Tech Contract Negotiation

As a veteran SaaS lawyer, I've watched Data Processing Agreements (DPAs) evolve from afterthoughts to deal-breakers. Let's dive into why they're now non-negotiable and what you need to know: A) DPA Essentials Often Overlooked: -Subprocessor Management: DPAs should detail how and when clients are notified of new subprocessors. This isn't just courteous - it's often legally required. -Cross-Border Transfers: Post-Schrems II, mechanisms for lawful data transfers are crucial. Standard Contractual Clauses aren't a silver bullet anymore. -Data Minimization: Concrete steps to ensure only necessary data is processed. Vague promises don't cut it. -Audit Rights: Specific procedures for controller-initiated audits. Without these, you're flying blind on compliance. -Breach Notification: Clear timelines and processes for reporting data breaches. Every minute counts in a crisis. B) Why Cookie-Cutter DPAs Fall Short: -Industry-Specific Risks: Healthcare DPAs need HIPAA provisions; fintech needs PCI-DSS compliance clauses. One size does not fit all. -AI/ML Considerations: Special clauses for automated decision-making and profiling are essential as AI becomes ubiquitous. -IoT Challenges: Addressing data collection from connected devices. The 'Internet of Things' is a privacy minefield. -Data Portability: Clear processes for returning data in usable formats post-termination. Don't let your data become a hostage. -Privacy by Design: Embedding privacy considerations into every aspect of data processing. It's not just good practice - it's the law. In 2024, with GDPR fines hitting €1.4 billion, generic DPAs are a liability, not a safeguard. As AI and IoT reshape data landscapes, DPAs must evolve beyond checkbox exercises to become strategic tools. Remember, in the fast-paced tech industry, knowledge of these agreements isn't just useful – it's essential. They're not just legal documents – they're the foundation for innovation and collaboration in our digital age. Pro tip: Review your DPAs quarterly. The data world moves fast - your agreements should keep pace. Pay special attention to changes in data protection laws, new technologies you're adopting, and shifts in your data processing activities. Clear, well-structured DPAs prevent disputes and protect all parties' interests. What's the trickiest DPA clause you've negotiated? Share your war stories below. #legaltech #innovation #law #business #learning

She sent me a 3-page NDA. It looked fine - until I saw the governing law clause. The clause said: “This Agreement shall be governed by the laws of Delaware, USA.” The problem? The client was based in Germany. The counterparty was in India. And the agreement was for IP collaboration on a new product line. Choosing Delaware law made enforcement harder, costlier, and riskier - for both parties. Here’s what I advised: • Switch to a neutral or mutually enforceable jurisdiction • Add dispute resolution via arbitration (not just litigation) • Specify venue and governing language for clarity Founders often assume a well-drafted NDA means they’re protected. But enforceability is everything - and it starts with the clauses people skip over. If you’re signing international agreements, get the basics right before it gets expensive. #NDALegalReview #StartupLawyer #RemoteLegalCounsel #ContractLaw #LegalForFounders #HKLawAndAdvisory #GoverningLawClause #CrossBorderContracts #FreelanceLegalSupport #InternationalStartups #ContractRisk #JurisdictionMatters

