IT, Internet & Telco contracts – stay clear on what “will be” delivered and what “might be” delivered

by Andrew Lind on 8 April, 09

With all the energy surrounding the Federal Government’s announcement yesterday about forming its own company to facilitate the new National Broadband roll-out its a good time to remember some common traps in IT, Internet Service and Telco contracts.

1. Up-time guarantees – far better to state what history has shown to be the up-time than make promises, that for any number of reasons beyond your control you are simply not able to keep.

2. Trouble shooting response times – a wise man once said to me, “under promise and over deliver“.  No technology user expects that any system (no matter how good or expensive it is) will never break. However, the business leaders of your customer will have a clear memory of assurances that were made to them about how quickly problems would be fixed. An off-the-cuff sales pitch may cost you dearly.

3. Offer what you “have”, not what you “might have”– the temptation in an industry that moves so rapidly is to sell what I call, “vapor-ware” rather than “software” and solutions that have already been developed and tested. You think to yourself, we developed the last upgrade in two months, let’s promise what the next version will deliver and we’ll use this contract to pay for the development. Sober reflection will remind you that upgrade paths never move in straight fully predicable lines. If part of what you are delivering is “developmental”, say so.

For these and many other good commercial reasons, it is a great idea to have our IT, Technology, IP and eLaw savvy lawyers look over your intended IT, Internet Service (ISP) or Telco contract before you sign it.

{ 2 comments… read them below or add one }

Trudy Rowsell June 23, 2009 at 10:17 pm

If I wanted to buy a business and not sure of what structure sole trader, partnership, company or trust what do they mean to check out and evaluate the financial risk of each structure. Are there different financial risks for each structure?

Thank you

Andrew Lind July 15, 2009 at 5:14 pm

Great question. The short answer is yes. The longer answer is going to mean that you will need to have a conference by phone or face to face with a lawyer from our office.

e.g.

Sole Trader – This individual is personally liable for all of the debts of the business

Company – As the company is a separate legal person from its directors and shareholders some liabilities can stop with the company and the personal assets of the shareholders (and to lesser extent directors) protected.

Trust – The degree of risk exposure depends on who is the trustee of that trust and the terms of the Trust Deed.

If you would like a quote for a 30 minute telephone conference just let me know.

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