Recommendations: Overview, definition, and example
What are recommendations?
Recommendations refer to advice, suggestions, or endorsements provided by one party to another, often based on expertise, experience, or contractual obligations. In a business or legal context, recommendations can be informal guidance or formal contractual obligations requiring one party to suggest actions, services, or solutions.
For example, a consulting firm may provide recommendations to a client on improving their business operations based on an in-depth analysis.
Why are recommendations important?
Recommendations are important because they help businesses and individuals make informed decisions. Whether in professional services, contracts, or regulatory compliance, recommendations provide valuable guidance that can lead to better outcomes.
For companies, defining recommendations in a contract can clarify whether they are binding, advisory, or subject to further approval. This distinction is crucial in avoiding misunderstandings or liability if a recommendation is followed but does not achieve the desired result.
Understanding recommendations through an example
Imagine a financial advisor provides investment recommendations to a client. While the advisor suggests a portfolio strategy, the client is not legally obligated to follow the advice, and the advisor is not responsible for market outcomes unless otherwise stated in the contract.
In another scenario, a technology vendor is contracted to recommend cybersecurity improvements for a company. The vendor provides recommendations in a report, but it is up to the company to decide which security measures to implement.
An example of a recommendations clause
Here’s how a recommendations clause might appear in a contract:
“Any recommendations provided by [Party Name] under this Agreement are for advisory purposes only and do not constitute a binding obligation on either Party unless expressly agreed in writing.”
Conclusion
Recommendations play a vital role in decision-making by offering expert advice and strategic guidance. Whether in consulting, finance, or technology, recommendations help businesses navigate challenges and optimize performance.By including a recommendations clause in contracts, parties can clarify the scope, limitations, and responsibilities related to advice given, ensuring transparency and preventing disputes over advisory obligations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.