Silent Red Flags in a Contract Not all contract risks are obvious. Some don’t wave big red flags they sit there quietly, sipping coffee, waiting to ruin your day when it’s too late. Here are a few sneaky ones to watch out for: 1. Termination Notice that has a trap ex: “Either party may terminate by giving a 90-day prior written notice by registered post.” This sounds fine until the other party refuses to accept mail, leaving you stuck. Flexibility in notice delivery methods (emails, RPAD, etc.) helps avoid this. 2. Auto-Renewal that feels like some subscription you forgot to cancel ex: A contract that auto-renews unless terminated 60 days before expiry. Missed the deadline? Congratulations, you just bought another term of commitment. Always check renewal terms and negotiate flexibility. 3. ‘Reasonable Efforts’ without a guiding light ex: “The service provider shall take all reasonable steps to ensure 99.5% website up-time.” Reasonable to whom? The client? The universe? Always define obligations with measurable standards. 4. Confidentiality that lasts forever ex: “The receiving party shall never disclose or use the confidential information.” Never is a long time, longer than some companies exist. A well-drafted clause should account for practical realities (disclosures required by law, etc.). 5. One-sided dispute resolution ex: “All disputes shall be resolved by arbitration, and the Party A shall appoint the arbitrator.” Agreeing to this means you’re going to their turf every time. Always ensure jurisdiction and dispute resolution are neutral. 6. Hidden costs in referenced documents ex: The main contract looks great, but a linked “Standard Terms & Conditions” document quietly adds extra fees, penalties, and other nightmares. Always review referenced docs. for no surprises. 7. ‘Best efforts’ vs. ‘Commercially reasonable efforts (CRE)’ ex: “The contractor shall use its best efforts to complete the project on time.” Best efforts could mean working 24/7 with unlimited resources. CRE = practical, business-minded execution. Choose wisely. 8. Non-Compete clauses that overreach ex: “The employee shall not engage in a competing business at any time in the future.” is a legal life sentence. Restrictions ought to be reasonable in scope, and duration. 9. Force Majeure that helps one side ex: “In case of an unforeseeable event, Party A is excused from obligations.” And Party B? Well… good luck. Force majeure should work both ways. 10. Silent Assignment clauses ex: You sign a contract with a trusted vendor, only to realize they’ve assigned their obligations to an unknown entity. Avoid unpleasant surprise, and require written consent before assignment. A little ambiguity is unavoidable. But when vagueness creates risk, or gives one party too much control, that’s when alarms should go off. #ContractReview #InHouseCounsel

7 hidden traps in design & construct contracts. That impact contractors profit margins big time ($): Are you signing up for more risk than you realise? Australian D&C contracts contain hidden traps that even experienced contractors miss. Here's what you need to know: 1. The Preliminary Design Trap Principals hand over sketchy, incomplete designs, then contractually wash their hands of all responsibility. Under AS4902, contractors must check these "Project Requirements" despite their preliminary nature, while simultaneously being deemed to have already completed their review before signing. 2. The Unlimited Liability Nightmare You're contractually bound to deliver work that's "fit for stated purpose" with unlimited liability - even when working from someone else's flawed design concept. Miss something in your review? That's entirely your problem. 3. The Deleted Protection Clause Most contracts deliberately delete the clause making principals liable for errors in their PPR. The result? You inherit all their mistakes with zero recourse. 4. The False Assumption Risk Contractors routinely assume preliminary designs were competently prepared - an assumption I've seen proven wrong countless times. Remember: those preliminary sketches weren't made with construction reality in mind. 5. The International Double Standard While FIDIC Yellow Book gives contractors 28 days AFTER commencement to find errors that an experienced contractor wouldn't have discovered, Australian contracts deem you to have ALREADY completed your review at signing. 6. The Post-Contract PPR Modification Even more troubling - some principals modify requirements after contract execution, creating endless variation disputes that drain your profits and timeline. 7. The Zero-Compensation Review Requirement Unless contractors are brought in early (ECI) and paid for the design review upfront, this risk allocation remains fundamentally unjust. You're essentially providing free engineering services while assuming all the risk. Three Essential Safeguards Every Contractor Needs: 1. Commission a comprehensive pre-contract design review by qualified parties 2. Document ALL PPR inconsistencies in writing before signing 3. Push for Early Contractor Involvement with compensated design review Because in Australian D&C contracts, what you don't thoroughly check before signing will almost certainly impact you afterwards. P.S. Need help navigating D&C contract risks? DM me to discuss how to protect your bottom line.

