v1.0.0 to v1.0.0

---

name: commercial-policy

description: >

Commercial policy: the governance framework defining what terms sales can offer

and what triggers approval. Use when authoring a policy charter, defining

discount/payment/liability rules, auditing deals, or generating a regional policy.

license: MIT + Commons Clause

metadata:

version: 1.0.0

author: borghei

category: commercial

domain: business-growth

updated: 2026-05-27

tags: [commercial-policy, governance, contract-policy, pricing-policy, sales-governance, deal-policy, gtm]

---

# Commercial Policy

End-to-end commercial-policy authoring and governance: defining the rules that govern what sales can offer, what triggers approval, and what's prohibited. Pairs with our deal-desk (operational enforcement) and pricing-strategy (price-setting) skills — this is the policy that those execute against.

A good commercial policy:

- Makes deal-desk faster (fewer ambiguous cases)

- Makes sales reps more autonomous (clearer authority)

- Makes legal reviews lighter (most cases already covered)

- Reduces concession drift over time

- Provides audit-ready governance documentation

---

## When to use this skill

| Situation | Skill applies |

|-----------|---------------|

| Authoring commercial policy from scratch | Yes — start with **policy charter template** + `scripts/commercial_policy_generator.py` |

| Refreshing an existing policy (annual) | Yes — see **annual policy review** workflow |

| Auditing recent deals for policy compliance | Yes — `scripts/policy_compliance_checker.py` |

| Analyzing terms-deviation patterns | Yes — `scripts/terms_deviation_analyzer.py` |

| Tailoring policy for new region / vertical | Yes — `scripts/commercial_policy_generator.py --region <X>` |

| Drafting sales training on policy | Yes — see **training section** |

| Setting prices (not policy on deviations) | Use `business-growth/pricing-strategy` |

| Per-deal approval | Use `business-growth/deal-desk` |

| Writing the specific contract | Use `business-growth/contract-and-proposal-writer` |

---

## What commercial policy covers

Standard scope:

| Domain | Policy area |

|--------|-------------|

| **Pricing** | Standard pricing, discount thresholds, MFN, rebates, custom-bundle pricing |

| **Contract** | Standard term length, payment terms, renewal terms, termination, customer audit rights |

| **Legal** | Acceptable MSA modifications, liability cap, indemnification, jurisdiction, IP |

| **Operational** | SLA tiers, custom SLAs, security commitments, dedicated infrastructure |

| **Customer commitments** | Reference / case study / press release obligations |

| **Channel** | Partner discount tiers, channel-conflict rules, deal-registration |

| **Special terms** | Performance-based payment, acceptance criteria, ramp deals |

What it doesn't cover:

- Day-to-day pricing decisions (that's pricing strategy)

- Per-deal approval mechanics (that's deal-desk operations)

- Sales targets / quota (that's compensation policy)

