Technology Contracts: Using the Appropriate Form

There are several factors to consider regarding the form of the technology agreement. First, some vendors operate with a series of interrelated and interdependent agreements to form their contracts. Consequently, it is essential for the client’s lawyer to carefully review all agreements and understand their hierarchy to ensure that amendments are applied appropriately across documents.

Next, larger vendors often use omnibus “one-size-fits-all” contracts that include various international terms unsuitable for the specific transaction. These can include global data protection agreements and service agreements that improperly hold US and Canadian customers accountable for complying with European data protection laws, anti-corruption laws, antislavery laws, anti-bribery laws, export controls, and other irrelevant provisions. Therefore, clients should require their vendors to provide localized services agreements with suitable terms regarding governing laws, jurisdictions, and applicable data protection regimes. This includes mandatory data or security breach notification provisions and timelines to meet relevant regulatory and legal obligations. If localized service agreements are unavailable, clients and their lawyers should consider the extra time needed to negotiate necessary amendments to make the agreements suitable for localized use.

Finally, any negotiated amendments must be correctly incorporated into the primary or overriding vendor document. Many standard vendor technology contracts feature numerous hyperlinks to frequently changing standard form agreements on the vendor’s website, which may conflict with the carefully negotiated amendments. It is therefore crucial to ensure that the relevant Order Form or document explicitly refers to the amended Master Services Agreement and its related exhibits rather than relying on generic standard terms.

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