What to Look for in a Colocation Contract: A Buyer's Checklist

Colocation contracts are long, provider-drafted, and full of terms that favor the facility. This guide covers every clause that matters: term length, auto-renewal windows, exit rights, what's negotiable, and the red flags that signal a bad provider.

Key Contract Sections

• Term, auto-renewal periods, and opt-out notice windows (typically 60–180 days)
• Termination for convenience and exit fee structures
• What's negotiable: power rate locks, free months, SLA credit caps, expansion rights
• Force majeure carve-outs that can void SLA credits for events redundant infrastructure should handle
• SLA exclusions: scheduled maintenance, scope limitations, credit claim process requirements
• Bandwidth overage math: 95th percentile billing, overage rates, committed vs. metered models
• MSA vs SOW: how the master agreement and service orders interact, and which governs in a conflict
• 5 red flags: uptime SLA below 99.9%, credit caps at 5% or less, unilateral rate increases, no audit rights, broad data access clauses

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