IT Contracts CONTRACTUAL ISSUES - INCLUDING LIMITS OF LIABILITY AND WARRANTIES 10 October 2001

DLA – IT LAW FIRM OF THE YEAR Insider's Guides to IT & Telecoms 2000 Peter Brook Associate DLA India Buildings Water Street Liverpool L2 ONH Tel: 0151 237 4782 Fax: 0151 237 4890 E-mail: [email_address] David Worrall Solicitor DLA India Buildings Water Street Liverpool L2 ONH Tel: 0151 237 4739 Fax: 0151 237 4890 E-mail: [email_address]

Peter Brook

Associate

DLA

India Buildings

Water Street

Liverpool

L2 ONH

Tel: 0151 237 4782

Fax: 0151 237 4890

E-mail:

[email_address]

David Worrall

Solicitor

DLA

India Buildings

Water Street

Liverpool

L2 ONH

Tel: 0151 237 4739

Fax: 0151 237 4890

E-mail:

[email_address]

Problem? What Problem? In a 5 year period: 73% had problems with their computer system 35% had system crashes 60% had to to call back their suppliers

In a 5 year period:

73% had problems with their computer system

35% had system crashes

60% had to to call back their suppliers

Common Problems Parties don't appreciate the complexity Users fail to produce a proper specification Vendors oversell Requirements change during implemenation

Parties don't appreciate the complexity

Users fail to produce a proper specification

Vendors oversell

Requirements change during implemenation

Contract or not to Contract Contracting or not at the wrong time can cause problems A contract is created If an offer Unconditionally accepted Consideration Intention

Contracting or not at the wrong time can cause problems

A contract is created

If an offer

Unconditionally accepted

Consideration

Intention

Using your Lawyer Effectively Early Instructions Need not be expensive Tender assessment

Early Instructions

Need not be expensive

Tender assessment

Check What is in Writing Question the contract Tidy doesn't mean correct Watch for entire agreement clauses

Question the contract

Tidy doesn't mean correct

Watch for entire agreement clauses

What should go into the contract? Detail Certainty Looking ahead

Detail

Certainty

Looking ahead

Parties Who should sign? Associated companies?

Who should sign?

Associated companies?

Rights in Software Ownership? Licence Terms? Assignability Restrictions

Ownership?

Licence Terms?

Assignability

Restrictions

Specification As much thought and details as possible – worthwhile effort Ensure warranties are given

As much thought and details as possible – worthwhile effort

Ensure warranties are given

Staff Ensure key individuals are named

Ensure key individuals are named

Timetable Agree one!! Specify reduction in price if late?

Agree one!!

Specify reduction in price if late?

Staged Payments Use staged payments as an incentive

Use staged payments as an incentive

Quality Warranties as to quality, skill etc Misuse of third party's rights

Warranties as to quality, skill etc

Misuse of third party's rights

Maintenance Agree at the outset As much detail as possible Service levels, duration etc.

Agree at the outset

As much detail as possible

Service levels, duration etc.

Escrow Place source code with independent third party ("Escrow") Trigger release on e.g. insolvency

Place source code with independent third party ("Escrow")

Trigger release on e.g. insolvency

DLA – IT LAW FIRM OF THE YEAR Insider's Guides to IT & Telecoms 2000 Peter Brook Associate DLA India Buildings Water Street Liverpool L2 ONH Tel: 0151 237 4782 Fax: 0151 237 4890 E-mail: [email_address] David Worrall Solicitor DLA India Buildings Water Street Liverpool L2 ONH Tel: 0151 237 4739 Fax: 0151 237 4890 E-mail: [email_address]

Peter Brook

Associate

DLA

India Buildings

Water Street

Liverpool

L2 ONH

Tel: 0151 237 4782

Fax: 0151 237 4890

E-mail:

[email_address]

David Worrall

Solicitor

DLA

India Buildings

Water Street

Liverpool

L2 ONH

Tel: 0151 237 4739

Fax: 0151 237 4890

E-mail:

[email_address]