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IT contract disputes: what to know and how to avoid them

It’s no surprise that as more and more companies are operating online and with the growing use of CRM technology, our contract dispute solicitors are seeing a sharp increase in the number of firms seeking legal support when things go wrong with their IT-related contracts. This includes both supplier and consumer businesses on both sides of the issue.  

Some common themes in this regard include, but are not limited to: 

  • The installation of and upscaling of new/existing CRM systems 
  • Negotiating online marketing agreements 
  • The creation of new company websites 
  • Provision of cybersecurity expertise 
  • Intellectual property rights 

IT Contract Disputes: considerations at the outset

When you’re running a growing business, there’s a lot to do and a lot of things to consider – which is why it can be easy to overlook certain aspects when it comes to getting your IT contracts in the right shape.  

If you’re a consumer who has contracted specific tasks and services out to another company, it’s advisable to ensure that you and the other party are clear right at the outset about the following: 

  • What documentation you are using as the basis for your agreement (i.e. is it a template you’ve purchased online or has it been checked by your legal representative, if you have the benefit of legal advice?) 
  • What the expectations are for performance on both sides.  
  • Who is responsible for doing what (for example, are there expectations upon you to provide certain information to ensure that the provider is able to meet the specifications set out in the contract?) 
  • Who owns the intellectual property rights (IPR), depending on the nature of the relationship and service in question? 

On the other hand, if you are a provider of IT-based services, then it’s important to take into account the above points – as well as considering the size and nature of the business that you’re providing services for as a starting point. This can include: 

  • Which aspects of your service are standard and which are bespoke?  
  • What happens if the other business decides to upscale or change its model, i.e. is there a provision in the contract that sets out what happens in that eventuality?  

The latter point is certainly something our clients are increasingly seeking our specialist lawyers’ advice on at the moment as we move towards the end of 2021. 

The importance of a second pair of eyes on your IT contracts

A simple and low-cost way to minimise disruption and challenges further along the line is to seek professional help with double-checking your IT-related contracts over when enlisting outside help or providing a service to a new client, even if you are using a template that looks sound on the face of it.  

Likewise, if you are planning on making changes to or growing your business model in a way that will affect the IT services you receive or supply, then it’s a good idea to reach out for some support to ensure that the legalities are clear to both parties and in turn pave the way for your company’s growth in as smooth a way as possible. 

If things do go wrong, clear communication is key

We realise that relations can become inflamed very quickly when there’s a potential problem looming on the horizon, or if one party has misinterpreted the expectations of the other within the course of the contractual relationship. In this instance, it’s vital to keep communication as clear and professional as possible by opening a dialogue with the other party about what seems to be going awry and doing so as soon as things start to feel wrong.  

A lot of the time, full-blown disputes can be avoided in an informal way by arranging a meeting with the other business and simply having a conversation about how things can be put right and agreeing the way forward from that point onwards. If this isn’t possible, then we recommend opening a chain of communication in writing so that both parties have a written log of their respective positions.  

What if matters reach a stalemate, or the issue at hand is technical?

In this case, we strongly recommend seeking help from an experienced contract disputes solicitor so that a solution can hopefully be found as early as possible and in the most cost-effective manner. Our solicitors place a heavy emphasis on keeping disputes away from litigated court action wherever possible, and always look to determine whether an alternative method of resolving the dispute is possible. In legal terms, this is formally described as ‘Alternative Dispute Resolution’, or ‘ADR’ in short.  

To get a flavour of what ADR involves, you can read our introductory article What is alternative dispute resolution?, and also our more in-depth article Types of alternative dispute resolution methods: choosing the best one for your business, in our rapidly expanding Growth Hub.  

What if you want the reassurance of ongoing support with your IT contracts? 

At Harper James, we like to offer something a little different to businesses and that’s why we’ve put together pricing plans that provide entrepreneurial business support to suit all budgets and requirements.  

Not only does this option provide you with cost-effective legal advice, but it also means that you get bespoke legal support that’s tailored to the exact needs of your company and acts as peace of mind for when you need to make changes to your IT contracts – whether that’s due to upscaling, changing your model, or simply to ensure that you are keeping up with the demands of the fast-moving and growing world of online commerce. 

What next?

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