10 Questions to Ask a Fractional CTO Before Signing the Contract (UK Founders' Guide 2025)

Last Updated: 8 November 2025 | Reading Time: 14 minutes

TL;DR - The 10 Critical Pre-Contract Questions

Q: What questions should I ask a fractional CTO before signing the contract?

A: Ask about guaranteed availability and response times, how they handle competing client priorities, IP ownership and confidentiality terms, notice period and exit conditions, what happens if the relationship isn't working, references from similar UK businesses, how success will be measured, insurance and liability coverage, conflict of interest policies, and their approach to knowledge transfer. These questions reveal whether the engagement will actually work and protect your business if it doesn't.

---

Why These Questions Matter More Than You Think

A Manchester ecommerce company hired a fractional CTO without asking detailed pre-contract questions. The contract looked standard. They signed it.

Three months later, they discovered their fractional CTO was working with a competitor (legal, but problematic). When they needed urgent support during a security incident, they couldn't reach him for 36 hours because he was "committed to another client." And when they wanted to part ways after 6 months, they discovered a 3-month notice period they didn't remember agreeing to.

Total cost of poor contract diligence: £18,000 in wasted fees, 6 weeks of security vulnerabilities, and 3 months stuck in an ineffective engagement.

Most UK founders sign fractional CTO contracts without asking the hard questions that reveal whether the engagement will actually work.

The problem isn't that fractional CTOs are dishonest. Most are excellent professionals. The problem is that vague contracts create different expectations - and those misaligned expectations cause 95% of fractional CTO relationship failures.

This guide covers the 10 questions you must ask before signing, red flags in their answers, what fair UK market terms look like, and the specific contract clauses that protect your business.

---

Question Category 1: Availability and Response Times

Question 1: What specific hours per month am I guaranteed, and how flexible is that time?

Why this matters: "3 days per month" can mean 24 hours spread across 12 two-hour slots, or three full 8-hour days, or anything in between. The structure dramatically affects value.

What to listen for in their answer:

• Green flag: "You're guaranteed 24 hours per month, typically structured as 2-3 full days for deep work, plus ad-hoc questions via Slack. I track hours monthly and roll over unused time up to 8 hours per quarter."
• Yellow flag: "We'll work it out as we go based on what you need." (Too vague - you need guaranteed minimums)
• Red flag: "I charge hourly so you get what you pay for." (Misaligned incentives - you want outcomes, not hours)

Follow-up question: "If I don't use all my hours one month, what happens? Can they roll over or are they lost?"

Fair UK market terms:

• Monthly retainers should specify minimum and maximum hours
• Unused hours can typically roll over for 1-2 months (not indefinitely)
• Emergency availability should be defined separately from standard hours
• Most UK fractional CTOs offer 16-40 hours per month with clearly structured time

Question 2: What's your guaranteed response time for urgent issues versus routine questions?

Why this matters: When your production system is down at 2am, "I'll get back to you within 48 hours" isn't good enough. But you also can't expect instant responses to every routine question.

What to listen for:

• Green flag: "For production emergencies affecting customers, I respond within 2 hours during UK business hours, 4 hours evenings/weekends. For strategic questions, I respond within 24 hours on working days."
• Yellow flag: "I check messages twice daily." (What if there's an emergency?)
• Red flag: "I'm always available." (Unrealistic - they have other clients and will burn out)

Contract clause to include:

Response Time Commitments:

• Critical incidents (production down, security breach, data loss): 2-hour response during UK business hours (9am-6pm Mon-Fri), 4-hour response outside business hours
• Urgent matters (deployment issues, key decision needed): 4-hour response during business hours, next business day outside hours
• Routine questions: 24-hour response on working days
• Strategic planning/reviews: Scheduled in advance, minimum 1 week notice required

Real example: A Birmingham SaaS company included tiered response times in their contract. When they had a database issue at 7pm on a Friday, their fractional CTO responded within 3 hours, diagnosed the problem, and had them stable by 11pm. Total customer impact: 4 hours. Without defined response times, they might have waited until Monday.

