Small business grants: contract points to settle with advisers and suppliers

An adviser or supplier contract should support the grant project without implying that the other party controls the funder's decision. These twelve points need case-specific legal review before signature.

What to take away

A supplier contract must not suggest the adviser controls the funder's award decision.
Define deliverables, evidence and acceptance so grant support can be measured and paid.
Match payment milestones to evidenced work rather than submission of an application.
Check the provider's legal entity, insurance, staff and any commissions before signing.
Supplier terms must fit the grant agreement's timetable, eligible costs and procurement conditions.

1. Parties and authority

Use the correct legal entities and name the people authorised to approve work, changes and payment. Check the entity against Companies House and record in writing who can approve a variation.

2. Scope

Describe the research, writing, modelling, procurement, delivery or claims work included. List exclusions so neither party assumes that a critical task belongs to the other. Name who supplies any third-party evidence, such as quotes or technical reports.

Scope: Included vs Excluded

Included

Research: In scope
Writing: In scope
Modelling: In scope
Procurement: In scope
Delivery: In scope
Claims work: In scope

Excluded

Research: Not covered
Writing: Not covered
Modelling: Not covered
Procurement: Not covered
Delivery: Not covered
Claims work: Not covered

3. Deliverables and acceptance

Define the output, format, evidence and acceptance process. "Grant support" is too vague to measure. Name who signs off each deliverable and state the period for feedback before the work is deemed accepted.

4. Fees and tax

State fixed, hourly, subscription or contingent fees, VAT treatment, expenses and payment dates. If a fee depends on success, define the trigger precisely. Give the VAT rate applied and state whether expenses are capped or rechargeable at cost.

Fee Structures Compared

Fixed

VAT treatment: State
Expenses: Define
Payment dates: Set
Success trigger: N/A

Hourly

VAT treatment: State
Expenses: Define
Payment dates: Set
Success trigger: N/A

Subscription

VAT treatment: State
Expenses: Define
Payment dates: Set
Success trigger: N/A

Contingent

VAT treatment: State
Expenses: Define
Payment dates: Set
Success trigger: Define precisely

5. No guarantee

Make clear that the funder decides the award. Remove sales language that contradicts the contract. For example, Innovate UK Smart Grants are competitive and the funder alone decides which projects are funded.

6. Applicant declarations

Specify who supplies and approves factual information. The contract should not encourage an applicant to sign claims it has not checked. Require a named person to sign off each factual statement before submission.

7. Confidentiality

Protect commercial information while allowing disclosures required by the funder, law or professional advisers. State the permitted recipients and the retention period for confidential material.

8. Personal data

Set controller and processor responsibilities where relevant, permitted uses, security, subprocessors, retention and deletion. Use the ICO's contracts guidance for the data relationship, then obtain advice on the actual arrangement. Name each subprocessor and the country where data is held.

9. Intellectual property

Decide who owns application drafts, models, designs, software and project outputs. Address pre-existing material and licences separately. List any background IP the supplier brings and the licence terms for its use.

10. Conflicts and commissions

Require disclosure of supplier commissions, referral fees, connected parties and competing duties. State how a conflict will be managed. Ask for the amount or rate of any commission before signature.

11. Change, delay and termination

Define how scope changes, what happens when a funder changes the timetable and which fees apply if the application or project stops. Set out the notice period for a change and the evidence needed to claim a delay cost.

Termination and Change Checklist

Define how scope changes
Handle funder timetable changes
State fees if application stops
State fees if project stops

12. Liability and disputes

Allocate responsibility proportionately and provide a workable dispute route. Do not assume a broad disclaimer is enforceable. Name a mediator or the courts of England and Wales as the forum.

The CMA's fair-contract guidance applies to trader-to-consumer terms and notices. It stresses fairness, transparency and prominent significant terms. The status of a sole trader or mixed-use customer can require careful assessment; business-to-business contracts need their own legal analysis.

Review against the grant agreement

Supplier terms must fit the funded timetable, eligible costs, procurement conditions, evidence duties and change-control process. A commercial contract cannot expand what the funder will pay.

Check the provider before signing

Review ownership and commissions. A grant adviser that recommends its connected supplier has a conflict that should be disclosed and managed. A provider paid for a lead should not be described as independently selected.

Match payment to work

Set milestones that can be evidenced and accepted. Avoid paying the whole fee because an application was submitted when the contracted value includes clarification, award review or claims support. Equally, do not make payment depend on an event outside the supplier's control unless the risk and trigger are clear.

Check whether the fee itself is an eligible project cost. A supplier's assurance does not bind the funder.

Plan an orderly exit

The business should be able to recover its drafts, source records, credentials and project data if the relationship ends. Define handover, deletion, outstanding payment and continued confidentiality. Remove a former provider's access promptly.

Record advice received and the business's decision. A signed contract does not replace ongoing oversight of deliverables or grant compliance.

Keep the signed contract, variations, approvals and delivery evidence with the project record.

Before you act

Confirm the correct legal entities and authorised approvers.
List scope inclusions and exclusions clearly.
Define acceptance, evidence and payment triggers.
Disclose commissions, referral fees and connected parties.
Check fees are eligible project costs.
Plan handover, deletion and access removal on exit.

Common questions

What should the contract say about the funder's decision?

It should make clear that the funder decides the award, and remove any sales language that contradicts the contract. The contract should not imply that the adviser or supplier controls the funder's decision. It should also specify who supplies and approves factual information, so an applicant is not encouraged to sign unchecked claims.

How should payment be linked to the work?

See Match payment to work above for milestones, triggers and eligibility.

What should a business check before signing with a provider?

Verify the legal entity, address, company record where relevant, insurance claimed, named delivery staff and any professional status used in marketing. Ask for evidence of the specific service rather than relying on an award logo or testimonial. Review ownership and commissions, because a provider paid for a lead should not be described as independently selected.