Negotiating Technology Contracts, Second Edition

The title is written with the benefit of DLA Piper’s unparalleled view of the global market for technology sourcing and outsourcing projects, and from acting for customers and service providers in this space over many years and in many jurisdictions.

Technology underpins everything we do, and the contracts which underpin the delivery of technology-related services are important from both an economic and social perspective. Negotiating technology-related contracts can, however, be challenging: for the uninitiated or uninformed, the significance of the points under discussion may be unclear, confusing and often at odds with the outcomes one might expect in more traditional ‘bricks and mortar’-style contracts.To avoid unnecessarily protracted negotiations, it is essential to have a clear understanding of: (i) what each part of a technology-related contract is designed to deal with; (ii) what the customer and service provider seek to protect; and (iii) what solutions or compromises are available.This second edition provides a practical, commercial guide to negotiations without a heavy focus on ‘black letter law’, and seeks to explain the perspectives of both sides of the negotiating table on a clause-by-clause basis, clearly setting out the key points they will want to protect – and why – while also offering suggestions as to what they may be willing to concede or compromise upon. It is written with the benefit of DLA Piper’s unparalleled view of the global market for technology sourcing and outsourcing projects, and from acting for customers and service providers in this space over many years and in many jurisdictions.Chapters cover the common negotiating ‘battlefields’, from service descriptions and service levels through to warranties, indemnities, liability provisions and termination rights. The authors also examine issues associated with particular technology-related engagements, such as those based on agile methodologies, those involving the use of AI-based solutions, or those operating within heavily regulated sectors.This edition will be of interest to anyone involved in technology-related contracts, whether acting for the buy side or sell side, and whether working within law firms or legal departments or more general commercial functions who have a need to understand the way in which such contracts work.

Introduction _________________ 71. Due diligence in outsourcing arrangements____________ 111. Introduction...............................................112. The customer perspective.....................................................173. The service provider perspective.....................................................214. Potential solutions .........................255. Conclusion...................................................272. Service provisions ______ 291. Introduction...............................................292. The customer perspective.....................................................303. The service provider perspective.....................................................344. Potential solutions .........................373. Compliance with laws and regulations_________ 411. Introduction...............................................412. The customer perspective.....................................................423. The service provider perspective.....................................................464. Potential compromises...........494. Service level agreements _____________ 551. Introduction...............................................552. Service level models...................................................................563. The customer perspective.....................................................584. The service provider perspective.....................................................635. Potential solutions .........................685. Use of agile methodologies __________ 731. Introduction...............................................732. The customer perspective.....................................................803. The service provider perspective.....................................................814. Potential solutions .........................816. Warranties ______________ 871. Introduction...............................................872. The customer perspective.....................................................883. The service provider perspective.....................................................924. Potential compromises.............................................977. Relief/excused events __________________ 1031. Introduction..........................................1032. The customer perspective................................................1053. The service provider perspective................................................1074. Potential solutions ....................1088. Intellectual property provisions______________ 1111. Introduction..........................................1112. The customer perspective................................................1133. The service provider perspective................................................1164. Potential solutions ....................1189. Data protection liabilities_______________ 1231. Introduction..........................................1232. The customer perspective................................................1243. The service provider perspective................................................1264. Potential solutions ....................12810. Benchmarking in outsourcing transactions ___________ 1331. Introduction..........................................1332. The customer perspective................................................1373. The service provider perspective................................................1384. Potential solutions ....................13911. Setting limits of liability ________________ 1431. Introduction..........................................1432. The customer perspective................................................1483. The service provider perspective................................................1504. Potential solutions ....................15212. Excluded liabilities ____ 1551. Introduction..........................................1552. The customer perspective................................................1563. The service provider perspective................................................1574. Potential solutions ....................16013. Unlimited liabilities_______________ 1651. Introduction..........................................1652. The customer perspective................................................1653. The service provider perspective................................................1704. Potential compromises........................................17514. TUPE in outsourcing agreements ____________ 1811. Introduction..........................................1812. The customer perspective................................................1863. The service provider perspective................................................1894. Potential solutions ....................19115. Termination rights ____ 1971. Introduction..........................................1972. The customer perspective................................................1983. The service provider perspective................................................2044. Potential solutions ....................20616. Step-in provisions _____ 2111. Introduction..........................................2112. The customer perspective................................................2123. The service provider perspective................................................2154. Potential solutions ....................21917. Audit rights____________ 2211. Introduction..........................................2212. The customer perspective................................................2223. The service provider perspective................................................2244. Potential solutions ....................22718. Dispute resolution provisions______________ 2331. Introduction..........................................2332. The customer perspective................................................2333. The service provider perspective................................................2384. Potential solutions ....................24019. Negotiation in practice ________________ 2411. Background.............................................2412. Initial considerations ...........2423. The procurement process..............................................................2434. Key contract aspirations of the parties.........................................2465. Likely areas for key debate and potential solutions.......................................................24920. Contracting for new and complex technology _____________ 2551. Introduction..........................................2552. The European approach......................................................2573. The UK approach.........................2594. The US approach..........................2595. Common ground.........................2606. Contractual provisions...................................................2617. How does AI work?...................2618. Description of functionality.........................................2629. Intellectual property..............26210.Bias..........................................................................26411.Explainability......................................26512.Service performance...............26613.Liability..........................................................26714.Termination...........................................26815.Exit..........................................................................26921. Types of technology contract________________ 2711. Introduction..........................................2712. Software licence..............................2713. Software maintenance........2724. Hardware provision.................2735. Hardware maintenance.........................................2736. Cloud services....................................2747. Outsourced/managed service............................2748. Website/online terms....................................................................2759. Telco/network services.............................................................27510.IP transfers and joint ventures.........................................................27511.Technology-related consultancy services...............27522. Cloud services__________ 2771. Introduction..........................................2772. The customer perspective................................................2783. The service provider perspective................................................2824. Potential solutions ....................28423. Regulated procurement___________ 2891. Regulated procurement in the public sector..................2892. Regulated procurement in the financial services sector...................................................................29624. Managing contract disputes ________________ 3031. Introduction..........................................3032. Causes of contract disputes...........................................................3033. Managing disputes....................307Conclusion ________________ 315About the authors_________ 319Index ______________________ 321About Globe Law and Business ___________________ 329