---

Question Category 2: Client Conflicts and Priorities

Question 3: How many other clients do you currently work with, and are any of them in my industry or competitive with my business?

Why this matters: If they're working with 8 other clients, you're getting 12% of their capacity. If one of those clients is your competitor, they might see your strategic plans and inadvertently share insights that benefit your competition.

What to listen for:

• Green flag: "I currently work with 3 other clients, none in your industry. I cap myself at 4 clients maximum to ensure quality. I have a strict conflict of interest policy and wouldn't take on a competitor without your written consent."
• Yellow flag: "I have several clients but I manage my time well." (How many is several? 3? 10? Are they competitors?)
• Red flag: "I don't see how that's relevant." (Massive red flag - they don't understand conflicts of interest)

Follow-up questions:

• "What's your maximum client capacity? When would you stop taking new clients?"
• "If a potential client approached you in my exact space, would you take them on?"
• "Can you provide references from current clients so I can ask how you balance competing priorities?"

Contract clause to include:

Conflict of Interest and Non-Competition:

Consultant confirms they do not currently work with any business that directly competes with Client in [specify your market/geography]. For the duration of this agreement and 6 months following termination, Consultant will not accept engagements with direct competitors without Client's prior written consent.

Consultant will immediately disclose any new client engagements that could present a conflict of interest. Client retains the right to terminate this agreement with 30 days notice if a material conflict arises.

Question 4: If two clients have urgent needs at the same time, how do you prioritize?

Why this matters: This reveals their professionalism, communication skills, and whether they've thought through the hard scenarios that will inevitably arise.

What to listen for:

• Green flag: "I assess the business impact of each urgent need. A production outage affecting customers takes priority over an internal planning decision. I communicate immediately with both clients about the situation, provide realistic timelines, and help them find interim solutions if I can't address both simultaneously. This has only happened twice in my career."
• Yellow flag: "First come first served." (Ignores business impact - not strategic thinking)
• Red flag: "That never happens." (It will happen - and they haven't prepared for it)

What this really tests: Whether they've experienced this scenario, how they communicate under pressure, and if they think strategically about business impact versus time-based queuing.

---

Question Category 3: Intellectual Property and Confidentiality

Question 5: Who owns the IP for work you create, including strategic documents, architecture designs, and code?

Why this matters: If they create your technical roadmap, architecture plans, or write any code, you need to own that IP completely. Some contracts claim joint ownership or retain rights for the consultant to reuse materials.

What to listen for:

• Green flag: "All work product created specifically for your business is your IP, assigned to you immediately upon creation. I only retain the right to use non-confidential, generalised learnings in my future work - for example, I can't use your proprietary algorithm, but I can apply general architectural patterns I used."
• Yellow flag: "Standard work-for-hire terms apply." (Ask them to specify exactly what that means in UK law)
• Red flag: "I retain IP rights to methodologies I develop." (Too vague - what's a methodology versus your specific strategy?)

Contract clause to include:

Intellectual Property Ownership:

All work product, including but not limited to strategic documents, technical architecture, code, diagrams, reports, and recommendations created by Consultant specifically for Client shall be considered "works made for hire" under UK copyright law. To the extent any work product does not qualify as work made for hire, Consultant hereby irrevocably assigns all right, title, and interest in such work product to Client.

Consultant retains the right to use general skills, knowledge, and experience gained during this engagement, provided such use does not disclose Client's confidential information or replicate Client-specific work product.

UK legal consideration: Unlike the US, UK law doesn't have automatic "work for hire" for independent contractors. You need explicit assignment of IP rights in your contract. Don't skip this - it's critical.

Question 6: What information can you share publicly about our engagement, and what stays confidential?

Why this matters: Most fractional CTOs will want to use your engagement as a case study or reference. That's fair - but you need to control what information becomes public and when.

