Negotiating software contracts

Negotiating software contracts can be a complex process, particularly for startups, Software-as-a-Service (SaaS) providers and middle-market enterprises who may require custom software to be built for them. There are a number of factors that need to be taken into account, including the software itself, the company’s IT strategy and the commercial goals of the enterprise.

Software contracts also need to dovetail with other digital assets, intellectual property and outsourcing agreements to ensure that ownership is clear and there are robust dispute resolution provisions to deal with failure to deliver or software failure. Otherwise, you could end up with a contract that doesn’t meet your needs or, worse, one that exposes you to liability.

Support for all types of IT, technology and software contracts

We write, negotiate and implement all types of software contracts, including:

• Bespoke software licences
• Software development and distribution licences
• Web design agreements
• SaaS contracts
• Open-source software agreements
• Framework and master service level agreements
• Reseller agreements
• Confidentiality agreements and non-disclosure agreements (NDAs)
• Hardware and software maintenance agreements
• IT-based intellectual property agreements
• End-user licence agreements (EULAs)
• Data processing agreements and agreements dealing with international transfers of personal data

Putting the right software contracts in place requires a sophisticated understanding of technology and the law to protect your interests. Both can change rapidly. By working with us, you can be confident that you are getting current thinking and the best advice from commercial lawyers in London who know how software contracts work.

When it comes to protecting your commercial interests, not all intellectual property agreements do the best job. Using a generic contract means there is a significant risk of omissions, exclusions and expensive disputes further down the line. Since IP is one of your most valuable assets, it’s critical that the intellectual property contracts you use are fit for purpose. Even the slightest mistake could be extremely costly in the future.

Stay protected with the right intellectual property contracts

Our commercial contract lawyers draft, negotiate, review and manage intellectual property contracts across a range of scenarios:

• Buying, selling or transferring ownership of IP
• Confidentiality agreements and non-disclosure agreements (NDAs) to keep your IP secure while you work with another party
• Licensing agreements, allowing a party to repurpose another’s intellectual property for commercial use
• Joint development agreements, establishing how IP will be shared when you’re working with someone else to develop a new product or technology
• Intellectual property agreements for software, including development agreements, distribution agreements, collaboration agreements and revenue share

Intellectual property agreements are often complex documents that require careful thought and negotiation. Our team of commercial specialists can ensure that you retain full protection of your IP rights, with no loopholes or omissions that allow abuse of your IP.

If you work with marketing or advertising agencies or you sponsor products or services, it’s important to have a clear understanding of the legalities involved. The larger agencies tend to have their own contracts which don’t always cover everything they need to, such as when a party is permitted to vacate the agreement or the performance standards that trigger when payments are due.

Sponsorship agreements require careful thought around many issues, including what rights are granted and what happens if the rights are not granted as intended (for example, if an event is cancelled or postponed or has to take place “behind closed doors”).

Influencer advertising tends to attract a lot of scrutiny from watchdogs, including the Advertising Standards Authority, and there are clear industry standards to abide by when appointing influencers or brand ambassadors. Companies that pay influencers to promote their products are jointly responsible for breaches of advertising codes and may be liable for fines if the rules are not followed.

There are also strict regulatory rules concerning the privacy implications of direct marketing to consumers. So it is essential that your sponsorship contracts are watertight.

Expert support for marketing and sponsorship contracts

We have a large specialist team of commercial solicitors with unrivalled experience to help create, negotiate and manage all types of marketing contracts and sponsorship contracts, including:

• Media buying contracts
• Client/agency contracts
• Digital marketing contracts
• TV commercial production
• Affiliate agreements
• Lead generation and referral agreements
• Joint promotions agreements
• Sponsorship agreements
• Influencer agreements
• Advertising and marketing agreements
• Prize promotion terms and conditions
• Endorsement agreements
• Agreements with celebrities
• Event management agreements
• Representation and management agreements
• Non-disclosure and confidentiality agreements
• Agreements for talent licensing and image rights

We provide clear guidance on the best way to structure your commercial agreements to ensure you get the service you are paying for, with the ultimate aim of seeking maximum exposure for your brand while ensuring the agreement is robust and legally enforceable in the event of a dispute.

