How do you measure a service provider’s performance when it cannot guarantee the commercial result?

Advisory and optimisation services often sell an expected business benefit while disclaiming responsibility for actually achieving it.

That can be commercially reasonable. A revenue adviser cannot control customer demand. A procurement consultant cannot control commodity prices. A marketing agency cannot force customers to buy.

But if the contract says only that the provider will use “commercially reasonable efforts” and does not define the work to be performed, the customer may have no workable way to distinguish disappointing results from poor service.

The source matter behind this note involved recurring optimisation duties and task frequencies, but also broad exclusions for external systems and approvals. The useful lesson was to separate uncontrollable commercial results from duties the provider actually controls. fileciteturn13file9L243-L246

A company appoints an external specialist to improve a measurable business outcome.

The provider says:

“We cannot guarantee the result because many factors are outside our control.”

The customer accepts that principle but later asks:

“If the result falls short, how do we know whether the provider actually did its job?”

That question should be answered in the scope and performance framework before the contract is signed.

Examples include weekly analysis, monthly forecasts, scheduled optimisation, agreed reporting, defined recommendations, response times and attendance at review meetings.

A contract becomes much easier to manage when those outputs are concrete.

The provider may reasonably exclude responsibility for market demand, third-party system outages, client pricing decisions or delayed client approvals.

It should not use those exclusions to avoid responsibility for missing its own reports, failing to perform agreed analysis or making preventable execution errors.

Commercial results can still be monitored, but they should not be the only test.

Then state what happens if the dependency is delayed.

This prevents every performance dispute becoming an argument about who caused the missing input.

That is different from a calculation error, failure to follow an agreed instruction or omission of an agreed deliverable.

The contract should preserve that distinction.

That is often more useful than trying to convert a missed commercial target directly into damages.

We review the scope of services, deliverables, task frequencies, service levels, excluded dependencies, client approval responsibilities, reporting, error-correction obligations, fee structure, limitation of liability, termination rights and evidence needed to verify performance.

Typical mistakes are using revenue or profit as the only performance measure, allowing broad exclusions to swallow the actual scope, describing duties as “advisory” without defining outputs, and demanding a guaranteed commercial result from a provider that does not control implementation.

Prepare a two-column matrix:

provider controls → provider must deliver

provider does not control → outcome not guaranteed

Then attach measurable timing and evidence to the first column.

The contract does not need to guarantee success. It does need to make competent performance visible.

• Thai Civil and Commercial Code, section 213, on enforcement of contractual performance.
• Thai Civil and Commercial Code, sections 215 and 222, on damages for failure to perform and recoverable loss.
• Unfair Contract Terms Act B.E. 2540 (1997), where the agreement and parties fall within its scope.