What to listen for:

• Green flag: "I'd like to list your company as a client reference (with your approval) and potentially write a case study after 6-12 months. I would share the case study with you for approval before publishing, and you can redact any sensitive information. I won't share technical details, financial information, or strategic plans without your explicit written consent."
• Yellow flag: "Everything is confidential." (Sounds good, but unrealistic - they need references for future clients)
• Red flag: "I'll probably write a blog post about the engagement." (Without asking permission first? Red flag)

Contract clause to include:

Confidentiality and Public Disclosure:

Consultant agrees to keep all Client information confidential, including but not limited to technical architecture, business strategy, financial information, customer data, and internal processes.

Consultant may list Client's name as a reference client (subject to Client approval). Any case studies, blog posts, testimonials, or detailed descriptions of work performed require Client's prior written approval. Client retains the right to review and redact any proposed public materials.

This confidentiality obligation survives termination of this agreement and continues for 5 years following the end of the engagement.

---

Question Category 4: Exit Terms and Performance Issues

Question 7: What's the notice period if either of us wants to end the engagement, and are there any penalties or minimum terms?

Why this matters: If the engagement isn't working, you need to be able to exit without massive financial penalties or being locked in for months. Equally, they need reasonable notice so they're not suddenly without income.

What to listen for:

• Green flag: "After the first 3 months, either party can terminate with 30 days written notice. No penalties or minimum terms after the initial period. I include a 3-month initial commitment so we both have time to make the engagement work before making a quick exit decision."
• Yellow flag: "6-month minimum commitment, then 60 days notice." (Long lock-in - you might be stuck if it's not working)
• Red flag: "12-month minimum term with early termination penalty of 50% of remaining contract value." (Completely unreasonable for fractional work)

Fair UK market terms:

• Initial commitment: 1-3 months (gives both parties time to assess fit)
• Notice period after initial term: 30 days (balanced for both parties)
• Early termination penalty: None, or maximum 1 month fees
• Immediate termination: Allowed for breach of contract, gross negligence, or material conflict of interest

Contract clause to include:

Term and Termination:

This agreement shall commence on [start date] with an initial term of 3 months ("Initial Term"). Following the Initial Term, this agreement continues on a rolling monthly basis.

Either party may terminate this agreement without cause by providing 30 days written notice. Notice may be provided during or after the Initial Term, with termination effective 30 days from notice date.

Either party may terminate immediately for material breach (with 14 days to cure), gross negligence, or material conflict of interest.

Upon termination, Client shall pay for all work completed through the termination date. Consultant shall return all Client property and confidential information within 7 days of termination.

Question 8: What happens if I'm not satisfied with the work or progress? What's your process for addressing performance concerns?

Why this matters: This question reveals whether they're defensive or collaborative, whether they've dealt with performance issues before, and what recourse you have if things aren't working.

What to listen for:

• Green flag: "I build in regular check-ins specifically to address concerns before they become problems. If you're not satisfied, I want to know immediately. We'd have a specific conversation about what's not working, document clear expectations, and set a 30-day period to demonstrate improvement. If we can't get aligned after that, we'd discuss an orderly transition with knowledge transfer. I've had this happen once in 4 years - we identified the issue was misaligned expectations around hands-on versus strategic work, documented clearer boundaries, and the engagement succeeded."
• Yellow flag: "That's never happened to me." (Unlikely - and they haven't prepared for it)
• Red flag: Defensive response or blame-shifting: "If clients aren't satisfied it's usually because they didn't give me the information I needed." (Not taking ownership)

Contract clause to include:

Performance Review and Dispute Resolution:

Parties agree to monthly performance reviews covering progress against agreed objectives, deliverables completed, and any concerns from either party.

If Client is not satisfied with Consultant's performance, Client will provide written notice detailing specific concerns. Parties agree to meet within 7 days to discuss concerns and document a remediation plan with specific, measurable improvements and a 30-day timeline.

If performance concerns are not adequately addressed within the remediation period, Client may terminate this agreement with 14 days notice (versus standard 30 days).

---

Question Category 5: References and Track Record

Question 9: Can you provide 2-3 references from UK businesses at a similar stage to mine, and what specific questions should I ask them?

Why this matters: References from Fortune 500 companies don't tell you how they work with £2M revenue scale-ups. You need references from similar businesses who can speak to the specific challenges you're facing.