- Customer success / churn-prevention tactics

---

## Commercial policy charter (template)

The foundational document. Every company that does $5M+ ARR needs one. Use this template:

```markdown

# Commercial Policy Charter

## Purpose

This Commercial Policy defines the rules that govern commercial terms

offered to customers. It is binding on all customer-facing functions

(Sales, Customer Success, Partner / Channel) and is enforced by Deal Desk.

## Scope

Applies to:

- All new customer agreements

- All renewals (with material change)

- All partner-mediated deals

- All custom / non-standard agreements

Does not apply to:

- Self-serve / PLG transactions per standard published terms

- Auto-renewals at standard terms

## Owners and Approvers

- Policy owner: CRO + CFO + General Counsel (jointly)

- Operational enforcement: Deal Desk

- Updates: quarterly review by policy owners

- Material changes: board awareness

## Pricing Policy

### Standard pricing

- All new customers offered at published list pricing

- Published price is canonical; deviations require approval per matrix

### Discount approval matrix

[Per the deal-desk approval matrix — see business-growth/deal-desk]

### Maximum allowed discount

- Standard maximum: 50%

- Beyond 50%: CEO + Board awareness required

- Discount > 60%: only with explicit strategic-rationale documented and CEO sign-off

### Most Favored Nation (MFN)

- Not granted by default

- Granted only with: strategic-tier customer + CRO + CFO + GC approval

- Always scoped narrowly: same product, same volume, same term length, same geography

- Disclosure-only (never automatic price-match)

### Rebates

- Performance-based rebates allowed per partner-program tier

- Customer-tier rebates: discouraged; if granted, time-bounded and explicit

## Contract Policy

### Standard term

- 12-month contract with annual prepay

- Auto-renew unless 90-day notice

### Term flexibility

- < 12 months: requires Director approval

- 24-36 months: Director approval

- > 36 months: VP Sales approval

- Multi-year discounts: per discount matrix

### Payment terms

- Standard: Net 30, annual prepay

- Net 45-60: Director approval

- Net 90+: CFO approval

- Custom milestone-based: CFO approval; revenue recognition impact reviewed

### Renewal

- Standard: auto-renew, same terms, same price (or per published renewal pricing)

- Renewal expansion > 20%: deal-desk review

- Renewal contraction > 10%: deal-desk review + customer success consultation

### Termination

- Standard: termination for convenience requires 90-day notice

- Termination for cause: 30-day cure period

- Customer-requested termination flexibility: Director approval

- Mid-term termination rights: VP Sales approval

## Legal Policy

### MSA modifications

- Pre-approved modifications: tracked list in approved-modifications appendix

- Custom modifications: General Counsel approval required

- Customer-supplied MSA: full GC review; default to push back to our MSA

### Liability cap

- Standard: 1x annual fees

- 2x annual fees: GC + CFO approval

- > 2x annual fees: CEO sign-off

- Carve-outs: IP infringement, gross negligence, willful misconduct — always uncapped

### Indemnification

- Standard mutual indemnification per template

- Customer-favorable indemnification: GC approval

- Defense / settlement control: vendor by default; customer-controlled needs CEO

### Jurisdiction and governing law

- Standard: vendor's jurisdiction

- Customer jurisdiction: GC approval

- Arbitration vs litigation: per template; deviations need GC

### IP

- Standard: each party retains pre-existing; joint inventions per default

- Customer-favorable IP terms: GC approval

- Source code escrow: only for OEM / strategic; never standard customer

## Operational Policy

### SLA tiers

- Standard published SLA (99.5%)

- Enhanced SLA (99.9%): per published pricing

- Custom SLA: Customer Success + Engineering approval; pricing premium per agreement

- Custom SLA with penalties: CRO + CCO + Engineering approval

### Security commitments

- Standard SOC 2 / ISO 27001 commitments per template

- Custom security: CISO + GC approval

- Customer audit rights: GC approval (limited to annual, with notice, third-party auditor)

### Dedicated infrastructure

- Not standard; available only with CTO + GC approval

- Premium pricing required

## Customer Commitments

### Reference / case study requests

- Standard: requested but not required

- Discounted deals (> 15%): case study or reference required as condition

- Strategic logos: explicit case study + press release commitment

## Channel Policy

### Partner-mediated deals

- Per Partner Agreement; discount per tier

- Deal registration governs conflict

- Direct rep authority same as direct deals on partner-led opportunities

## Special Terms

### Performance-based payment

- Payment-on-acceptance / acceptance criteria: CFO + GC approval

- Milestone payments: CFO approval

### Ramp deals

- ≤ 3 months: Sales Manager

- 3-12 months: Director

- > 12 months: VP Sales

### Source code escrow (for customer)

- Not standard; available only with CTO + GC approval

## Documentation Requirements

Every non-standard deal documented per Deal Desk packet template:

- Deviation explicitly listed

- Justification documented

- Approver identified

- Customer commitments (if any) explicit

- Expiration / conditions clear

## Annual Review

This policy is reviewed annually by CRO + CFO + GC.

Material changes communicated to sales with training.

## Effective Date

<date>

## Last Updated

<date>

## Approved By

- CRO: <signature>

- CFO: <signature>

- GC: <signature>

- Board (acknowledgement): <date>

```

See [references/commercial-policy-charter.md](references/commercial-policy-charter.md) for the full annotated charter with notes on each section's typical contentious issues.

---

## Discount and terms policy details

See [references/discount-and-terms-policy.md](references/discount-and-terms-policy.md) for deeper guidance on:

- Discount-percentage policy by ACV bracket

- MFN clause design (when to allow, how to scope)

- Performance-based rebate structures

- Multi-year discount mechanics

- Payment-term flexibility and revenue-recognition implications

- Renewal pricing policy (escalators, holds, contraction)

---

## Contract and commercial guardrails

See [references/contract-and-commercial-guardrails.md](references/contract-and-commercial-guardrails.md) for deeper guidance on:

- Acceptable MSA modifications (a list-based, not case-by-case approach)

- Liability cap negotiation

- Termination rights design

- IP and joint-development clauses

- Customer audit rights

- Cross-jurisdictional terms (EU vs US vs APAC)

---

## End-to-end workflows

### Workflow: Author commercial policy from scratch

1. **Assemble policy committee** — CRO + CFO + GC sponsors + Deal Desk Lead + Sales Operations

2. **Inventory current deals** — what terms have been offered? What's been ad-hoc?

