A vendor management contract for EdTech (Education Technology) services should include a termination assistance clause.
A UK-based learning management system (LMS) service provider onboarded Corner School on its learning management platform in 2021.
Following the Naira devaluation and exponential foreign exchange rates in 2024, Corner School must switch from the UK-based LMS service provider to a more cost-effective provider with a regional pricing option to remain profitable.
The UK-based LMS service provider had exceptional service – however, Corner School stored its data on the UK firm’s digital learning management platform.
A Nigerian-owned Canadian-based firm provided EdTech support to Corner Schools. Corner School seeks to terminate all vendor management contracts with non-Nigeria-based vendors with no regional pricing.
Without a termination assistance clause in Corner School’s vendor management contracts for the EdTech services, termination could be more expensive and unmanageable.
In this commentary, our education law team re-examines how a termination assistance clause in an EdTech vendor management contract provides flexible termination and eases Schools’ exit from such agreements.
What is Termination Assistance?
Briefly, termination assistance in an EdTech contract anticipates all necessary assistance a School may require during an early exit or expiration of a vendor management contract or service level agreement.
Terminating assistance in the imaginary Corner School’s LMS contract would include seamless data migration from the UK-based firm’s platform to the new service provider.
Data migration can be cumbersome. Data include students’ data, admission packs, assessment results, entire academic results, teachers’ personal and employment data, data of parents or guardians, vendors, and other information or documents.
Termination assistance ensures a well-organized exit from an LMS contract or any other EdTech service level agreement.
The Role of Termination Assistance Clauses
A termination assistance clause in an EdTech or LMS vendor management contract enables the service provider and the School to manage an orderly transition.
Termination Assistance clauses typically ensure:
Knowledge Transfer: Whether an early contract exit or contract expiration, Schools and successor-service providers should access every data and work product that concerns the School’s operation and learning system for training and knowledge transfer.
A Termination Assistance clause provides an orderly transfer of data and work products in a pre-agreed format to avoid repetitive data entry and related costs.
Service Standards: Your School’s EdTech vendor management contract must ensure that your vendor maintains the same level of service during the transition period from the predecessor vendor to the successor vendor.
Your education lawyers should ensure the termination assistance clause sustains agreed service levels and other customary service standards during an event of early termination or contract expiration.
Termination Assistance Period: The vendor management contract should specify when the vendor must begin the termination assistance services and when they will end.
Customarily, termination assistance begins when the School delivers the notice of early termination or a non-renewal intention.
No Nigerian law requires termination assistance in a commercial contract. Therefore, the period must depend on the complexities of the service. Termination Assistance may be up to two years in outsourcing or complex EdTech services.
Related Cost: Education law teams that advise Schools in EdTech contracts must limit disengagement-related costs during any termination assistance period to the vendor’s cost of providing the terminated services.
The predecessor vendor should deliver Termination Assistance at no added cost to the School.
Where this is impracticable – it is usually not during onboarding – an education lawyer must ensure that the termination assistance fee is limited to a percentage of the contract sum of the terminated contract.
Some LMS equipment may be peculiar to the service provider. An example is MTN Nigeria’s internet router. You must ditch the MTN device and buy Smile to switch from MTN to Smile.
Some vendor onboarding packages have fine prints that vest ownership of such device or equipment on the vendor, with a straightforward device retrieval procedure.
Your Education lawyers must negotiate a retrieval procedure in the Termination Assistance clause.
Cooperation and Right to Hire Vendor’s Personnel: Termination Assistance obliges the vendor to cooperate during termination.
The good faith obligation to cooperate during termination must expand to include successor vendors and the School’s authorized third-party representatives.
Education lawyers must ensure that the duty to cooperate aligns with the party’s confidentiality obligations.
Typically, vendors object to a right to hire a personnel clause in a vendor management contract. Schools must insist on a right to hire the vendor’s personnel during termination assistance.
It could be a secondment with the personnel’s right to return to the vendor when the Termination Assistance period expires.
Conclusion
Termination Assistance clauses in an education technology service contract assist Schools in managing disruptions that arise from termination events in vendor management contracts.
As Nigeria’s education sector expands into a learning management system, education lawyers must offer bespoke legal and business advisory to educational institutions.
SRJ Legal is an education law firm. We complement our education law practice with fintech and dispute (litigation). At the same time, we provide corporate counsel services to schools, education non-profits, alumni associations, regulators, and parent-teacher associations.
