Nobody likes IT services contracts. They're long,
boring and complicated. But yes, you need them. Here are our Top 5
tips for what yours should cover.
Who owns what? Unless you're renting out
your hardware, if your customer has paid for it, it makes sense for
them to own it too. But most hardware won't work without
software, and the software you provide contains valuable IP rights.
Make sure you don't pass on your ownership rights in the
software to your customer, a limited licence to use is
What are you actually providing? It's
important to set out clearly what you are and aren't providing.
This enables you to negotiate further fees if your customer
requests things outside the original scope (you should also have a
good change request process).
Should I agree to put my software in escrow?
While keeping your crown jewels to yourself is preferred, escrow
makes sense from your customer's point of view if the software
is critical to the functioning of their business. The risk of
exposing your technology to your customer can easily be reduced by
imposing restrictions on when and how the software will be
What happens on termination? Alas, all good
things come to an end. Consider whether you need a transition
period for your customer to move their services. How long will this
period be? What will you charge for your assistance? Also, make
sure that the customer returns the stuff that you own (especially
I warrant that... If you're going to
provide warranties, make sure they are true! In any case, you
should tie any warranties back to documentation or specifications
that you provide to the customer, and make sure that the warranties
have an expiry date.
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