3. **Identify policy gaps** — areas where ad-hoc behavior is hurting (concession drift, customer surprises)

4. **Draft charter** using template; one section per domain

5. **Internal review** — Sales VP, Eng VP, CISO, Customer Success VP, Finance for revenue recognition

6. **Pilot** with sales managers for 30 days — collect feedback

7. **Final approval** — CRO + CFO + GC sign-off; board awareness

8. **Sales training** — workshop + recorded session + quick-reference cards

9. **Publish** to sales wiki / partner portal / customer-facing communications team

10. **Quarterly review** thereafter

### Workflow: Refresh existing policy (annual)

1. **Pull deal data** for past 12 months: discount distribution, terms deviations, approvals

2. **Identify drift** — what's the deviation rate by policy category?

3. **Survey sales managers** — what's working / what's blocking

4. **Survey customers** — what terms have been requested but declined?

5. **Identify market shifts** — competitive landscape, customer expectations

6. **Draft amendments** — specific policy changes with rationale

7. **Approve** with CRO + CFO + GC

8. **Communicate changes** to sales with training

9. **Update charter** + effective date

### Workflow: Audit deal compliance

1. **Export deals** from CRM for the period

2. **Run compliance checker** — `scripts/policy_compliance_checker.py --deals deals.csv --policy policy.yaml`

3. **Review non-compliant deals** — investigate each: was the deviation approved? was it documented?

4. **Categorize**:

- Compliant with approved deviation: OK

- Non-compliant unapproved: investigate; corrective action

- Compliant but suggests policy gap: amend policy

5. **Report** to policy committee; track corrective actions

### Workflow: Generate region-specific policy

1. **Identify region-specific requirements** — currency, jurisdiction, payment norms, regulatory

2. **Run** `scripts/commercial_policy_generator.py --base policy.yaml --region <region>` to get base + regional overlay

3. **Tailor** further with local team (regional VP Sales, regional GC, regional CFO)

4. **Approve** through standard governance

5. **Communicate** to regional sales

---

## Anti-patterns

- **Policy without enforcement.** Written policy + ad-hoc execution = policy is theater.

- **Policy that's never updated.** Markets shift; competitive landscape changes; policy goes stale.

- **Policy with no compliance audit.** Without measurement, you can't tell if policy is followed.

- **Policy too restrictive.** When sales bypasses constantly, the policy is wrong; tighten or loosen.

- **Policy too lax.** When everyone "complies" but margin still erodes, policy doesn't constrain enough.

- **Policy authored without sales input.** Reps see it as imposed; comply minimally.

- **Policy with no training.** Reps don't know what they can offer; default to over-asking deal desk.

- **Policy that's a contract appendix.** Buried in legal docs; never read.

- **Same policy across regions** when market conditions differ substantially.

- **Policy reviewed only after a customer complaint.** Reactive only.

---

## Tooling outputs

| Script | Input | Output |

|--------|-------|--------|

| `scripts/policy_compliance_checker.py` | Deal CSV + policy YAML | Per-deal: compliant / non-compliant with policy violation listing; aggregate compliance metrics |

| `scripts/terms_deviation_analyzer.py` | Deal CSV | Deviation patterns: which terms most often deviate? from which standard? by what magnitude? |

| `scripts/commercial_policy_generator.py` | Base policy YAML + optional region overlay | Generated policy document (markdown), tailored to company stage, ICP, region |

All scripts: stdlib only, argparse CLI, JSON or markdown output.

---

## References

- [commercial-policy-charter.md](references/commercial-policy-charter.md) — full annotated charter with notes on each section

- [discount-and-terms-policy.md](references/discount-and-terms-policy.md) — discount, MFN, rebate, payment-terms policy depth

- [contract-and-commercial-guardrails.md](references/contract-and-commercial-guardrails.md) — MSA modifications, liability, termination, IP

---

## Related skills

- `business-growth/deal-desk` — operational enforcement of policy

- `business-growth/pricing-strategy` — sets prices that policy governs deviations from

- `business-growth/contract-and-proposal-writer` — drafts contracts respecting policy

- `business-growth/channel-economics` — channel deals subject to policy (with overlay for partners)

- `business-growth/partnerships-architect` — partnership terms subject to commercial-policy oversight

- `c-level-advisor/cs-cro-advisor` — CRO is co-owner of policy

- `c-level-advisor/cs-cfo-advisor` — CFO is co-owner of policy

- `ra-qm-team/soc2-compliance-expert` — policy compliance is audit-relevant evidence