Technology Contracts – What’s In Your Contract?

Almost every business is a party to at least one technology contract, such as a cloud service agreement, software license agreement, SaaS Agreement or a consulting agreement with a technology vendor.  It can be easy to overlook these agreements.  They are frequently printed in small font, can be difficult to read and may appear to contain nothing but “boilerplate” provisions.

But these contracts contain provisions that could significantly affect your business and should not be overlooked.  These agreements typically contain provisions concerning how your business’s most sensitive data will be handled, your ownership of certain intellectual property and your business’ potential exposure to liability.

The first draft of technology contracts is almost always very one-sided in favor of the technology vendor.  In addition, these agreements are often poorly written, contain vague and inconsistent terms and industry-specific jargon.  They often get signed without much in the way of a review.  As a result, many businesses may have signed contracts that may unnecessarily expose them to substantial liability or significantly disadvantage them in other ways.

Like any contract, these agreements must be read thoroughly to confirm that they accurately memorialize the parties’ intentions and business understanding.  Ideally, they should be reviewed by someone who has extensive experience in analyzing and preparing these agreements, someone who understands the practical impact of those provisions and someone who knows what is customary to be included.

DUGGAN BERTSCH has written and analyzed numerous technology contracts for its clients, and we have counseled our clients concerning the full range of technology issues, including the following:

  • Does the agreement accurately describe the services to be performed?
  • What representations and warranties about performance and other matters are customary?
  • Are the terms for renewing the agreement consistent with industry standards?
  • How will the technology vendor handle your data and what will happen to that data when the agreement expires?
  • Does your cloud service agreement include a provision that promises a minimum level of commitment for the availability of that service?  What are your remedies if that commitment is not met?
  • If the technology vendor creates intellectual property in the course of performing under the agreement, do you have any rights to that IP?
  • What is the full scope of your business’ potential liability under the agreement? What risks does the technology vendor assume?
  • What insurance is the technology vendor required to maintain?
  • Does the technology vendor have any obligations in the event of a data breach?  What would be your potential remedies?
  • What are the parties’ respective obligations for disaster recovery and business continuity in the event of a catastrophic event?

Of course, these are only a few examples of the important issues in technology contracts.

The current situation necessitates that each business do as much as it can protect all of its assets, including its digital assets, and limit its liability as much as possible.  If you would like to discuss any of these issues, your technology contracts or have someone with experience review your contracts, please contact Steve Shapiro, also available at (312) 263-8600.

Team Members: