Software contacts

You can find sample data clauses—real ones—at the TechContracts. Of course, not every data clause covers all these topics, and not every vendor will make detailed promises about them.

Customers ask for SaaS escrows because they worry the vendor will go out of business—and mission critical SaaS will evaporate. The parties solve the problem by giving the software running the SaaS app to an escrow agent, who will release it to the customer if the vendor goes under. Then the customer can run the SaaS offering itself. Or can it? Whenever I review a SaaS escrow for a customer client, I ask the vendor if the customer could actually use the software if it ever came out of escrow.

Could the customer install the software and run it as SaaS? Remember, with SaaS, the vendor keeps the software on its own computers and just gives the customer access , not copies. Make sure you have rights to access and back up the data, before and after trouble comes up. And consider better protections against vendor bankruptcy, like insurance requirements or financial reporting clauses, which give you a chance to review vendor books and records and, ideally, detect financial collapse in advance, when you have time to replace the vendor and save your data.

Again, the TechContracts. You can see typical exceptions at the TechContracts. But many customers fail to think this through. Most customers would be pretty stunned to find they have no indemnity covering those unavoidable combinations. The solution is a narrower exception. Or you might try something more complicated but a little more favorable to the vendor.

But the typical language eliminates any case related to your specifications. Why should the use of your specifications excuse the vendor in either case? You can solve this with a few simple words.

Everyone knows what those products are supposed to do, so their purchase contracts need little in terms of specifications. IT is adaptable and flexible. If the vendor is customizing software, the contract should have customized specifications, describing the features and functions you need.

Find them and read them. Write your own description of those missing functions. When you receive the estimate and contract to sign, the documents should include a cost for necessary materials.

Software contracts don't always include documentation around the design and build of the software. If you want this information included, you might need to request it from the company. Another important element in your custom software contract is the breakdown of the cost. Some contracts are simplified to the point that all you see is how the costs will be transferred, but the breakdown of the price should be more detailed.

The information included in the contract will ultimately drive the behavior of both parties throughout the project. Time and materials contracts are some of the most commonly used types of software contracts. This type of contract details how you will pay the software developer for the hours they spend on your software. This portion of the agreement ensures that the developer will be paid, even if the timeline for the project is longer than expected. The contract model for time and materials contracts has been around for years, helping to protect the developer if the project has a longer timeline.

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