Mark Kaufmann

Objectives Share and discuss common tips and traps and ways to address Identify strategies for various vendor “ploys” Reality Check Negotiations sometimes are a function of timing and bargaining position

Disclaimer

Contracting 101: Who, What, Where, When and How (Much) – Why Important Who: The parties What: The purpose of the agreement – the story Where: On-site? Remote? Cloud? Other? When: Effective Date and Term How (Much): What is the consideration and the manner of payment?

Clarity and Precision Matters Who’s Doing What and When (Process) Description of services Present a logical storyline Consistency in terminology is key Interdependencies should be clear Three common bases: Outcome vs. Process vs. Level of Effort When should these be used?

License – Scope of Use: Multi-faceted, Multi-variable Who What Where When How (Much)

Ownership of Work Product Should We Care? It depends…. General rule of ownership What constitutes “work made for hire” A copyright concept Transfer ownership with license License only – duration?

Service Levels When employed? What is goal? Necessary but not sufficient Definition, measurement and reporting Consequences for failure Liquidated damages are common Right to terminate

Termination Rights and Consequences Vendor rights – limited nature User rights Non-performance Convenience – at what price? Regulatory Change of control Service level failure Others Now what happens? Consequences

Consideration: Rubik’s Cube Fixed fee Not-to-exceed Time and materials Fixed fee with risk share Expense treatment Payment triggers

Confidentiality and Non-disclosure Obligations Protected business information No marking requirement Self-liquidating Personally identifiable information and protected health information Masking/encryption Specific data protection protocols Special off-shoring concerns

Representations, Warranties and Covenants Difference and legal effect Services Deliverables Compliance with laws Non-infringement Other “legal-related” concepts

LOL, Disclaimer of Damages and Exceptions Perception of pendulum shift Limitation of liability Damages disclaimer Exceptions Breaches of nondisclosure obligations PII and PHI disclosures – security breach Indemnification obligations Vendor asks

Indemnification – Third Party Scope Transaction type specific IP may be critical Focus on carve outs Focus on remedies Procedures Procedures matter Exclusive vs. cumulative/sole remedy

Additional Items Personnel Approval, removal and replacement Insurance Relationship with LOL and indemnification Self-retained amount Assignment and subcontracting Force majeure Non-solicitation / non-hire

Additional Items – Cont. No publicity Governing law and venue Audit and monitoring rights Financial vs. performance Limitations and exceptions SSAE 16 ISO Governance Alternative dispute resolution

Negotiating Nuggets Involve business team early and often Timing of negotiations and execution can matter – for each party Battle of forms – RFP Pick your battles – price is not the only battle If vendor paper, seek mutuality as a way to compromise Define, define, define Source code escrow – is it worth it Trust but verify –blacklining/track changes

Questions and Discussion