Canada: The Dangers Of Patio Thinking

Last Updated: September 29 2016
Article by Lisa R. Lifshitz

Is there anything better than being outside and enjoying these record hot temperatures?  Facing the prospect of cold, dark winters, most Canadians feel perfectly justified maximizing their patio time during our short summer months. However, the race to get deals done sometimes leads to some short-sighted decisions that have long-term consequences for clients. The following are mistakes I have recently observed in the rush to exit the office and enjoy a cold one.

Deadly discounts

The siren call of favourable pricing sometimes makes the most rational businessperson ignore even the most critical deal red flags. Some vendors count on this and act unscrupulously, declaring that the transaction must be signed by the end of a particular month or else the promised deep-deal discounts will be lost. Critical representations, warranties, indemnities and other key contractual clauses, including service levels, are sacrificed in the name of "business efficiency." 

I have seen clients sign the "wrong" type of legal agreement just to make certain there is a signature on a piece of paper somewhere by midnight of the deadline date. After all, the contract can always be amended, right? Three words come to mind here: Don't do it. Better vendors don't resort to these cheap ploys, and if a company is rushing you to sign something without allowing adequate negotiation time, there is probably a (bad) reason.

Why them? 

When I negotiate for a client facing a difficult vendor that has very one-sided, unfavourable legal agreements, I sometimes (politely) ask: What made you choose this particular vendor? Was it because of its stellar reputation in the marketplace? Market share? References? The answers sometimes surprise me: Because someone in the IT department once worked there. Because someone at the board table is related to the vendor's CEO. Because of the (usually mistaken) conviction that there is absolutely "no one else who can provide this service, bar none." 

From my perspective, none of the above is a good reason. Unless there are other compelling reasons, conducting effective vendor due diligence can prove highly advantageous in critical technology deals. It is true that this process can take considerable time and effort if the purchaser enters into a detailed procurement process, complete with applicable risk assessments, of its prospective vendors in order to ensure that its business and regulatory requirements can be met. Some clients find this process difficult given that they even have trouble formulating objective criteria. However, it's much better to spend the time at the front end of a deal to objectively evaluate and chose an effective vendor than to rely on the connection of your brother-in-law twice removed to provide guidance as he may no longer be around if the vendor fails to perform. And, yes, reviewing the short-listed vendors' standard legal contract(s) should also form part of this due diligence effort since choosing a vendor with very unbalanced commercial agreements as an initial starting position will often be a harbinger of difficult negotiations to come.

Know thyself

Related to the above, before a client can purchase a new technology solution and choose the right vendor, it needs to have a very firm understanding of the problems it is trying to solve by acquiring the new technology system, its budget and risk tolerance. For example, if a client is looking to leverage the efficiencies of cloud computing services, it needs to research and decide upon the appropriate cloud model (private, public, hybrid), service offering (SaaS, PaaS, IaaS), the nature (and appropriateness) of the company data it wishes to put into the vendor's cloud, and any legal (provincial, federal, international, industry-specific) regulatory requirements applicable to its industry/channel and data, all of which will by definition impact its choice of vendor. For example, is the cloud vendor expected to support critical customer operations and will direct access to client information be required? If so, the customer will likely require a sophisticated cloud vendor with appropriate security policies in place, incident response and disaster recovery procedures and strong compliance programs. Financial institutions and regulated health-care custodians will require a different kind of cloud vendor rather than some smaller not-for-profit entities. A client that wishes to put very sensitive personal health information or financial data into the cloud must understand that that the least expensive option may not be appropriate given potential security risks and cyber-liability concerns. 

Purchasers also have to have a detailed understanding of any solution that they wish to acquire. Where will system/data be located? Will the vendor use third-party contractors and subcontractors to manage key elements? Does the prospective vendor currently possess a comprehensive security program including physical controls, logical controls, vulnerability management and threat assessment/intelligence monitoring? Does the vendor meet certain cloud privacy and security standards such as ISO/IEC 27018:2014 or other standards? There must be alignment between what the customer is expected to pay and what it is looking for from its cloud provider regarding security, 24-7 support, privacy protections, etc. Remember, your chosen vendor is not your psychiatrist — you cannot expect it to solve all of your organization's problems, and certainly the more services that you ask for the more it will cost.   

Magical Thinking

It appears that snappy presentations and slick power point presentations do sometimes appear to play a decisive role in the choice of a vendor, and some purchasers unduly rely on vendor promises, whether oral or written (but not within the deal documents themselves), without asking sufficiently detailed delivery questions (and seeking additional backup information). I think of this as "magical thinking" — the idea that everything is just somehow going to "work out," largely based on perceived deal "goodwill," without having to get too much into the weeds. 

Thinking of choosing an American vendor located in Texas or Arkansas to provide a multilingual platform and helpdesk? Just how will this company ensure that these language requirements will be met? Does the vendor have experience delivering on these requests or will this be a custom job where those requirements may lead to actual delays in practice? 

What about support services? Yes, the slides mention that the vendor already has a robust helpdesk service in place and will be providing support, but does this support automatically include Level 1 (basic) support services or is there actually an unspoken expectation that this duty will fall upon the purchaser, necessitating additional costs for the client? If the purchaser is national, what time in Newfoundland or British Columbia can it expect support services to begin if the service is not 24/7? Where will support services be provided? If they are going to be provided outside of Canada by third-party contractors and subvendors, what are the privacy/security implications? Will these third-party contractors and subvendors be sufficiently bound through a contract to meet the purchaser's regulatory and legal requirements vis-à-vis privacy and security, not to mention service levels? Will prices quoted for support be impacted by currency fluctuations and hedging requirements? Can the client leverage the vendor's existing support structures or will separate teams be required for the client? If the technology implementation includes a customization/configuration build phase, will the vendor expect the client to pay the full spectrum of support fees during the pre-build phase? If the proposed vendor's solution is built on top of another vendor's existing technology platform, how much responsibility will the proposed vendor take for meeting certain response/resolution times, overall service levels and performance requirements given its inherent dependencies on the other vendor's underlying technology and systems? The devil really is in the details.

Keep cool, stay hydrated and have a great rest of the summer.

Originally published on Canadian Lawyer Online - IT Girl Column

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Lisa R. Lifshitz
Similar Articles
Relevancy Powered by MondaqAI
Torkin Manes LLP
Torkin Manes LLP
Torkin Manes LLP
Torkin Manes LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Torkin Manes LLP
Torkin Manes LLP
Torkin Manes LLP
Torkin Manes LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions