Information Technology (IT) Contracts

Better technology vendor negotiations produce better contracts for a technology project, and contracts are negotiated contracts, either negotiated by vendors in response to
RFP’s and standard software license agreement that is offered to all the buyers of the product.

Different types of IT contracts are as follows:

1.        Product contracts – License and Warranties
These are contracts between the creator and buyer of a product. The contractual license agreement is, where the vendor gives the buyer the right to use the product. These
contracts are implied by law, as they are standard/generic contracts, where the buyer does not have to sign any contract as such. When the buyer buts the product, it is
automatically presumed and the contractual obligation is created that the buyer has accepted the contract, and he is the obligation to comply with the specific and general
terms and conditions of the contract.

2.        Contracts for the supply of products.

These contracts specify the price and terms under which the product is supplied to the buyer and such contracts are usually between a buyer and a software reseller of a
distributor.

3.        Contracts for the supply of services.
A vendor replies or fulfills the requirements of a buyer in response through Request for proposal (RFP) or Request for quotations (RFQ) for services.

There are different types of services:

  • One time Training services:
Is it going to be one time, wherein the company conducts standard or customized services for  your company/staff?
Or
  • One Time Deployment services:
Where company installs, configures hardware/software for your company  only once?
Or
  • Managed services
Where company manages your IT services for your company?
Or
  • Outsourced
Where company provides services that are managed outside the scope of
your company / remotely such as call centers in some other foreign country?
Or
  • Software Maintenance
Where in company provides maintenance of your software, either
domestically or remotely or internationally?

4.        Custom development

These are quite complicated contracts, where in the buyer and seller have to work together with their own specific needs and requirements, rights and responsibilities. There
are issues that have to be resolved such as intellectual property rights / ownership / royalty/ liabilities in case of default and others.

Cloud Computing contracts:

Cloud computing is very new and quite complicated. Both parties to the contracts have to pay special attention to contract terms, security requirement and other provisions.
No specific general/generic terms or conditions have been created as such, as it is a new kid on the block. But certain specific terms and conditions have to be considered in
cloud computing for service level agreements such as:

  • Who is liable for damages in the interruption / breakage in the system?

  • Where is the data actually being located? – domestic or overseas

  • How efficient service is available for data? What is the backup plan in case of default? Who is liable in such circumstances and to what extent?

  • What is the strategy and legal consequences/damages/liability if there is vendor services are locked in and what is the exit strategy? How is the buyer (vendor) protected
    in such a case?

  • What happens if the contract is terminated? What are the legal consequences?

  • Who owns the data and could it be supported for confidentiality and compliance/legal issues?

  • Who is responsible or liable if the service providers are changed? How does the transition works? Who is responsible / liable for intellectual property rights?

  • What are the grounds of termination of the contract? Who is liable and what extent? What are damages and consequences? Is it domestic or international? What laws
    govern in case of international vendor?

Contracts would apply at each stage of Software License:

Contracts and legal issues are of primary concern in the initial stages of software development. Main stages in software life cycle are as follows:
  • Requirements gathering and specification
  • Development
  • Sale and Delivery
  • Installation
  • Software Maintenance
  • Support
  • Intellectual Property Rights , such as Copyrights, Patents,
  • Software Licenses - GPL, LPGL, Apache, etc
  • Warranties
  • Maintenance Contracts
  • Software Support contracts
  • Managed Services Contracts
  • Software Development Contracts
  • Systems Integration Contracts
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