Extras - Technology Contracts for Everyone: A Quick Checklist of Key IssuesBy Dennis Kennedy, Published on May 19, 2003
It still surprises me how many legal issues even a simple IT contract, software license or e-commerce agreement might raise. While the following is not a comprehensive list, focusing on these areas can help you put together a successful agreement.
Draft agreements often do not accurately reflect the deal
terms. Does language actually express your understanding? Are all deal points
included? Are the correct parties named?
The license grant sets the limits on your rights. It must
grant you what you need. Are all requested rights granted? Do the rights to
copy, modify or use remote access fit your needs? Have you secured rights for
affiliates, subsidiaries, independent contractors or third party consultants,
Failure to cover ownership rights will come back to haunt you.
Who owns the deliverables? Who owns any modifications or derivative works? Who
owns customer data?
In most cases, you should be able to get a warranty
that deliverables will perform in accordance with specifications. Have you
adequately set out your specifications?
Acceptance Testing and Exit Strategies
The optimism and confidence that you
have when entering an agreement can quickly disappear as deadlines are missed
and promises are not kept. How do you know the work is done? How do you get
out of the deal if things don't work out? When should you have termination
rights or get refunds? Should the vendor be obligated to help you transition
to a new provider?
Service Levels and Protection of Data
You care most about how good the
performance is, that customer service is readily available and that your data
is safe. Are the confidentiality obligations acceptable? Are there
requirements to backup and/or return data? Are there customer service
procedures and penalties? How about uptime and security requirements?
The first draft you see will definitely not be in your favor. Can terms be made mutual, deleted or made more fair?