The Tech Contracts Handbook: Cloud Computing Agreements, Software Licenses, and Other IT Contracts for Lawyers and Businesspeople, Third Edition

Introduction

This book will help you negotiate, draft, and understand information technology contracts. Specifically, it will help you address software-as-a-service and other cloud computing agreements, on-premise software licenses and other software transfers, and technology professional services agreements. It will also help you with the many contracts that combine two or more of those offerings. This book addresses business-to-business contracts (between companies) and business-to-government contracts. That includes agreements related to technology outsourcing and software distribution, among many other types. This book also addresses business-to-consumer contracts.

The guidance offered here is for both lawyers and nonlawyers. The text stays away from technical jargon—“legalese,” “engineerese,” and “programmerese”—and where it absolutely can’t avoid jargon, it provides a definition. In other words, this book uses simple English, like a good contract.

You can use this book as a training manual or a reference guide or both. If you’re training, read this book cover to cover. It provides an overview of the key technology contracting concepts.

If you’re after a reference guide, you can pick and choose the chapters to read. When you’re negotiating a contract, or reading or writing one, look up the various clauses to learn what they mean and what’s at stake. You’ll find sample language in each chapter, which you can incorporate into your own contracts. Plus, if you visit this book’s website, http://TechContracts.com, you can copy the sample clauses and paste them into your document. You’ll also find full-length contracts at the website, which you can download and revise to fit your deals.

Finally, you can use this book’s table of contents as an issue spotter: a checklist of clauses to consider.

This book can’t replace a lawyer—or a colleague with more information technology (IT) experience, if you are a lawyer. But it can help you understand your lawyer or colleague. And whether you have legal help or not, the better you understand your contracts, the more effective you’ll be.

I’m a technology lawyer and expert witness, a law school lecturer, and a professional trainer. This book grew out of seminars I teach, for both attorneys and non-attorneys. When I started running those seminars, students often asked where they could learn more—if I knew a good book on IT contracts. Most of the books I knew were massive tomes on intellectual property or contract law. They’re written for lawyers only, and their more practical lessons are spread across hundreds of pages. I’ve learned much of my trade on the job, rather than from a book. I’ve served as a technology lawyer in San Francisco and the Silicon Valley, both with a global firm and with my own law firm. I’ve also served as general counsel for a publicly traded software company and as vice president of business development for an Internet start-up. The material for my seminars came from the contracts I had negotiated and written in those positions. I’d never seen a really user-friendly outline of the issues. So I wrote this book.

This is the third edition. I’ve revised each edition to address changes in law and industry practices, as well as my own continuing experience, particularly as a contract negotiator and expert witness. And, in this edition, I’ve added something new. I’ve explained a handful of the most complicated issues raised by typical IT contracts. Those include the more intricate twists and turns of indemnities, the confusing role of “cumulative” limits of liability, and the realities that debunk myths surrounding copyleft (“viral”) open source software.1 Many contract drafters get along without ever noticing these trickier issues. And some who notice them ignore them—and that can be a valid choice. Figuring out, drafting, and negotiating any contract term costs time and money, and you should always weigh those costs against the benefits. So, in this book, each really complex issue has its own subchapter or section (the latter separated out by three diamonds, like those beneath this paragraph). That way, you can easily skip an issue you don’t want to tackle without skipping more vital, everyday explanations. But I hope you will dive into all the issues addressed here, including the handful of unusually complicated ones. Even if you decide not to address an issue in your contract, you’ll do a better job if you’re aware of it and understand it.