This clause creates a formal committee with representatives from both parties who meet regularly (usually monthly or quarterly) to oversee the contract and make decisions together. It matters legally because it establishes a clear chain of command and decision-making process—if the committee approves something, both parties are bound by it. The clause typically specifies who sits on the committee, how often it meets, and what decisions it can make (some decisions might need higher approval). This prevents confusion about who has authority to make changes or solve problems. In English law, this creates what's called "mutual agency"—each party's committee member can bind their organization.
Define exactly which decisions the committee can make and which must go to senior management for approval (budget changes, contract extensions, major scope changes). Specify that decisions require agreement from both sides, not just a majority vote—you don't want to be outvoted. Ensure your organization has the right to replace its committee member if they leave, and require written minutes within 5 business days so there's no dispute about what was decided. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause creates a formal committee with representatives from both parties who meet regularly (usually monthly or quarterly) to oversee the contract and make decisions together.
Why should I care about this clause?
It matters legally because it establishes a clear chain of command and decision-making process—if the committee approves something, both parties are bound by it.
What are my options?
The clause typically specifies who sits on the committee, how often it meets, and what decisions it can make (some decisions might need higher approval).
How does this affect small businesses?
This prevents confusion about who has authority to make changes or solve problems.