Don’t define “material breach”
Some contract drafters define material breach in their termination provisions. They find “material” too vague on its own. That’s a mistake because defining the concept can limit your rights in ways you’ll eventually find unacceptable. And “material breach” is not vague, believe it or not. A contracting party needs the right to terminate for the […]
Why a notice period to terminate for convenience?
In service contracts, termination for convenience clauses often call for a long notice period. The customer (usually) can terminate for any reason, but it has to give 90 days’ notice — or maybe 180 days’ or more. In many cases, the customer also has to pay an early termination fee. But if the fee compensates […]
Announcing our new Master Classes
We’re excited to announce our new Tech Contracts Master Classes™. Tech Contracts Master Classes™ provide an in-depth yet unusually concise, accessible review of all the clauses typically found in information technology contracts. The Master Classes program is broken into four sessions taught by your instructor, David W. Tollen, with live Q&A in each. Our inaugural program […]
COVID-19 Disruption Terms
During 2020, we developed terms to address Covid-19: a clause that lets the customer suspend professional services and provides a procedure to restart. It looks like we’re not out of the woods yet (Delta variant, etc.), so those sorts of terms deserve a look. The clause below goes beyond force majeure by providing procedures for […]
Non-Compete Issue-Spotter
In a non-compete clause, one party promises not to compete with the other. In IT contracts, customers sometimes ask their professional services providers for non-compete terms. The service provider promises not to serve the customer’s competitors. (Click here for a sample clause from The Tech Contracts Handbook — and see bullet 8 below.) And in […]
Don’t Cross the (Payment) Streams
“Don’t cross the streams,” says Egon in Ghostbusters (the 1984 original). “It would be bad.” Why? “Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.” You could face less extreme consequences if you cross the payment streams in a contract, but […]
U.S. Tech Contracts Law Firm of the Year!
We’re delighted to announce a new award for our founder’s law firm. Worldwide Financial Advisor Awards Magazine just announced Technology Contracts Law Firm of the Year – USA in its Golden Advisor Awards. David Tollen’s firm, Sycamore Legal, P.C.. was the winner. Sycamore Legal is based in the San Francisco Bay Area and provides legal […]
IP Indemnity Exception: “Registered after the Effective Date”
This article has been superseded by an updated version. Some intellectual property indemnities exclude claims about IP registered after the contract’s effective date. The tech provider argues that it shouldn’t be responsible for IP it didn’t know about when it created its product — or at least when it signed the contract. “If we couldn’t […]
SLA terms may be more negotiable than you think
Cloud services providers often say they can’t negotiate their SLAs. All customers get the same SLA, so customizing terms for one customer would require changing procedures used for everyone. That’s often true, but customers should test the limits of SLA flexibility. Not all SLA revisions require that the provider change its procedures. Terms addressing “legal” […]
Don’t grant or receive licenses to “use” software
Here’s a typical grant of rights from a software end-user license agreement (EULA): Provider hereby grants Customer a license to use 30 copies of the Software. Common though that clause may be, it’s dysfunctional. On-premise software licenses grant rights under copyright. And the copyright statute does not address a right to use anything. U.S. copyright […]