Simple Rules for Negotiating Software and IT Contracts


Law has a number of different subcategories. Each subcategory has its own unique rules and best practices. The tech field, for instance, does not go by the rules of the medical field, and vice versa. Though all fields of business can indeed benefit from using helpful and safe tools like Loio legal software, the tech field has its own quirks.


There are common mistakes that firms and lawyers in the tech field make. We’ve gathered some of the most popular ones, as well as some ways to avoid them. Keep reading to find out what you can do to make your contracts more effective and protect your best interests.

Ask to delay the maintenance fees

When you just purchase a software solution, it can take months before you can actually start to use it at full force. Before that happens, the software company will need to perform some customization. In that time, you’re basically paying for the company to prepare the solution for you. Logically, you won’t need maintenance or support until months later. Why should you pay for it?

Sometimes maintenance and support are needed even during the customization period, so take it on a case-by-case basis. However, it doesn’t hurt to ask. Perhaps the software company can drop the maintenance fees until the go-live date. Then, when you start using the solution, the maintenance fees will be justified. Save yourself at least a month worth of fees!

Find hidden costs

The chances of you paying the price that you were initially offered are slim to none. You will always end up paying more than you think, and usually, that’s ok! As long as you know what you’re paying for, paying a little bit more or less doesn’t make much of a difference. However, not all vendors are 100% honest with their clients regarding their fees. They may include some hidden fees without asking you if you’re interested in purchasing that specific add-in and expect you not to notice.

Your job is to find all the hidden costs and make sure you don’t end up overpaying for the service, no matter how complex or simple. Ask the vendor to give you a clear overview of every single fee that goes into the final price. You might be surprised to find out that you were given a higher rate than initially agreed upon.

Know that an NDA doesn’t protect your data

Non-disclosure agreements have their own place in law. They are useful for trade secrets, working with celebrities, and business plans. However, they are not strong enough to protect your data. You can include an NDA in the contract for a different reason, but you shouldn’t rely on it for data protection.

A reasonable data clause should go into detail about the procedures used to protect your data. It should give a guarantee that your data won’t be shared with third parties. Even more than that, a data clause should state that no humans at all will be handling your data. Read the data clause very carefully and make sure it covers all the procedures used to protect your data from breaches.

Include software specifications

The salesperson that sold you the software must have told you all about its features and capabilities. This way you know what the software is meant to do for you, otherwise, you wouldn’t buy it, right? So, what happens if you buy the software and it can’t do any of the things the salesperson promised? Without a clear description of the software, you would have a hard time arguing your case in court.

Make sure the contract includes a detailed description of what the software can do, all of its features and capabilities. If the vendor promised you something they couldn’t deliver, at least you won’t have lost money on this deal. If something is missing from the description, don’t hesitate to ask why that is. Perhaps the vendor simply forgot to add it, or maybe that service is not actually available.

Read the terms and conditions

This is a no-brainer, but you’d be surprised by the number of firms that neglect reading the whole contract. This isn’t about finding the fine print and avoiding scammers (though that is always good). You need to understand what your obligations are before you sign any contract.

The terms and conditions form a great overview of the risks you’re accepting when you sign the contract. For instance, this section should tell you how much you’ll be charged in case of late payment. It will protect you in case of vendor service failure. It should have a few sentences about vendor price protection and data privacy. Read your terms and conditions!

Final words

The goal of contract negotiations is being as transparent as possible and getting a good understanding of what you’re getting yourself into. If you get the feeling that the vendor is not being honest with you, you should figure out why before you sign the contract. In the opposite case, you’ll end up overpaying for a service that doesn’t measure up to your expectations.

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Simple Rules for Negotiating Software and IT Contracts
The goal of contract negotiations is being as transparent as possible and getting a good understanding of what you’re getting yourself into.
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