What to listen for:

• Green flag: "Absolutely. Here are three clients: [gives names, industries, business stages]. Company A is a £3M SaaS business in Birmingham - very similar to your stage. Company B is slightly larger but faced similar technical debt challenges. Company C just went through a fundraise like you're planning. I'll send you their contact details with permission. I'd recommend asking them about responsiveness, how I handle competing priorities, whether I delivered what I committed to, and what they wish they'd known before engaging me."
• Yellow flag: "I can provide references but they're all under NDA." (Convenient excuse - push back and ask for at least one reference)
• Red flag: "I don't give out references because of confidentiality." (Every professional service provider has references - this is a red flag)

Questions to ask their references:

1. "How long did you work with them, and are you still working together?"
2. "What specific business outcomes did they help you achieve?"
3. "How did they handle urgent situations or competing priorities?"
4. "What was their response time like for different types of questions?"
5. "Did they deliver what they committed to in the timeline promised?"
6. "What would you have done differently in the engagement if you could start over?"
7. "Would you hire them again for a different project or recommend them to a founder friend?"
8. "Were there any surprises in the contract or billing that you weren't expecting?"
9. "How did they handle knowledge transfer and documentation?"
10. "What's one thing you wish you'd known before signing the contract?"

Red flags in reference responses:

• References who are vague or can't provide specific examples
• References who are all from 3+ years ago (what happened recently?)
• References who say "they were fine" but don't enthusiastically recommend them
• References who mention communication issues, missed deadlines, or availability problems
• References who ended the engagement within 6 months (why so short?)

---

Question Category 6: Insurance, Liability, and Knowledge Transfer

Question 10: What professional insurance do you carry, and what happens if your work causes a problem or data breach?

Why this matters: If they make an architectural decision that causes a £50,000 data breach, or recommend a vendor that goes bankrupt taking your data with them, you need to know who's liable and whether they're insured.

What to listen for:

• Green flag: "I carry £1 million Professional Indemnity Insurance and £2 million Public Liability Insurance through [reputable UK insurer]. I can provide proof of coverage. The contract includes a liability cap of 3x monthly fees for indirect damages, unlimited liability for gross negligence or breach of confidentiality. I've never had a claim in [X] years, but insurance protects both of us if something unexpected happens."
• Yellow flag: "I have insurance but I'd need to check the details." (They should know this - it's basic professional practice)
• Red flag: "I don't carry insurance because I'm careful." (Massive red flag - what if they're hit by a bus tomorrow and can't complete the work?)

UK market standard for fractional CTO insurance:

• Professional Indemnity (PI): £500,000 to £2,000,000 depending on client size
• Public Liability: £1,000,000 to £5,000,000
• Cyber Liability (increasingly common): £250,000 to £1,000,000
• Key Person Insurance: Some have this to cover handover if they become unable to work

Contract clause to include:

Insurance and Liability:

Consultant represents that they maintain Professional Indemnity Insurance of at least £[1,000,000] and Public Liability Insurance of at least £[2,000,000]. Consultant shall provide proof of insurance upon request and maintain coverage throughout the term of this agreement.

Consultant's total liability for any claims arising from this agreement, excluding gross negligence, willful misconduct, or breach of confidentiality, shall be limited to the lesser of: (a) three times the average monthly fees paid in the preceding 6 months, or (b) £[specify cap, typically £25,000-100,000].

Nothing in this agreement shall limit liability for death or personal injury caused by negligence, fraud or fraudulent misrepresentation, or breach of confidentiality obligations.

---

Bonus Question: Knowledge Transfer and Continuity

Question to add: "How do you ensure knowledge transfer so my team and I understand the decisions you're making and could continue if you were suddenly unavailable?"

Why this matters: If they get hit by a bus or take a 3-week holiday, your business shouldn't grind to a halt. They should be documenting decisions and ensuring your team gains capability, not creating dependency.

