ERP Contract Checklist
The ERP contract codifies the commercial and operational relationship between buyer and vendor for 5-15 years. Like any complex software contract, vendor templates favour the vendor; pushing back on specific clauses is standard practice for serious enterprise and mid-market buyers. This checklist covers the contract clauses that recurringly matter most in DACH ERP procurement — what to look for, what to push on, where vendors are typically flexible versus rigid.
Licence and subscription terms
- User-licence definitions — full users versus team members versus self-service users; concurrent versus named users; counting method for usage-based billing
- Module bundling — what is included, what is extra cost; bundling discounts versus ala-carte pricing
- Subscription escalators — annual price increases (typical 3-5%); cap on escalators; tied to specific indices (CPI, EU inflation)
- Volume tiers — pricing breakpoints as user count grows; ability to add and remove users without contract renegotiation
- Co-terming — aligning addon products and renewal dates to one contract anniversary
SLA and support terms
- Availability commitment — minimum 99.5%, target 99.9% for mid-market production ERP; verify exclusions (planned maintenance, force majeure, customer-caused)
- Support response times — by severity (P1-P4); negotiate tighter P1 commitments if production-critical
- Resolution targets — how fast issues are resolved or mitigated; financial credits if missed
- Service credits — cap and escalation; typical 5-25% of monthly fee
- Maintenance window scheduling — customer-friendly hours; advance notice requirements
- Patch and upgrade timing — customer-side control over major upgrades (especially cloud); ability to defer disruptive updates
Intellectual property and data
- Customer-data ownership — the customer should own all data they put into the ERP; vendor has limited rights to process for service delivery
- Vendor IP protection — vendor retains rights to underlying software; customer licensed to use, not own
- Customisation IP — who owns customer-funded customisations: customer-owned (strong), shared (typical), vendor-owned (weak for customer)
- Data Processing Agreement (see DPA) — GDPR Article 28 requirements covered comprehensively
- Indemnification — vendor indemnifies customer against third-party IP claims on the ERP; mutual indemnification on customer data
- Confidentiality — symmetric obligations protecting both parties' confidential information
Exit and termination
- Termination rights — specific events allowing termination (material breach, vendor insolvency, security incidents); cure periods
- Data extraction — vendor obligation to provide customer's data in usable format at exit; format specifications (CSV, JSON, database dump); reasonable timeframe
- Transition support — vendor cooperation during migration to successor system; pricing for transition services
- Wind-down period — reduced-functionality access for legal-retention purposes after termination
- Source-code escrow (on-premises only) — protection against vendor insolvency
- No early-termination fees if vendor breaches; pro-rata refund for unused subscription period
Audit and compliance
- Customer audit rights — right to verify vendor's compliance with contract; reasonable notice and frequency limits
- Vendor audit rights — vendor's right to verify licence compliance; limited to reasonable scope and frequency
- Compliance attestations — ISO 27001, SOC 2, GoBD attestation, industry-specific certifications maintained over the term
- Sub-processor management — list maintained, change notification, objection rights
- Breach notification — vendor notifies customer within tight time windows (24-72 hours) for security incidents
Related Topics
Frequently Asked Questions
How much can we negotiate on standard cloud-ERP contracts?
SMB contracts: very little. Mid-market: meaningful negotiation possible on commercial terms, support tiers, and specific high-risk clauses. Enterprise: substantial negotiation. The negotiation leverage scales with deal size and the vendor's strategic interest in the customer. Working with specialist ERP contract lawyers pays off above 500,000 EUR total contract value.
What about price-escalator clauses?
Annual escalators of 3-5% are standard; tied to EU CPI or similar inflation index is reasonable. Watch for: uncapped escalators (vendor can raise prices arbitrarily), unilateral price changes without warning, escalators applied to historical pricing rather than current. Cap negotiation: 3-5% per year hard cap is a common middle ground.
Is source-code escrow worth pursuing?
For on-premises ERP from smaller vendors: yes, as protection against vendor insolvency. For cloud ERP and major vendors (SAP, Microsoft, Oracle, NetSuite): rarely worth the effort; vendor stability is high and the cloud-deployment model makes escrow less useful operationally. Mid-market on-premises from specialist vendors is the typical escrow use case.