Technology is now a necessary and regular part of our everyday operations-from desktop computing to data processing, bar code labeling, medical and surgical applications, data management and data storage in the cloud. Individuals, companies, and our international economy are entirely dependent upon third-party software and technology-based solutions. Never before, have we as a society become so dependent upon technology.
Every use of third-party technology is governed by a contract-and you as a consumer, must at least know your rights and obligations under that contract. Most contracts for business applications are very long and extensive. Each contract is unique based on the technology and application but all allocate the rights, obligations, risks and liabilities assumed by the parties.
Although we are dependent upon such technology most people feel that they are bound by the terms of what seems to be a “form” license agreement or subscription agreement. Not true…These agreements, especially for business applications, are negotiable.
Professions such as doctors, lawyers and financial advisors must have complete guarantees of being able to keep data private and secure. Privacy laws change as does the technology-is this vendor going to create updates to complying with all current and future privacy laws in your industry? Companies must also be able to obtain the data in usable form during the term of the agreement and after the agreement has ended. Have you agreed to escrow the source code? Each one of these groups can be fined heavily by regulatory authorities if data is breached, and they can be subject to a civil suit for damages. Are you willing to allow the vendor to limit the amount they are liable for in the event it is not you or your employees that caused the breach?
What about when the technology fails to function properly? Are the warranties in your favor? How about the term and terms for testing, training, and acceptance? Did you pay for the technology upfront or did you hold back money to insure the technology implementation, and data transfer are satisfactory and complete?
Sometimes a software application is actually a joint venture between separate entities. What happens when shared intellectual property rights are in dispute? What happens when the vendor declares bankruptcy? Are you and your business out now in search of an alternative provider at significant expense?
All of these issues can and should be discussed upfront. They should be negotiated between you and the vendor as they can have a significant financial and perhaps a devastating impact on your company. Contact an attorney that can help you understand the implications, and negotiate terms to protect your rights, obligations, and remedies before you move forward.