Contractual considerations for schools and academy trusts

Highlighting some key considerations and common pitfalls to be aware of before entering into contracts on behalf of schools and academy trusts.

Why might a school/academy trust want to consider external advice before entering into a contract with a third party?

Contracts come in many shapes and sizes and can cover varied subjects, including matters such as sponsorship, advertising, coaching, marketing, uniform production, venue hiring, construction etc.

We often advise clients on the issues they face with historic contracts, sometimes as a result of those contracts not having been fully reviewed when they were initially signed, or the fine print was hidden away or an onerous or tricky condition wasn't spotted.

In many cases you may be presented with a contract from a third-party supplier (of goods or services) and be told that the document is in a standard form and is not open to negotiation.  This can sometimes be true but is often a negotiating tactic to ensure that the terms and conditions governing the contract will be those of the third party, and which are much more likely to be friendly to the supplier rather than balanced.

It is important for those working on behalf of schools and academy trusts to recognise the situations in which those supplier friendly terms and conditions may not be suitable, so that a more balanced position can be agreed.  In some cases this can be handled internally but for contracts of a particular importance, or of a high value, it is advisable to take professional advice to ensure you do not end up out of pocket or burdened with a long, and expensive, contractual relationship.

Key terms and pitfalls

Key terms for which you should be on the lookout, or the pitfalls to avoid, include:

1. When can you walk away? Termination provisions are a very important part of the contract to get correct at the outset.  Supplier standard terms and conditions will often include very long notice periods, automatic extension and rollover of the contract term and limited to no ability to terminate for convenience (where the supplier hasn't breached the terms of the agreement).  In such cases you should ensure that the notice periods are diarised so that if you do want to terminate the contract, you do so in sufficient time to avoid it rolling over for a further period (usually another year) where you would be contractually obligated to continue paying.

2. What controls are there on the price?  Price increases are always going to be included in any contract which will be ongoing for a long period (over a year as the price usually increases on the anniversary of the contract).  The price rise will usually be automatic at either a fixed rate, linked to a reference rate (RPI, CPI etc.) or sometimes at the suppliers discretion based on their calculation of their cost of doing business (to be avoided).  In some contracts the price adjustment will need to be agreed between the parties.  You should ensure you are aware of what the price increase provisions say, so that you can budget accordingly, but it is always valuable to try and negotiate in a termination provision which allows you to walk away if the price increase is not to your liking.

3. Where are the T&Cs? Are the terms and conditions set out in the contract itself, or are they incorporated by reference to some standard T&Cs which are available online or elsewhere.  You should ensure you know where and what these are.

4. Academy Trust Handbook: For academy trusts you will need to be aware of the requirements of the Academy Trust Handbook and ensure that any contracts are entered into in compliance with this.  Section 5 of the Handbook covers delegated authorities which includes entry into a number of transactions which would be governed by a contract.  You should take specialist advice if you consider this is relevant, but in particular we would flag the following sections (from the Handbook in force as at February 2025):

1. 5.6 – where the contract relates to a novel/new, contentious or repercussive transaction you will need to seek approval before the contract is signed;

2. 5.19 – certain financial transactions will require approval, and these include entering into indemnities which are not in the normal course of business.  It may be difficult to establish whether the indemnity in any contract is an unusual one (nearly all standard form supplier contracts will include an indemnity in their favour) and therefore advice or approval may be more commonly required here; and

3. 5.25-28 – leases (both finance and operational) may require consent if they fall within the specified list which includes entering into any property lease for more than 7 years as a tenant, or any property lease of any duration as a landlord to a third party tenant.

5. Entire agreement: These are standard form clauses which nullify any previous representations or commercial discussions (on both sides).  These are often beneficial, as you have greater certainty over the terms of the arrangement as they are all set out in the actual contract, but it is then important to ensure that any key commercial terms that were finalised in the negotiations, either in person, over the phone or on email, are then actually included in the drafting.  Don't settle for someone saying "of course we'll include that, but we don't want the legal team to have to amend the contract" as once you have signed you lose the ability to rely on any such verbal representation.

6. Limits on liability: supplier friendly contracts will often try to limit liability as far as possible, and to remove any indemnities under which the school or academy trust could recover costs.  Sometimes this will be commercially acceptable, but it is important to ensure that liability is duly apportioned so that the school/academy trust could recover appropriately.

7. Assignability and/or transferability: contracts may include clauses allowing the supplier to sub-contract the services, or to assign/transfer the benefit of the contract to another party.  Care should be taken here to allow the school/academy trust a certain level of control over this process so that you are only having to deal with people or parties you know.  This could be by way of consent to any such transfer, or an ability to terminate and walk away if you are not happy with the identity of the new supplier.

8. Data Protection/UK GDPR and safeguarding: as the contract may involve services relating to students it is important that there are sufficient obligations placed on the supplier to deal with the personal data relating to students in compliance with all relevant data protection legislation and UK GDPR and to act in accordance with appropriate safeguarding requirements.  This is not only to protect the students themselves, but also the school/academy trust from any claims that they did not take sufficient action to ensure the safety of students and proper use of any personal data.

9. Execution blocks: It is important to make sure that the signing formalities are correct to ensure that the contract is binding and enforceable.  In all cases, the school/academy trust will need to check its governing documents and the terms of any delegated authorities approved by the board to see what the exact requirements are.

Wrigleys have specialist commercial solicitors who work closely with schools and multi-academy trusts and would be very happy to advise on any contractual or commercial issues which you may feel may benefit from professional review.

If you would like to discuss any aspect of this article further, please contact our education team on 0113 244 6100.

You can also keep up to date by following Wrigleys Solicitors on LinkedIn.

The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website.

Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.