Twelve clauses that decide whether a colocation contract protects you or the host. A checklist for fleet owners placing hardware with a third party.
Most hosting agreements are written by the host. That is normal, and it is not by itself a problem. It does mean the document starts from the host's risks, not yours, and the gaps that matter are usually the ones nobody wrote down.
Below is the list we would work through if we were the ones placing hardware. It is ordered roughly by how expensive the mistake is.
1. How the power reaches the site
Ask how the power reaches the site and who holds the energy contract along the way. Whether that is the host itself, a landlord or a partner, ask how the arrangement is secured and what happens if it changes. A host that knows its supply chain can tell you the terms.
2. What "capacity" means in the document
Announced capacity, energised capacity and available capacity are three different numbers. Make sure the agreement states which one you are buying, in kW at the rack or container, and at what voltage and phase. A number in a brochure is not a commitment.
3. The curtailment clause
Curtailment is the part of the contract that decides your real annual output. Look for four things: who can call a curtailment, on what notice, whether there is an annual cap in hours, and whether curtailed hours are billed. A cheap rate with uncapped curtailment can produce fewer coins per year than a higher rate with a firm cap.
4. How the rate is built
A single number per kilowatt hour is rarely the whole picture. Ask for the breakdown: energy, transmission and distribution, taxes and levies, operations and margin, and anything indexed to a market price. Then ask which of those can change during the term, and with what notice. If the answer is that everything can change, you do not have a price, you have an estimate.
5. Minimum term and exit
Two clauses interact here: the minimum term and what happens if you want out early. Some agreements bind you for a year but let the host terminate on short notice, which is not symmetric. Read the termination section from both sides and check that the notice periods match.
6. What happens to your machines at the end
Decommissioning is boring until it is urgent. The agreement should say who packs, who ships, who pays, and how long the host will hold hardware after the term ends. It should also say what happens if you fall behind on payment. Hardware liens are common; read that clause before you sign, not after.
7. Remote hands: scope and response
"Remote hands" means very different things to different operators. Pin down what is included in the base rate, what is billed separately, and what the response time is during and outside business hours. A reboot within four hours and a reboot within four days are both defensible commitments. Only one of them is useful.
8. Monitoring and what you can see yourself
You should be able to see power draw, temperature and status per unit without asking anyone. If the host cannot give you that, you are relying on their reporting for a fleet you own. Ask whether the data is live or a periodic export, and whether you keep access to history.
9. Change management
Infrastructure work happens. The question is whether it happens to you or with you. Look for a written procedure: notice before planned work, a rollback plan, and notification after unplanned events. Hosts that run to a written standard usually put it in the contract without being asked.
10. Insurance and liability
Two separate questions. First, what is the host liable for, and what is capped or excluded. Second, who insures the hardware itself, and against what. In most agreements the host is not the insurer of your machines. That is a defensible position, but you should know it before your first incident, not during it.
11. Who signs
Confirm which entity signs, which obligations it carries itself and which it arranges through partners. A quick check of the corporate registry costs nothing and occasionally changes the conversation.
12. Availability
Ask for the availability level, the point where it is measured, what is excluded, the period it is averaged over, and the remedy if it is missed. A percentage without those five parts is a description, not a commitment. Our piece on uptime and availability sets out the difference between what the host delivers and what your machines run.
You do not need a lawyer to start. Work through the list, write the answers down, and see which questions the host answers with a document and which with a reassurance. The pattern of the answers usually tells you more than the answers themselves.
If you want to see how we answer them, the hosting page covers what is included, our ASIC colocation page draws the line between what we provide and what stays with you, and our commitments are written down rather than described. Short answers to the common questions are collected in our FAQ.
