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Tech Contracts Unveiled: Navigating Legal Considerations for a Successful Partnership with Tech Providers

Key take aways

  • Companies engaging in technology contracts will encounter a matrix of legal considerations often specific to the technology industry.
  • Navigating legal as well as commercial considerations in technology contracts will help ensure a successful partnership with technology providers.
  • The importance of understanding industry and market practice in technology contracts should never be underestimated.
  • Obtaining legal advice early from a lawyer experienced in technology contracts is always advised.

1. Defined objectives


Articulate your company’s objectives and expected outcomes. Ensure technology contracts align with the strategic goals of your company, creating shared expectations of the project’s purpose.

2. Scalability and flexibility


Anticipate future growth and technological advancements in technology contracts as far as possible. Build scalability and flexibility to accommodate the evolving needs of your company, minimising the risk of frequent renegotiations. For example, include provisions that require the technology provider to scale up resources to facilitate any increased usage by your customers.

3. Service levels


Prioritise service level agreements that set performance benchmarks, uptime guarantees and support response times. Establishing measurable criteria in technology contracts ensures accountability and provides a basis for assessing the technology provider’s performance.

4. Data security and privacy


Emphasise strict data security and privacy provisions in technology contracts. Define how sensitive information will be handled, stored and protected, ensuring compliance with applicable data and privacy protection laws.

5. Intellectual property ownership


Address ownership of intellectual property rights, particularly in respect of custom-developed solutions. Stipulate which party retains ownership of intellectual property in technology contracts and establish licensing terms if needed.

6. Cost and payment terms


Ensure transparency in cost structures and payment terms in technology contracts. Outline the total cost of services, any additional fees and the payment schedule to help prevent unexpected financial burdens on your company.

7. Vendor lock-in mechanisms


Seek to guard against vendor lock-in mechanisms by including provisions that facilitate the transition of services or data to another provider if needed. Resisting these mechanisms in technology contracts will help ensure your company maintains control and flexibility in its technology ecosystem.

8. Support and maintenance


Define the scope and terms of support and maintenance services in technology contracts. Specify response times, update schedules and any associated costs, ensuring that your company receives timely and reliable assistance.

9. Regulatory compliance


Address regulatory compliance requirements relevant to your company’s industry. Expressly outline how the technology provider will assist in meeting these obligations in technology contracts, minimising legal risks.

10. Exit strategies and termination


Establish clear exit strategies and termination provisions in technology contracts. Define the conditions under which a party can terminate the technology contract, any associated penalties and the process for transitioning services or data.



By prioritising key legal considerations and obtaining experienced legal advice early, companies can enter into technology contracts with increased confidence that technology contracts are tailored to their unique needs and positioning them for a successful and adaptive partnership with technology providers.

Contact mdp Law today to discuss your business requirements.

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Francesca Senda

Francesca Senda is a commercial and corporate lawyer with an entrepreneur’s eye for opportunity who helps clients realise their strategic objectives. She has a keen interest in technology and negotiating technology-based contracts.

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