What to listen for:

• Green flag: "I document all major decisions in [tool/wiki], including context, options considered, and rationale. I do monthly knowledge transfer sessions with your team. By month 6, your team should be able to make most technical decisions independently with me as a reviewer and strategic advisor. I build capability, not dependency."
• Yellow flag: "I'm available by phone if questions come up." (Doesn't scale - what if they're unavailable?)
• Red flag: "You're hiring me for my expertise, so I make the decisions." (Creates dangerous dependency - you need to build internal capability)

---

Red Flags in Contracts: Warning Signs to Watch For

Beyond the questions above, here are contract red flags that should make you pause or walk away:

Scope and Deliverables Red Flags

• Vague deliverables: "Provide strategic guidance" without specific outputs or success criteria
• No performance metrics: No mention of how success will be measured or reviewed
• Unlimited scope creep: "As needed" language without boundaries on what's included versus extra
• No documentation requirements: They're not committing to write anything down

Financial Red Flags

• Large upfront payments: More than 1-2 months fees paid in advance (risk if they disappear)
• Auto-renewal without notice: Contract renews automatically without giving you a chance to cancel
• Expenses without caps: "Reasonable expenses reimbursed" without defining reasonable or setting a cap
• Overage charges not specified: No mention of what happens if you need more hours than the retainer includes
• Rate increases without notice: They can raise rates without advance warning or approval

Legal and IP Red Flags

• No IP assignment: Doesn't specify that you own the work product
• Retained rights to reuse your work: They claim the right to use your strategy/code for other clients
• Weak confidentiality: No NDA or confidentiality clause, or very short term (less than 3 years)
• One-sided indemnification: You indemnify them for everything, but they have no liability to you
• Unusual jurisdiction: Contract governed by laws outside the UK without good reason

Availability and Commitment Red Flags

• No response time commitments: They don't guarantee when they'll respond to messages
• No maximum client cap: They could take on unlimited clients, diluting your access to them
• No conflict of interest clause: They could work with your direct competitors
• Unrealistic availability promises: "Available 24/7" or "always on call" (they'll burn out or it's not true)

Termination and Exit Red Flags

• Very long minimum term: 12+ months locked in with no early exit
• Large termination penalties: More than 1-2 months fees to exit early
• No termination for cause: You can't exit even if they breach the contract
• Long notice period: More than 60 days notice required (you're stuck for 2+ months if it's not working)
• No knowledge transfer requirements: They can walk away without documenting anything

---

Fair UK Market Terms: What a Good Contract Looks Like

Here's what fair, market-standard terms look like for UK fractional CTO contracts in 2025:

Scope and Deliverables

• Time commitment: Specific hours per month (e.g., 24 hours) with flexibility in scheduling
• Core services: Strategic planning, architecture decisions, technical hiring support, team mentoring, vendor evaluation
• Out of scope: Hands-on coding, 24/7 support, recruitment fees, extensive travel without additional agreement
• Deliverables: Monthly written updates, quarterly strategic reviews, documentation of major decisions
• Success metrics: Agreed KPIs reviewed monthly (e.g., team velocity, cost optimisation, technical debt reduction)

Financial Terms

• Monthly retainer: £3,000-10,000 depending on time commitment and experience
• Payment terms: Net 30 days, invoiced monthly in advance or arrears
• Upfront payment: First month only (or prorated for mid-month starts)
• Overage: Additional hours at 1.25-1.5x the effective hourly rate, pre-approved in writing
• Expenses: Reasonable pre-approved expenses reimbursed with receipts, typically capped at £200-500/month
• Rate reviews: Annual review with 60 days notice of any increases, capped at CPI + 5%

Term and Termination

• Initial term: 1-3 months to assess fit
• Ongoing term: Rolling monthly or quarterly after initial period
• Notice period: 30 days written notice by either party
• Termination for cause: Immediate termination for material breach (with 14 days to cure), gross negligence, conflict of interest
• Early termination fee: None, or maximum 1 month fees if within initial term
• Knowledge transfer: 5-10 hours included for handover upon termination

Intellectual Property

• Ownership: All work product created specifically for Client is Client's IP, assigned immediately
• Pre-existing IP: Consultant retains ownership of methodologies, templates, and materials created before engagement
• Third-party IP: Consultant warrants they have rights to use any third-party materials included
• Moral rights: Consultant waives moral rights to extent permitted by UK law