When I started drafting contracts for international clients, I made a checklist that I still rely on today. Sharing it with you because it truly saves time, errors, and embarrassment: 1️⃣ Title Make it clear, industry-recognized, and aligned with the relationship. 2️⃣ Recitals This is the story behind the contract. When written well, it removes 80% of future confusion. 3️⃣ Definitions Your in-house glossary. One well-defined term can prevent an entire dispute. 4️⃣ Scope of Work (SOW) Who will do what, how, when, and with what deliverables. If something goes wrong, this is the first clause everyone opens. 5️⃣ Term & Termination Start date, end date, renewal, and exit routes—because no contract should trap either party. 6️⃣ Payment Terms Amount, timeline, taxes, milestones, late fees. Include everything. 7️⃣ Confidentiality Protect what must not be shared. Especially in founder–freelancer or startup–consultant relationships. 8️⃣ IP Rights Don’t assume ownership. Write it. Highlight it. Reconfirm it. 9️⃣ Liability & Indemnity Your risk-management heartbeat. Saves clients from unnecessary surprises. 🔟 Governing Law & Dispute Resolution Because knowing where a fight will happen is half the battle. If not structured properly, you might end up losing more in travel than in litigation fees. I hope this helps you draft with more confidence and fewer mistakes. I am attaching a more detailed document with this post that is downloadable. Happy learning! --------------------------- Hi, I'm Arshita, your legal mentor and compliance partner. I guide law students and legal professionals through mentorship and practical training, and I work with founders and startups to simplify contracts, compliance, and legal issues. If you are a law student or legal professional who needs guidance with internships, jobs, freelancing, or legal consultation, you can book a consultation call here: topmate.io/arshita_anand

50-point checklist for drafting an error-free contract [This list is non-exhaustive] 1. Understand the Client's Commercial Objectives, not just legal ones. 2. Identify All Parties with their correct legal entity type (LLP, Pvt Ltd, Individual, etc.). 3. Determine Governing Law & Jurisdiction 4. Define Scope of Work/Services/Obligations 5. Discuss Worst-Case Scenarios upfront before drafting the contract. 6. Use Consistent Defined Terms [Add a proper definitions clause] 7. Avoid Ambiguous Language 8. Follow Standard Clause Sequencing [Use MS Word efficiently here to save time] 9. Use Active Voice Instead of Passive 10. Keep Sentences Short & Simple 11. Payment Terms with Clear Due Dates 12. Confidentiality Clause should have Survival Period post-termination. 13. Intellectual Property Clause must distinguish between Pre-Existing IP and Newly Created IP. 14. Limitation of Liability should always be capped to the contract value or fees paid. 15. Indemnity Clause should cover Third-Party Claims and not just direct losses. 16. Time is of the Essence Clause (if applicable) 17. Milestones with Deadlines 18. Force Majeure Clause 19. Verify Use of Capitalization for defined terms throughout the document. 20. Perform a Reverse Reading (from end to start) to catch overlooked errors. 21. Dispute Resolution Mechanism 22. Termination Clause must specify Consequences of Termination like pending payments and handover of materials. 23. Penalty for Breach 24. Insurance Requirements 25. Include a Liquidated Damages clause with clear calculation methodology. 26. Proper Numbering of Clauses 27. Consistent Font Style & Size 28. Page Numbering 29. Use Bullet Points for Long Obligations rather than one big paragraph. 30. Schedule/Annexure Numbering 31. Grammar & Spelling Check 32. Cross-Reference All Definitions 33. Check Consistency of Dates 34. Remove Repetitive Terms 35. Verify Use of 'Shall', 'May', 'Will' 36. Check Stamp Duty Requirements 37. Check Consistency of Notice Periods across different clauses. 38. Foreign Exchange Rules (if cross-border) 39. Include an Acceptance Testing Process with Deemed Acceptance timelines. (If Applicable) 40. Data Protection Obligations 41. Signatory Details (Name, Title, Date) 42. Witness Details and Signature (if needed) 43. Number of Copies to be Executed 44. Check for Blank Spaces 45. Review Contract Length as per your client's requirements 46. Add Table of Contents for Long Contracts [Very helpful in navigation] 47. Number Definitions Alphabetically for better readability. 48. Use Grammarly or AI tools for initial proofreading. 49. Review Defined Terms separately to check for unused or inconsistent terms. 50. Create a separate Obligation Matrix to clarify what each party is supposed to do. What would you add to the list? Mention in the comments. #contractdrafting #agreement #contract #checklistfordrafting

