What is missing in my customer agreement form?

May 10, 2017

Managed Service Providers (MSP) and software developers sometimes use agreements from peers, samples from the internet, and from legal form databases. These methods of obtaining agreements to use with customers are sometimes utilized to avoid legal expenses from an experienced technology lawyer or because the forms are from trusted sources. When using such an approach, consider the following:

Have I actually read my form agreement?

In order for customer agreements to be effective, suppliers should be able to communicate the language and intent of the contract language. Additionally, being confident that the language is appropriate can be helpful when having to defend the language in negotiations. MSP’s and developers should be able to explain “why” the contract language is necessary. Not knowing what is in the contract form, or why the language is necessary could lead to losing credibility before even delivering the products or services to current or prospective customers.

Do I understand the terms and conditions?

Contracts can contain terms and conditions that are not fully understood by the business utilizing the form. Misunderstanding or miscommunicating the language to a customer or prospective customer can lead to an embarrassing conversion, or worse, cost the company revenue from losing sales. Sometimes a supplier will simply remove confusing language. However, a business should seek to first understand the language, even if the language should ultimately be removed. It can be especially helpful to know how the language protects the business, puts the business at risk, or should be customized to better fit the needs of the business.

What is missing from my contract form?

Missing business and legal clauses can be the hardest to detect and resolve. Even a careful reading of a contract may lead to a complete understanding of the terms and conditions, but what if crucial business and legal terms and conditions are missing? To ensure that an agreement adequately protects the business, the agreement should address the relevant issues. Peer contract forms, and templates downloaded from the internet or legal databases were not drafted with your business in mind. Consequently, there could be terms and conditions that should absolutely be included in your form contracts that are missing from forms not customized or tailored to your specific business, products, and services. 

Because form agreements can be generic or missing important business and legal language necessary to adequately protect the interest of the business, seeking the advice of a technology attorney experienced in drafting, reviewing, and revising technology, licensing, and IT professional services contracts could help the supplier understand its form contracts and resolving gaps in business and legal terms and conditions.