IT Contracts

Information technology (IT) continues to underpin so much of how the world operates. It certainly plays a fundamental role in the success of many businesses in the UK.

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How can Cranbrook Legal assist me with contracts for my IT business?

If your business in the UK specialises in the provision of IT products and/or services, you will want to be sure of only entering into contracts that reflect and protect your organisation’s interests.

Our legal team can help ensure any contract to which your IT business might be subject is clear, robust, and fair.

We can do this by drafting, reviewing, and advising on contracts. This way, your business can be sure all relevant aspects have been scrutinised and addressed by knowledgeable legal professionals.

What type of contracts should I have in place with my clients to protect my IT business?

Over the course of your IT business’s operating life, there are various types of contracts that you might enter into with clients. The most suitable contract for any given client relationship will depend on the particular needs and circumstances of the parties to the agreement.

Examples of such contracts include:

  • Service contracts, which are standard contracts for ongoing IT support or maintenance services
  • Project-based contracts, which are used for specific IT projects
  • Managed service agreements, whereby the supplier provides ongoing oversight and support for the client’s entire IT infrastructure
  • Software development agreements, for the development of custom software
  • Data processing agreements (DPA), for situations where your IT business may be handling large volumes of client data.

What key clauses should I have in my service agreements to limit liability?

There are various clauses that you might look to include in your IT business’s service agreements with clients, to help limit your firm’s liability.

They include:

  • A limitation of liability clause, which caps the amount of damages that one party is able to claim from the other, in the event of a breach or other legal issue
  • A scope of services clause, which precisely defines the services provided by the provider, excluding any activities that are not explicitly mentioned
  • An indemnification clause, which sets out who is responsible for covering legal costs and damages arising from third-party claims
  • A force majeure clause, which excludes liability for events beyond the IT business’s control, such as natural disasters or political instability
  • A dispute resolution clause, which stipulates how disputes will be resolved, such as through mediation or arbitration.

How can I ensure that the IP rights related to software or systems I develop are protected?

Protection for your intellectual property (IP) with regard to any software or systems you have developed, will come primarily from copyright law.

So, formally registering your copyright with the relevant IP office will be one of the most powerful ways you can protect your software IP.

However, it is strongly advised to take a holistic approach to IP protection, which is likely to lead you to consider further courses of action.

You might, for example, look to obtain patents for unique technical innovations within your software, as well as trademarks for your product name and branding.

How can I make sure my contracts comply with GDPR and privacy laws?

As an IT business, you can incorporate various points into your contracts with clients to make sure you adhere to General Data Protection Regulation (GDPR) and privacy legislation.

The following are some key points to include:

  • The data processing purpose, clearly outlining the specific purpose for which personal data will be collected and processed
  • A consent mechanism, ensuring that users provide informed consent for data processing
  • An outline of data subject rights, setting out how data subjects can exercise their rights to access, rectify, erase, restrict, and object to their personal data
  • Information on the data security measures that will be implemented to prevent unauthorised access to – and disclosure, alteration, or destruction of – personal data
  • The data retention policy, including the timeframes for data retention and data deletion measures.

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How can I address breaches of contracts in my IT business?

If you suspect that a breach has occurred in a contract that your IT business has with another party, your first step should be thoroughly examining the contract to determine whether a breach has occurred. This examination process will help you understand the specific nature of any such violation.  

Presuming a breach has indeed happened, you are advised to document the details of this, before reaching out to the client to discuss the breach. Your focus at this stage should be seeking to resolve the issue amicably through open communication.

Depending on the nature and severity of the breach, there are various subsequent steps that you might take. The contract may set out specific remedies for breaches – such as termination clauses or dispute resolution clauses – or you may ultimately need to consider pursuing legal action.

You are urged to always seek legal advice when you are dealing with a significant contract dispute.  

What are best practices for including non-compete and non-disclosure clauses and agreements?

When you are looking to include non-compete and non-disclosure clauses in a contract, you should be mindful of certain widely accepted best practices.

Such practices include clearly specifying what constitutes confidential information, as well as limiting the duration of restrictions to a reasonable timeframe, and avoiding overly broad or restrictive clauses that might not be enforceable.

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Contact our Commercial Solicitors In London on 0208 215 0053 or
via info@cranbrooklegal.com to make your enquiry.

How can I avoid future payment disputes?

There are many different steps that an IT business can take to minimise the likelihood of payment disputes arising in relation to a contract it has with a client.

Such strategies can include:

  • Providing precise information on the scope of work, clearly defining the deliverables, features, functionalities, and performance metrics expected from a project
  • Setting out the exact cost of services, including the circumstances in which additional fees may be applicable
  • Outlining the payment schedule, including milestones and corresponding payment amounts.

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Frequently Asked Questions

1. What legal steps should I take to protect my IT business?

Many different legal steps can be taken to help ensure your IT business is protected. These could encompass, but are not necessarily limited to:

  • Trademarking your company name to prevent its use by other people
  • Establishing the best legal structure for the protection of your personal assets
  • Complying with data privacy regulations such as GDPR

Putting in place non-disclosure agreements (NDAs) with clients, employees, and potential partners, to protect sensitive business information.

A responsible IT business should consider – and implement – a variety of methods to ensure customer data is suitably protected.

Such measures should include only collecting the customer data that is strictly necessary for operations, as well as implementing strict access controls to limit who can view and modify customer data. The strong encryption of sensitive data will also be of critical importance in protecting customer details from being seen by unauthorised actors.

Any of a range of remedies can be pursued in the event of a breach arising in a contract that an IT business has with a customer. These can include – but are not necessarily limited to – damages, mediation, or arbitration.

However, the most advisable course of action for handling a particular breach of contract will depend on such factors as the severity of the breach, and the terms laid out in the contract.

For tailored legal advice in relation to your IT business’s situation if you suspect a contract breach has occurred, please contact Cranbrook Legal.

It is not the case that an IT business will automatically retain ownership of work that a contractor might carry out for it.

Indeed, the typical legal position in this situation is that the independent contractor will own copyright over works they create, even if they created them for a particular business.

For this reason, you may look to agree a contract with an independent professional that explicitly states the intellectual property rights of the works they create will belong to your company. Here at Cranbrook Legal, we can assist you in putting together such a contract.

Yes, the IT sector faces a variety of legal challenges that continue to emerge and evolve. These touch on such areas as intellectual property, data protection, and cybersecurity.

Yes – indeed, for most of our legal services, we operate on the basis of a pre-agreed fixed fee. Please consult our fees page for more in-depth information on our pricing.

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