tools, methodologies, or frameworks."
❌ Reverse IP assignment — Supplier claims IP in client improvements. Our position: delete entirely or limit to Supplier's pre-existing IP
Firm Playbook
Position
Reverse IP assignment is unacceptable. Client must retain ownership of all improvements and derivative works.
Suggested Redline
Delete clause 18.1 entirely. If Supplier insists, limit to: "The Supplier retains all rights in its pre-existing IP, tools, and methodologies. The Client retains all rights in deliverables and derivative works."
Clause 22.4
Termination
"Either party may terminate this Agreement by giving 30 days written notice to the other party."
⚠️ Termination notice 30 days — Below our minimum of 60 days. Recommend: increase to 60 days
Firm Playbook
Position
Minimum termination notice is 60 days for professional services agreements. 30 days is insufficient for transition planning.
Suggested Redline
Replace "30 days" with "60 days". Consider adding transition assistance obligations upon termination.
Risk Summary
Clause Heatmap
High-Risk Items 2
Clause 12.3 — Unlimited Indemnity
CRITICAL: Remove "without limitation" and cap at 2x annual fees. Exclude consequential loss from indemnity scope.
Clause 18.1 — IP Assignment
CRITICAL: Reverse IP assignment gives Supplier ownership of client improvements. Delete or limit to pre-existing IP.
Medium-Risk Items 3
Clause 22.4 — Termination
30-day notice below firm minimum of 60 days. Recommend increasing to 60 days with transition provisions.
Clause 14.2 — Data Retention
No deletion timeline specified. Recommend: add 30-day deletion obligation post-termination.
Clause 19.3 — Jurisdiction
Victorian courts preferred, contract specifies NSW. Recommend: amend to Victoria or agree on mutual jurisdiction.