Every cooperation in the IT outsourcing realm starts with a contract. And how it goes or ends will depend on how accurate the contract is. Most of the problems clients end up with at Tretten Lawyers’ doorstep are caused by poorly prepared contracts. You’d be surprised by how many tech companies I’ve seen in the 10 years of my career as an IT lawyer with contracts just downloaded from the web or received from the customer and signed as they were, without any review or amendments.

What could go wrong, right?

Well, a lot. It could work for a while, but sooner or later, those companies eventually faced “unforeseen consequences” like a client’s refusal to pay for services, sudden non-competing obligations, and other unpleasant things for their businesses due to breaches in the contract.

In this article, I’ll provide a comprehensive guide on managing a contract so you can be sure that your company’s interests are legally protected.

General Contract Terms. Watch out for…

Subject of the contract. This part must clearly and accurately define what you will produce under this contract. For example, a mobile application, a website, or whatever it’s expected to be. The more thoroughly you’ll describe it, the better.

Transferring rights of intellectual property (IP). Rights should be transferred after the customer fully pays for the object or IP. Make sure that this condition is reflected in the contract. In my practice, it helped many clients get paid.

IP clearance. In some contracts, you can find provisions like “The Contractor guarantees full clearance of intellectual property.” It means you are obliged to do nothing within this project that can violate someone’s IP rights in the whole world. If you don’t want to devote your life to checking up on every single piece of your code for plagiarism (which is hard and expensive, and in vain, because you won’t be sure anyway if anyone on Earth had never written the same thing as you did), you better do your best to remove this from the document. Or hope that no one takes this commitment seriously.