Reviewing a step-in rights clause

A step-in clause lets a customer take over the running of a service when the supplier fails, using the supplier's staff, systems, sub-contractors and premises, at the supplier's cost. It is a customer's protection against a supplier failure, and for the supplier it means a customer taking control of part of its business, so the clause has to say who is responsible for what while it lasts. The triggers, the scope and the cost decide whether the clause is workable. I review the clause from whichever side instructs me and return it marked up with a written explanation of when the customer may step in, what it may do, who pays, and the changes the other side will accept, for a fixed fee of £495 in three working days.

Who this is for

Customers of IT, outsourcing, facilities management, logistics, care and other critical services in England and Wales that want to be able to keep the service running if the supplier fails, and suppliers asked to grant that right, including in public sector contracts where step-in is a standard term. Both parties are businesses.

What to look for in a step-in rights clause

The triggers: when the customer may step in

The clause should list the events that allow step-in: a material breach affecting the service, a persistent failure to meet service levels, a regulatory or safety risk, the supplier's insolvency, and an event that threatens the service and that the supplier is not addressing. The review narrows triggers drafted as 'in the customer's reasonable opinion' to objective events, adds a notice and a period for the supplier to remedy before step-in, and, for a customer, adds an emergency trigger where the delay would put people or the service at risk.

The scope: what the customer may do and may not

Step-in should be limited to the affected services, for the period the trigger continues, and should let the customer perform them itself or through a third party, give instructions to the supplier's staff assigned to those services, and use the supplier's assets and systems for that purpose. The review checks that the customer may not use step-in to take over the supplier's other services or customers, may not access the supplier's other customers' data, and must comply with the supplier's security and safety policies while it does.

Staff, sub-contracts, premises and licences

To step in, the customer needs access to the supplier's staff, its sub-contracts, its premises and the software licences the service runs on, and the clause should provide each: an obligation on the supplier to make staff available and to instruct sub-contractors to cooperate, a licence to occupy premises and use assets, and third-party consents obtained in advance. The review checks the third-party position, since a customer stepping into a sub-contract may rely on section 1 of the Contracts (Rights of Third Parties) Act 1999 only if the sub-contract allows it, and checks whether a prolonged step-in could transfer staff to the customer or a third party as a service provision change under regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

Who pays, and the supplier's liability during step-in

The clause will make the supplier pay the customer's reasonable costs of step-in, less the charges the supplier would have received, and will keep the supplier liable for the service throughout. The review asks for the supplier's liability for the services the customer is performing to be suspended, since the supplier cannot be liable for work it does not control, for the customer's costs to be capped and evidenced, for the charges for the services the supplier continues to perform to remain payable with interest under the Late Payment of Commercial Debts (Interest) Act 1998, and for the step-in costs to sit within the liability cap.

Data, security and the customer inside the supplier's systems

A customer that steps into an IT service takes control of systems that process the supplier's other customers' data and the supplier's own, and the clause should require the customer to act within the processor terms required by Article 28 of the UK GDPR and the Data Protection Act 2018, to comply with the supplier's security policies, and to use only agreed access, since access beyond what is authorised is an offence under section 1 of the Computer Misuse Act 1990. It should also prohibit the customer from copying the supplier's tools and know-how for use after step-out.

Stepping out and the relationship afterwards

Step-in should end when the trigger has been resolved and the supplier has shown it can resume, and the clause should provide a step-out plan, a handover back, and a statement of the parties' positions on the service credits and charges during the period. The review checks that step-in is not a route to termination without the contract's termination provisions, that a step-in caused by the supplier's insolvency is consistent with section 233B of the Insolvency Act 1986, which restricts termination of supply on the customer's insolvency rather than the supplier's, and that the parties' rights to terminate remain available where the trigger is not resolved.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

Our customer wants step-in rights. What are we agreeing to?

A right for the customer to take over the services, your staff and your systems when a trigger occurs, at your cost, while you remain liable. The review narrows the triggers, limits the scope to the affected services, suspends your liability for what the customer controls, and caps the costs.

Can we step in if the supplier goes into administration?

If the clause makes insolvency a trigger, yes, and the administrator's cooperation will be needed in practice. The review drafts the trigger, the access rights and the third-party consents so that step-in can happen on the day, and provides for the staff and sub-contracts.

What happens to the service credits and charges while we are stepped in?

Whatever the clause says, and customers draft it so that the supplier pays for everything. The review asks for the charges for services the supplier still performs to remain payable, for the customer's step-in costs to be evidenced and capped, and for the service credits to be suspended for the services the customer controls.

Related guidance and services

• Contract review, £495, the service this page describes
• SaaS and technology contracts, £995
• Data protection agreements and privacy terms, £795
• Reviewing an IT outsourcing agreement
• Reviewing an exit and transition clause

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.