By Jeremy Holt; Jeremy Newton; Sarah Ellacott; Andrew Katz; Jean Morgan; All authors
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Extra resources for A Manager's Guide to IT Law
Contracts for continuing services (consultancy, support and maintenance services, bureau services) should be terminable on notice. The length of the notice and the earliest dates on which it may be effective are matters of negotiation in each case. COMMERCIAL HIGHLIGHTS Pricing and payment There are as many pricing and payment structures as there are types of IT deal, and there is little to be gained from making generalizations about pricing and payment terms. The one point worth making is that, where payments are tied into specific targets (such as system acceptance), the terminology and structure of the payment schedule should accurately reflect that of the timetable.
Termination. It is important for the client to look at the termination clauses of the contract offered by the supplier. The client will want to know how much notice they have to give to end the maintenance contract. This is often three or six months. g. five years). Contracts for software development Most software will need to be customized for the client by the supplier. However this is really only a tinkering with the main programs. In certain circumstances, it may be necessary for the client to commission new software because there is no existing software that meets the client’s needs.
From the legal point of view, exclusion clauses need to be considered from two broad aspects. First, suppliers will often argue that they should have no liability for ‘consequential loss’, on the basis that the nature of IT products means that their uses (and so the potential losses resulting from failure) are not easily foreseeable at the time the contract is made and the potential exposure is in any case disproportionate to the contract value. Whether this is an acceptable commercial stance depends on the nature of the system and the extent of the client’s dependence on it.