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Contracts and Agreements in the IT industry – Perspective of a Legal Advisor

Morana Kaleb, Legal Advisor

An IT contract can be any contract that has at least some connection to the world of information technology. From my point of view, IT contracts are presently the most common legal documents.

We see different types of IT contracts daily, such as license agreements, subscription agreements, cooperation agreements, framework agreements, development services agreements, support and maintenance agreements, subcontractor agreements, SaaS (software as a service) agreements, etc. As a legal advisor with more than ten years of experience, much of it being in the IT industry, I believe that IT contracts need to be simple, strong, and understandable, but still well thought-out.

Each party to the contract must know what they want from the contract and what their obligations are. And they need to be sure.

Every dubious provision in any type of contract is very dangerous because you cannot imagine the consequences of contractual provision which is not unambiguous.

Common Mistakes

There are two very common mistakes regarding contracts in the IT industry.

IT managers often treat contracts as legal matters before business matters

They delegate the contract review to the corporate legal advisor who often has no specific IT knowledge. A legal review is essential, but lawyers often do not have the technical or operational background to evaluate IT contracts from a business perspective. A lawyer may not anticipate what could go wrong in software implementation, nor might they think to recommend a specific clause that could solve many problems. My recommendation is to read through every contract from a business perspective first, and then route the contract to the legal department for the final review.

IT managers want to solve all problems by using templates

That’s why they often think that templates can solve all their problems with contracts and the legal department. Templates are nothing more than guidelines for the essential content of the agreement. No two situations are the same, so templates are not grails. You must review every single agreement and make sure that it is exactly what you want. The legal department and the business must cooperate to do the best for their company. They must be partners rather than enemies, and they must have understanding for each other.

To sum up, business and legal must cooperate and understand each other to avoid tension between each other as well as to do the best for their companies. Teamwork is the only correct and possible way for preparing a good IT agreement.

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