Confidentiality and Non-Compete

• Confidentiality term: 5 years following termination (or perpetual for trade secrets)
• Permitted disclosures: Can list client name as reference with approval; case studies require written consent
• Conflict of interest: Won't work with direct competitors without client approval
• Non-solicitation: Won't hire client's employees for 12 months following engagement (mutual)

Liability and Insurance

• Professional Indemnity: £500,000-2,000,000 coverage maintained throughout term
• Liability cap: 3-6x monthly fees for indirect damages; unlimited for gross negligence or confidentiality breach
• Exclusions: No liability for decisions made by client against consultant's advice (documented in writing)

---

Sample Contract Clauses (UK-Specific)

Here are sample clauses you can use or adapt for your fractional CTO contract. These are templates only - have a solicitor review before using.

Scope of Services

1. Services

1.1 The Consultant shall provide fractional CTO services to the Client, including:

• (a) Strategic technology planning and roadmap development
• (b) Technical architecture design and review
• (c) Technology vendor evaluation and contract negotiation support
• (d) Technical hiring support including role definition, interview participation, and candidate assessment
• (e) Engineering team mentoring and process improvement
• (f) Board-level technology reporting and communication

1.2 Time Commitment: The Consultant shall dedicate approximately [24] hours per month to the Services, structured as [2-3] full days per month plus ad-hoc availability for urgent questions.

1.3 The following are explicitly excluded from the Services unless separately agreed in writing: (a) hands-on software development or coding, (b) 24/7 emergency support, (c) hours exceeding the monthly allocation without prior written approval, (d) recruitment fees for hires made, (e) travel beyond [specify reasonable limits].

Response Times and Availability

2. Response Times

2.1 The Consultant commits to the following response times:

• (a) Critical incidents (production outage, security breach, data loss): 2 hours during UK business hours (9am-6pm Monday-Friday), 4 hours outside business hours
• (b) Urgent matters (deployment issues, time-sensitive decisions): 4 hours during business hours, next business day outside business hours
• (c) Routine questions: 24 hours on working days
• (d) Strategic planning: Scheduled in advance with minimum 1 week notice

2.2 The Consultant shall provide at least 14 days notice of any planned absences exceeding 5 working days and shall arrange coverage for urgent matters during such absences.

Intellectual Property Assignment

3. Intellectual Property

3.1 All work product, including but not limited to documents, code, diagrams, reports, presentations, and recommendations created by the Consultant specifically for the Client ("Work Product") shall be the sole and exclusive property of the Client.

3.2 The Consultant hereby assigns to the Client all right, title, and interest in and to the Work Product, including all intellectual property rights, with full title guarantee. This assignment takes effect immediately upon creation of the Work Product.

3.3 The Consultant retains ownership of: (a) pre-existing materials created before this engagement, (b) general methodologies, processes, and templates not specific to Client, and (c) general skills and knowledge gained during the engagement.

3.4 The Consultant warrants that the Work Product does not infringe any third party intellectual property rights and that they have full authority to assign the Work Product to Client.

Termination

4. Term and Termination

4.1 This agreement shall commence on [start date] with an initial term of [3 months] ("Initial Term"). Following the Initial Term, this agreement shall continue on a rolling monthly basis until terminated by either party.

4.2 Either party may terminate this agreement without cause by providing [30] days written notice to the other party.

4.3 Either party may terminate this agreement immediately upon written notice if:

• (a) The other party commits a material breach of this agreement and fails to remedy such breach within 14 days of written notice;
• (b) The other party becomes insolvent, enters administration, or ceases to trade;
• (c) A material conflict of interest arises that cannot be resolved.

4.4 Upon termination, the Client shall pay the Consultant for all Services provided up to the effective date of termination. The Consultant shall return all Client property and confidential information within 7 days of termination.

4.5 The Consultant shall provide up to [8] hours of knowledge transfer and handover support following termination, included in the final month's fees.