Agency and Distribution Agreements

By entering into an agency or distribution contract, you are essentially subcontracting the sales and marketing function of your business. There are many advantages to these arrangements, such as tapping into an agent’s or distributor’s local knowledge, retaining the freedom to fix resale prices without breaching competition law, or saving time in establishing your own sales operations.

Distribution contracts may also be more efficient from a tax perspective if you do not need to establish a place of business within the proposed territory.

Tailor-made distribution and agency contracts

Once you have taken the decision to use an intermediary, your commercial objectives will determine whether an agency contract or distribution contract is most appropriate. The structure of the agreement will be different to reflect the fact that a distributor buys goods outright to resell to the marketplace, whereas an agent is not a party to the contract between you and your customer. As such, you will have more control over the activities of the agent than you would over those of a distributor.

Either way, it is important to set out the commercial terms in a clear written agreement to protect your interests in such areas as:

• The authority, rights and duties of the agent/ distributor
• Restrictions on competition
• Risk and liability
• Impact of insolvency
• Compensation or indemnity on termination
• Protections to avoid falling foul of competition law

Our commercial contract solicitors have extensive experience in the fields of agency and distribution contracts, operating both within the UK and overseas. We can help you make decisions about whether to appoint distributors or agents, draft bespoke agreements, provide advice on terminating an agreement, and efficiently resolve disputes.

Creating an innovative environment is incredibly important to today’s businesses, especially those working in manufacturing, technology or life sciences where advances are made every day. Research and development often require collaboration between a number of parties to achieve such innovation. It is therefore important to put in place a series of robust R&D agreements, laying down the rights and responsibilities of your company and its collaboration partners. Elements of an effective R&D agreement usually include:

• Division of tasks
• Provisions to keep the development on schedule and within budget
• Milestones for results
• Distribution of costs and revenues
• Ownership and transfer of intellectual property
• Protecting sensitive information and know-how
• Termination and dispute resolution

For international collaborations, you must pay special attention to the choice of law in your R&D agreements. After all, the commercial arrangements you have made must be enforceable abroad.

Need help with Research & Development agreements?

One size does not fit all when it comes to R&D agreements. Our commercial contract lawyers can help you draft bespoke terms for your high-value R&D collaborations, reflecting both the commercial opportunity and your approach to risk. We offer advice on all the areas that need to be considered to help research and development collaborations run smoothly so that your interests are protected every step of the way. Our commercial contracts team can assist with whatever agreements you may need, including:

• Development agreements
• Joint development agreements
• Contract research agreements
• Clinical research agreements
• Material transfer agreements
• Non-disclosure agreements (NDAs)
• Intellectual property licences and assignments
• Collaboration agreements

An increasing number of businesses are using franchising as a growth strategy and it can be a huge opportunity when the right legal protections are in place. These protections do not happen automatically. There are no specific franchising laws in the UK and the franchisor-franchisee relationship is largely governed by contract law and industry codes of practice. This means that a number of issues can arise if you proceed without legal advice, such as:

• Enforcement of intellectual property rights
• Protection of the franchisor’s name, brand and system
• Enforceability of restrictive covenants/ restraint of trade against former franchisees
• Employment law issues such as transfer of undertakings, including when franchises are brought back in-house
• Competition laws issues
• Franchisee loss and failed franchises

Franchising agreements at home and overseas

Whether you are a potentially new franchisor, an established overseas brand wishing to expand franchising operations to the UK, or a UK franchise looking to develop franchise networks in other countries, we can help. Our team has years of experience in creating robust franchising agreements, including pilot (test) franchise contracts, brand licensing and IP protection, ensuring that your business format is protected and that you have proportionate control over your network.

There are several ways in which an international franchise arrangement can be structured. The most common is master franchising, where franchise rights are granted to a local business entity for the whole or a part of a country, although direct franchising or a joint venture arrangement may also offer pathways to success. Our highly regarded solicitors can review your business model to see whether it is franchisable or what is the best alternative.

