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OWNING and managing a business in the 21st century usually involves a significant degree of reliance on information technology, regardless of sector or industry. Many businesses are now seeing their IT infrastructure as a fundamental and indispensable cornerstone of their operations.
It is vital that you have a good handle on your IT contracts. You must make sure that your contracts protect you against liabilities and allow smooth delivery of information technology throughout your business.
“It is so important to know exactly what you are signing when you enter into a software contract for your business,” says Tom Bodkin, a partner at Borneo Martell Turner Coulston. “There are so many areas where you can get caught out if you are not careful, so it is wise to appoint an expert solicitor to review your IT contracts before you commit.”
Tom discusses key areas to look out for when an IT service provider sends a new software agreement over to you for signing.
IT security questionnaire
You would not buy a business without asking a long series of questions and being comfortable with the answers. The same approach should apply to your IT service providers.
You should undertake sufficient due diligence to feel confident that you are not placing your organisation at risk by installing their software.
Limitation of liability
Many commentators say the most crucial parts of any contract are the limitation of liability clauses, and this is particularly the case with an IT contract.
You will need to know what is reasonable to ask for in terms of your service provider’s overall financial liability. It is common practice for this to be either represented as a fixed financial sum or as a multiple of annual fees payable, so that the liability cap is linked to the annual contract value.
Service Level Agreement
The role of this agreement is to set out a framework of expectations with regards to maintenance and technical support windows and it will deal with the award of service credits to compensate for any service level failures.
How we can help
If you are looking for legal support in relation to an IT contract for your business, you should contact us without delay. Whether you require advice on contract terms or help with drafting amendments, then our lawyers will be happy to help.
For an informal conversation, please contact Tom Bodkin in the commercial team on 01604 622101 or email
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