---

Questions to Ask Their References

When you speak to their references, use these questions to get beyond surface-level "they were great" responses:

Engagement Basics

1. "How long did you work with [Name], and are you still working together? If not, why did it end?"
2. "What was your business stage and revenue when you hired them?"
3. "What specific problem were you trying to solve by hiring a fractional CTO?"

Deliverables and Performance

4. "What specific, measurable business outcomes did they help you achieve? Can you quantify the impact?"
5. "Did they deliver what they committed to in the timeline they promised?"
6. "Were there any deliverables or commitments they didn't meet? How did they handle that?"
7. "How would you rate their work quality on a scale of 1-10, and why?"

Availability and Communication

8. "How responsive were they to urgent issues? Can you give an example?"
9. "How did they balance your needs with their other clients' needs?"
10. "Were they available when you needed them, or did you ever feel like you couldn't reach them?"
11. "How did they communicate progress and decisions? Was it clear enough for non-technical stakeholders?"

Working Relationship

12. "How did they handle disagreements or push back on your ideas?"
13. "Did they build capability in your team, or did you become dependent on them?"
14. "What would you have done differently in the engagement if you could start over?"
15. "Was there anything in the contract or billing that surprised you or that you weren't expecting?"

The Most Important Questions

16. "Would you hire them again for a different project?" (If they hesitate or say no, dig deeper)
17. "Would you recommend them to a founder friend without reservation?" (Notice any hesitation)
18. "What's one thing you wish you'd known about working with them before you signed the contract?" (This often reveals hidden issues)

---

Final Pre-Signature Checklist

Before you sign a fractional CTO contract, verify all of these:

Questions Asked and Answered

• ☐ Confirmed specific hours per month and flexibility in scheduling
• ☐ Clear response time commitments for different types of issues
• ☐ Understood how many other clients they have and confirmed no conflicts of interest
• ☐ Documented how competing urgent priorities are handled
• ☐ Verified IP ownership - you own all work product created for you
• ☐ Agreed on what can be shared publicly and what stays confidential
• ☐ Notice period is reasonable (30-60 days maximum)
• ☐ Clear process for addressing performance issues
• ☐ Checked 2-3 references from similar businesses
• ☐ Confirmed they carry appropriate insurance (PI and PL)

Contract Review

• ☐ Scope of services clearly defined with inclusions and exclusions
• ☐ Success metrics and performance review process documented
• ☐ Response times and availability commitments in writing
• ☐ Intellectual property assignment is clear and complete
• ☐ Confidentiality terms are strong (5+ years, covers all sensitive information)
• ☐ Conflict of interest and non-compete clauses protect you
• ☐ Notice period is 30-60 days maximum
• ☐ Early termination penalty is none or maximum 1 month fees
• ☐ Termination for cause includes material breach, gross negligence, conflicts
• ☐ Knowledge transfer is required upon exit
• ☐ Liability cap is reasonable (3-6x monthly fees for indirect damages)
• ☐ Insurance requirements are documented with proof provided
• ☐ Payment terms are clear (amount, timing, overage rates)
• ☐ Expenses are capped or require pre-approval
• ☐ Contract is governed by UK law (England and Wales or Scotland as appropriate)
• ☐ Dispute resolution process is documented

Red Flags to Watch For

• ☐ No vague deliverables or "as needed" language without boundaries
• ☐ No large upfront payments (more than 1-2 months)
• ☐ No long minimum terms (12+ months) without good reason
• ☐ No large termination penalties (more than 1-2 months fees)
• ☐ No retained IP rights for the consultant on your work product
• ☐ No weak confidentiality (less than 3 years)
• ☐ No unlimited expenses without caps or approval requirements
• ☐ No missing conflict of interest clauses
• ☐ No unrealistic availability promises ("always available 24/7")
• ☐ No auto-renewal without notice period

Final Steps

• ☐ Had a solicitor review the contract (especially IP and liability clauses)
• ☐ Negotiated any concerning terms identified in review
• ☐ Both parties agree on the same understanding of scope, deliverables, and success metrics
• ☐ Requested proof of insurance and verified coverage amounts
• ☐ Documented the working relationship expectations (communication cadence, meeting schedule, reporting)
• ☐ Established clear success metrics for first 90 days
• ☐ Agreed on monthly performance review process

---

What to Do If You're Already Locked Into a Bad Contract

If you've already signed a contract and realised it has problematic terms, here's what you can do:

Review Your Actual Contract

• Read the termination clause carefully - what's the actual notice period and penalty?
• Check if there's a termination for cause clause you could invoke if performance is poor
• Look for any material breach by the consultant that gives you exit rights
• Check if there's a probation period or initial term that's ending soon

Document Performance Issues

• Start documenting any missed commitments, slow responses, or quality issues
• Keep a log of communication (when you messaged, when they responded)
• Document any deliverables that were promised but not delivered
• This creates a paper trail if you need to invoke termination for cause

Have an Honest Conversation

• Most consultants will let you out of a contract if the relationship isn't working
• Schedule a meeting and be direct: "This engagement isn't delivering the value we expected"
• Propose a mutual agreement to terminate early with reasonable notice (30-60 days)
• Offer to pay for knowledge transfer time to make the transition smooth

Negotiate an Amendment

• If the work is good but the terms are onerous, propose amending the contract
• Request changes to notice period, scope, IP ownership, or other specific clauses
• Most professionals will negotiate if you're otherwise happy with the work

Legal Options (Last Resort)

• Consult a solicitor about whether the contract is enforceable
• Some penalty clauses may be unenforceable under UK law if unreasonable
• If there's been material breach, you may have grounds for immediate termination
• Legal action is expensive and time-consuming - better to negotiate a mutual exit

---

Summary: Don't Sign Until You've Asked These Questions

The 10 questions covered in this guide reveal whether a fractional CTO engagement will actually work:

1. Guaranteed hours and flexibility - ensures you get the time you're paying for
2. Response time commitments - critical for urgent issues
3. Other clients and conflicts - reveals if they're overcommitted or working with competitors
4. Competing priority handling - shows their professionalism and communication
5. IP ownership - protects your business interests
6. Public disclosure limits - maintains confidentiality where needed
7. Exit terms and notice period - ensures you're not locked in if it's not working
8. Performance issue process - reveals whether they're defensive or collaborative
9. References from similar businesses - validates their track record
10. Insurance and liability - protects both parties if problems arise

Fair UK market terms in 2025:

• 1-3 month initial commitment, then 30-day rolling notice period
• All work product assigned to you as IP immediately upon creation
• Response times documented: 2-4 hours for emergencies, 24 hours for routine
• Professional Indemnity Insurance of £500K-2M
• Liability cap of 3-6x monthly fees for indirect damages
• Clear conflict of interest and confidentiality protections
• No large upfront payments or unreasonable termination penalties

Red flags that should make you walk away:

• 12+ month minimum term with large early termination penalties
• Vague deliverables with no success metrics or performance reviews
• No IP assignment or weak confidentiality (less than 3 years)
• Won't provide references or all references are 3+ years old
• No insurance or won't provide proof of coverage
• Defensive about performance questions or conflicts of interest
• Working with your direct competitors without disclosure

The Birmingham company that didn't ask these questions wasted £18,000 and 6 months. The Manchester SaaS company that used this checklist negotiated better terms, had clear performance expectations, and achieved £120,000 in cost savings in the first year.

The contract conversation isn't adversarial - it's collaborative. A good fractional CTO wants clear expectations, defined success metrics, and mutual protections. If they're defensive about any of these questions, that's your signal to keep looking.

---

Next Steps

If you're about to sign a fractional CTO contract:

1. Use the 10 questions in your final conversation before signing
2. Check their answers against the green/yellow/red flags in this guide
3. Review the contract using the final checklist section
4. Get references and ask the specific questions provided
5. Have a solicitor review the IP, liability, and termination clauses at minimum
6. Negotiate any terms that don't match UK market standards
7. Document expectations for the first 90 days before you start

Don't rush the contract phase. An extra week of due diligence can save you months of frustration and tens of thousands of pounds in wasted fees.

Need help evaluating a fractional CTO contract? Book a free 30-minute contract review call where we'll review your contract against UK market standards and identify any concerning terms.