Clauses

Below are all the sample terms found in the clause boxes of The Tech Contracts Handbook, 3rd Edition. They’re organized into:

I. PRIME CLAUSES (licenses, promises of service, payment)

II. GENERAL CLAUSES (indemnity, data security, limit of liability, and the rest of the meat of tech contracts)

III. BOILERPLATE (typical back-of contract material, but more important than you think)

All these clauses are provided free of charge, including for use in your contracts and your clients’ contracts. But they’re all subject to our TERMS OF USE & PRIVACY, which includes both disclaimers and license restrictions on reselling the forms.

Clauses For AI Contracts

David Tollen recently published an issue-spotter on artificial intelligence (AI) contracts, and it includes several sample clauses. These supplement the clauses provided in The Tech Contracts Handbook.

General Clauses

I-A: Simple End-User License, On-Premise Software
- 1- Reproduction and Use
  - Simple End User Reproduction and Use
- 2- End-User Conditions and Restrictions
  - End User Conditions and Restrictions

II-B: Service Level Agreement (SLA)
- 1- The Provider’s SLA
  - Provider’s Standard SLA
- 2- Customer-Friendly SLA Edits
  - Customer Edits to SLAs

II-C: Maintenance, Including Updates and Upgrades
- Maintenance

II-D: Documentation
- Documentation
- Documentation as Specifications

II-E: Schedule, Cooperation, and Assumptions
- Schedule of Professional Services
- Cooperation, Assumptions, and Delay Remedies

II-F: Deliverables: Acceptance and IP Rights
- 1-Acceptance and Rejection
  - Delivery and Acceptance
  - Refund for Failed Deliverables
- 2-License and Other Rights to Deliverables
  - Rights to Deliverables

II-G: Minimum Obligations to Distribute or Resell
- Minimum Obligations to Distribute

II-H: Nondisclosure/Confidentiality

- 1-What’s Confidential?
  - Confidential Information Defined
  - Restrictions on Confidential Information
- 2- Restrictions on Use
  - Nondisclosure
- 3- Injunction, Termination, and Retention of Rights
  - Injunction, Termination, and Retention of Rights
- 4- DTSA Exception and Immunity
  - DTSA Exception and Immunity

II-I: Business Continuity, Including Disaster Recovery
- Business Continuity Plan
- Actual Continuity of Business

II-J: Data Management, Privacy, and Security
- 1- Customer Data Definition and Ownership
  - Customer Data Definition and IP Rights
  - All Personal Information Excluded
- 2- Use of Data
  - Use and Disclosure of Data
- 3- Compliance with Privacy and Security Laws
  - Applicable Law (Customer-Friendly)
- 4- Data Location, Access, Deletion, and E-Discovery
  - Location, Access, and Deletion (Customer-Friendly)
- 5- Data Security
  - Data Security (Customer-Friendly)
- 6- Audits and Testing
  - Audits and Testing (Customer-Friendly)
- 7- Data Incidents
  - Data Incidents (Customer-Friendly)
- 8- Limited Data Terms
  - Processor/Host Limited Data Clause
  - Limited Data Clause for Incidental Access

II-K: Warranties
- 1- Warranty of Function
  - Warranty of Function
- 2- Intellectual Property Warranty
  - IP Warranty
  - Warranty of Originality
- 3- Data Warranties
  - Data Warranties
- 4- Professional Services Warranties
  - Professional Services Quality Warranties
- 5- Other Warranties
  - Special Warranties
- 6- Disclaimers of Warranties and Other Liabilities
- 7- Warranty Remedies (and IP Remedies)
  - Remedies for Breach of Warranty
  - IP Remedies without a Warranty

II-L: Indemnity
- 1. Indemnity in General
  - Generic Indemnity
- 2. IP Indemnity
- 3. Data Indemnity
  - Data Indemnity from the Provider
  - Customer/Reseller and “Mutual” Data Indemnities
- 4- Other Indemnities
- 5- The Cause Problem (or Advanced Indemnities)
  - Conditional Defense

II-M: Limit of Liability
- 1- Dollar Cap
- 2- Exclusion of Consequential Damages
  - Exclusion of Consequential and Similar Damages
- 3- Unconscionability and Required Clarifications
  - Clarifications and Disclaimers
- 4- Exceptions: Unlimited Liability
  - Typical Exceptions to Limit of Liability
  - Exceptions to Mutual Limit of Liability
- 5- Limit on Indemnity Performance (as Opposed to Liability)
  - Limit on Indemnity Performance Obligations

II-N: Liquidated Damages
- Specification of Liquidated Damages
- Justification for Liquidated Damages

II-O: Audits of Software Use and Fees
- 1- Provider’s Software Audit
  - Provider’s Software Audit
  - Fees for Prior Unauthorized Use (Back Fees)
- 2- Customer’s Audit of Fees
  - Customer’s Audit of Fees

II-P: Technology Escrow
- Separate Escrow Agreement
- 1- Deposit and Verification
  - Escrow Deposit and Verification
- 2- Escrow License and Confidentiality
  - Escrow License
- 3- Release Conditions
  - Escrow Release Conditions
- 4- SaaS Escrow

II-Q: Step-in Rights for Outsourcing
- Step-In Rights
- Stepping Out

II-R: Financial Stability
- 1- Financial Reporting
  - Financial Reporting
- 2- Insurance
  - Insurance

II-S: Use of Trademarks
- Use of Names and Trademarks

II-T: Feedback Rights
- Feedback License
- Feedback Disclaimer

II-U: Non-Compete and Employee No Poaching
- 1- Non-Compete
  - Non-Compete: Restriction on Serving Competitors
- 2- Employee No Poaching
  - Employee No Poaching

II-V: Term and Termination
- 1- Term
  - Term
- 2- Termination for Cause
  - Termination for Cause
- 3- Termination for Convenience
  - Termination for Convenience
- 4- Effects of Termination and Post-Termination Obligations
  - Effects of Termination (On-Premise Software)
  - Deletion of Data after Termination

II-W: Transition Assistance
- Transition Assistance

II-X: Dispute Resolution, Including Mediation and Arbitration
- 1- Escalation and Mediation
  - Escalation and Mediation
- 2- Arbitration
  - Arbitration
- 3- Waiver of Jury Trial and Class Action
  - Waiver of Juries and Class Actions

II-Y: Assignment, Change of Control, and Divestiture
- 1- Assignment in General
  - Anti-Assignment and Permitted Assignment
- 2- Change of Control
  - Anti-Assignment and Termination for Change of Control
  - Assignment Allowed with Change of Control
- 3- Divestiture
  - Divestiture with Assignment
  - Cooperation After Divestiture

II-Z: Everything Else
- N/A

Clauses – General Clauses

Clauses

Below are all the sample terms found in the clause boxes of The Tech Contracts Handbook, 3rd Edition. They’re organized into:

Clauses For AI Contracts

General Clauses