Outsourcing work can give you access to capabilities and facilities otherwise not accessible to your business and result in a reduction of cost or risk. But there are complexities to manage. Like any supplier arrangement, your outsourcing contracts will need to consider service levels, exit provisions and quality standards at the start of the collaboration to ensure that nothing vital is overlooked.

Our outsourcing contracts expertise

Our specialist commercial lawyers provide highly commercial, trusted advice and can draft, review and negotiate the right form of outsourcing agreement for you. While every contract is bespoke, we will consider a number of provisions to help protect your investment, including:

• Scope of services to be provided
• Performance monitoring and audit protections
• Staffing and service levels
• Contingency planning, including disaster recovery and step-in rights if the outsourced contractor doesn’t perform
• Managing handovers and asset transfers from one supplier to another
• Regulatory requirements which may apply, for instance, in the public sector
• Data protection
• Intellectual property rights and product ownership
• Tax considerations
• Termination and exit management

As full-service commercial lawyers, we can support you through the entire outsourcing lifecycle, from tender preparation and evaluation to disengagement and dispute resolution in the context of outsourcing contracts. With the experience in advising clients in both the private and public sectors, we regularly act for companies and outsourced service providers, in the UK and offshore, enabling us to offer strategic advice from both perspectives.

Almost every middle-market business will have a variety of services agreements, whether supplying services or buying services. They cover such diverse provisions as hospitality, IT, advertising, PR, agency, distribution, manufacturing, logistics and facilities management, and cover the whole spectrum of complexity from short, standardised terms and conditions to master service agreements with numerous schedules.

Even if a supplier has a standard – or even an industry-standard – document, there will need to be some negotiation to make it fit the specific needs of your business. Our experienced team can add value by focusing on key issues, including:

• Scope of services
• Performance standards and quality control
• Ownership and use of products
• Ownership of intellectual property rights arising from the services
• Negotiating limitations and exclusions of liability
• Dealing with sensitive information and personal data
• Termination and replacement rights if the service provider is not up to standard
• Flexibility if you need the services to adapt to changing business needs

Service agreements or service level agreements?

Service level agreements are typically drafted as a supplement to a services agreement. Operating much like a scorecard, SLAs are designed to assess the service provider’s performance over time based on precise criteria. They are mainly used for high-value, high-importance contracts where a lot of detail is needed about the nature of the services, deliverables and the consequences of under-delivery, such as service credits for poor performance and termination rights for critical poor performance.

It is a false economy to sign up for generic services agreements without fully knowing what you could be getting into. We have dealt with many services agreements and service level agreements over the years for both service providers and recipients. Our commercial team is happy to deliver all that experience to you, ensuring a fair result for both parties.

If you are considering entering into a commercial joint venture, we have the expertise to guide you through the complexities. Our aim is to ensure your joint venture agreements achieve the right balance of risk and upside, with clear advice on the rights and contributions of the partners, watertight profit-sharing arrangements, and provisions for a smooth exit.

Achieve your goals with expert joint venture contracts advice

No two joint venture agreements are the same and there are various possibilities to consider. Our team of commercial contract solicitors can help you with:

• Advice on the right joint venture structure and your alternative options, for example, a Special Purpose Vehicle, LLP or collaboration agreement
• Defining the parameters of the joint venture, tailored to commercial objectives
• Finance and profit-sharing arrangements
• Termination and exit provisions, including rights of first refusal or veto rights on transfers if a partner can exit by transferring shares
• Joint venture governance best practices
• Intellectual property and confidentiality clauses to protect the work produced during the joint venture
• Cross-border joint ventures where competition law and tax concerns need to be addressed when deciding on the structure of the joint venture
• Dispute resolution between the joint venture partners and third parties

Joint ventures are popular as vehicles for expansion, collaboration and innovation. If you need specialists for legal advice on the commercial and legal advantages and pitfalls, or joint venture agreements drafted or reviewed, please get in touch with us.