Key person clause
A contract term naming specific people on the vendor’s team who cannot be replaced without the buyer’s consent or notice and a handover.
Buyers often choose a vendor because of one architect or lead, then see that person move to another client after a few months. A key person clause names them, sets a minimum notice period, requires a replacement of equal seniority approved by the buyer and an overlap for handover, and sometimes a discount while the replacement ramps up. It reduces the bus factor risk on the vendor side.
Related terms
- Bus factor: How many people would have to disappear before a project stalls. A bus factor of one means one person holds the keys.
- Staff augmentation (team extension, body leasing): Renting developers from a vendor to work inside your team under your direction, instead of buying a project with an agreed result.
- Bench (on the bench): Software house slang for employees between projects: paid but not billable, so the vendor wants to place them on a client as soon as possible.
- MSA and SOW (master services agreement, statement of work): The master services agreement sets the legal terms once; each statement of work adds one project: scope, deliverables, timeline and price.
