Hey everyone! I'm working on a significant project to revamp our customer portal and e-commerce system, which is a hefty investment of over £150k. We've selected a vendor we really like, but their standard contract raised several concerns for me that I'd like to discuss.
I've flagged a number of issues and would appreciate your insights to see if I'm being overly cautious or just practicing good due diligence. Here are the main points I pushed back on:
- **IP Ownership**: The contract states that they retain ownership of the code and only grant us a non-exclusive license. Given the size and cost of this project, I believe we should own the custom development.
- **Upfront Payment**: They require a 40% deposit before any work begins. That feels excessive for a project of this scale, so I suggested milestone payments based on deliverables.
- **Vague Timelines**: The contract outlines phases but lacks specific delivery dates and consequences for delays, which worries me.
- **Support Terms**: Their language around support is quite unclear, with phrases like 'best efforts' and no specific SLAs or uptime guarantees.
- **Liability Caps**: Their liability is set very low for such a large project, but ours isn't.
- **Dependencies Licensing**: There's no clarity on who is responsible for maintaining or paying for any needed plugins or tools after the fact.
- **Security Compliance**: Although they mention GDPR compliance, there are no standards or measurable commitments mentioned in the contract.
- **Change Control**: Their process gives them the ability to charge us for anything they deem 'out of scope,' but the scope remains loosely defined.
Since this project is vital for generating our revenue, it's crucial that the contract reflects its scale and associated risks. Has anyone faced similar situations with software vendors or large agency contracts? Are these red flags typical, or am I being too strict? I don't want to be that difficult client, but I also need to protect my company. I'd love to hear from anyone with experience in negotiating these types of contracts!
1 Answer
From what you've described, it definitely seems like there are some significant red flags in that contract. Contracts should be clear and straightforward, and it looks like this one is heavily skewed in favor of the vendor. I'd suggest you continue to push for those amendments, particularly when it comes to IP ownership and vague timelines. For a project of your size, you absolutely should own what you're paying for—especially custom development.
Thanks for your input! I had the same gut feeling about the clarity and balance of the contract. I really hope they can see the points I'm raising as reasonable and necessary.