The Request for Proposal process (RFx) is the most critical area for Procurement. But, it's largely misunderstood. Teams waste time delivering a process that doesn't drive the expected outcomes. Strategic Procurement 101: 1. Why do we need the new product or service? "Creativity and innovation are not something you can flowchart out” - Tim Cook, Apple CEO. I’d argue Strategic Procurement is, at its heart, about helping the business deliver change. And for every new service, there are 5 metrics to consider: - Value. Will the new service add value for the customers? - Usability. Will the business be able to use it effectively? - Viability. Can our business support it? - Feasibility. Can it be done (technology)? - Ethics. Should we do it? What will happen if we throw these questions into a straight jacketed RFP? We lose the opportunity for creativity and innovation. This approach results in standardisation and more of the same. So, we would like to understand: - How can we use the RFx processes to come up with better ideas? - How can we validate those ideas before the implementation? And the answer is a fully collaborative approach with suppliers. --- 2. When Does it Happen? Continuous Discovery. - The goal of good Procurement is to discover the best supplier to build a long-term partnership with. Strategic Procurement results in a fully validated outcome. In particular, high-risk assumptions are tested ahead of contracting. --- 3. Who's Responsible? Some say the Procurement Manager has a say in the supplier selection, and end users and Subject Matter Experts (SMEs) just feed into that process. Have you heard that before? It hurts my ears because Procurement should maintain complete objectivity. Ensure end users and SMEs are pivotal in the evaluation process and that their primary roles as evaluators are understood. And take a flexible approach to the evaluation criteria depending on the input from the suppliers. Procurement Managers may be category literate, but they are not always category experts. -- 4. What process should be used? There are three distinct options which are often misappropriated. - The Request for Information (RFI) should be used to gather information about potential suppliers, their capabilities and solutions. It's never a final decision tool though. It should simply be used to understand the options. - The Request for Proposal (RFP) is used to solicit detailed proposals from suppliers and it's here that true supplier collaboration is needed. An open-minded approach where you work with suppliers to explore the opportunity based on their expertise, not yours. - The Request for Quote (RFQ) is reserved for obtaining price quotations when the service is already well defined. -- Do you agree with the above? What's one thing you'd add? Hope that helps! --- 🎁 P.S. 13,000 +Procurement subscribers get weekly insights from me direct to their inbox (it's free) https://procurebites.com/

As more and more organisations deploy AI across their businesses - have they updated their contracts language in line with their technology? I want to outline some examples of the extent to which novel AI specific considerations now may now need to be included in your technolgy contracts. Feature Engineering - Imagine an art curator handpicking pieces for an exhibition. In the AI world, "feature engineering" is akin to this selection process, extracting specific data elements (or "features") to aid AI in decision-making. If chosen haphazardly, it can skew AI outcomes. Errors in feature engineering can introduce biases or produce results that create liability, both of which can have significant contractual and compliance implications. Contracts may require expert oversight of this process to ensure AI bases its decisions on relevant and unbiased data. Normalisation and Pre-processing - Let's liken data from different sources to runners of varying abilities racing together. To ensure a fair race, we might adjust their starting positions. "Normalisation" does something similar for data, adjusting values to a standard scale. The "Z-score method," for instance, adjusts data based on its average value and variability. Data quality and integrity checks must also accompany normalisation to assure that the AI system isn’t making decisions based on corrupted or incorrect data. AI contracts might mandate the use of such methods, ensuring uniformity in training data. Version Control for Data - Authors have multiple drafts before a final manuscript. For AI data, "DVC" (Data Version Control) serves as a tracker, monitoring data changes. Including this in contracts may become essential in transparency and data governance regulatory obligations under the AI Act. Confidential Computing - Solutions such as Homomorphic Encryption offer a way to compute data in encrypted form which may be required under legislation such as DORA. But it’s worth mentioning that it adds computational overhead, which has cost and environmental implications that should be accounted for in a contract. Feature Selection Algorithms - From a vast dataset, identifying the most influential elements is crucial. "RFE" (Recursive Feature Elimination) is a method that ranks data elements based on their impact. In addition to RFE, there are various other algorithms like LASSO, Ridge, and Elastic Net, which might be more suited to certain types of data or legal requirements. Specifying flexibility in choosing feature selection methodologies in contracts might be a prudent approach. Contracts that specify such methodologies ensure AI focuses on the most significant data, enhancing its accuracy. The point is, with AI, we’re not in Kansas anymore. The typical SaaS agreements or MSAs etc that we are used to from a technology standpoint may no longer be sufficient on their own to adequately deal with the complexities of deploying AI systems across your business.

One of the worst feelings working on contracts is when you knowingly sign a terrible contract. You may have no leverage and be stuck with the counterparty's standard terms. You may be doing a deal with a counterparty only willing to move forward on one-sided terms. Of course, you can always choose to walk away and not sign. That's what most lawyers will advise because doing no deal is often better than doing a bad deal. But sometimes companies make a risk decision that doing no deal in this case is a worse outcome than signing a bad deal. While you may be stuck without typical contractual protections and options, there may be things you can do before and after you sign the contract to protect the company. 1. Try to shorten the term of the agreement – Signing unfavorable contracts is risky, but it becomes much riskier when you are locked in for a longer term. Try to reduce the term to your minimum viable length that still makes it worthwhile to preserve other options if things turn out as you fear. 2. Shift what you can to the statement of work or order form – Moving concepts to the statement of work (SOW) or order form may make it easier to make changes during the term. Most companies have less review and scrutiny over those changes. Your relationship lead at the counterparty may be able to make adjustments that you wouldn’t get through as a formal amendment. 3. Reduce the purchase scope even if it leads to a higher price – See if you can reduce the minimum purchase quantity or feature set, even if it means paying more per unit or hour. Think of that additional per-unit fee as a risk premium. It may give you options to reduce the amount of damage or loss you face from the deal if things go sideways. 4. If payment terms are the problem, talk to Finance about the best strategy – If the payment terms are onerous or have severe consequences for any delay, have a conversation with your Finance team. You may be able to reduce that risk with prepayment or extra monitoring to ensure no problems occur. 5. If you are stuck with low liability limits, look into additional insurance or resources – If you are facing low liability limits, explore operational strategies to reduce the risks. These include getting additional insurance, adding more technology to monitor and track, or hiring more people to oversee the work. These things make it easier to stop little problems from becoming big ones. 6. If it is just a bad deal overall, start evaluating other vendors and solutions – Work in parallel to identify alternative paths that might meet your needs. That diligence may clarify available options or your lack of them. You should also consider how to expand your options through operational changes or hiring for specific skillsets. Don’t wait for trouble to happen. Do what you can to reduce your vulnerability before and after entering into a terrible deal. What other advice would you add for dealing with terrible contracts? #Contracts

Procurement: Is your contract management setting you up for success or for failure? Spot the green flags! Procurement Excellence | 30 NOV 2025 - Contract management can make or break revenue, compliance, and partnerships. Spotting "green flags" ensures you’re not just surviving, but thriving. Here’s what excellence looks like: Here are 9 Contract Management Green Flags: #1. Centralized Digital Repository ↳Contracts stored in one cloud-based location. ↳Use CLM tools like DocuSign or Icertis. #2. Automated Alerts for Key Dates ↳Renewals, expirations & obligations auto -reminders. ↳Set up calendar syncs 60-90 days before deadlines. #3. Standardized Templates & Clauses ↳Approved templates reduce negotiation time by 40%. ↳Create a "playbook" to reduce negotiation time. #4. Clear Ownership & Accountability ↳Assigned contract owner (not "someone in Legal). ↳Define roles drafting, approval, compliance in workflow. #5. Risk Scoring Before Signing ↳Grade contracts (low to high risk) pre signature. ↳Embed compliance checklists e.g. data privacy #6. Collaborative Negotiation Workflows ↳ Stakeholders comment in real-time. ↳Use Microsoft 365 co-authoring or Ironclad. #7. Post-Contract Award Audits & KPIs ↳Quarterly reviews track performance e.g. SLAs ↳Monitor "value leakage" e.g. unused discounts #8. Proactive Stakeholder Training ↳Ensure teams understand contract impact ↳Host quarterly "contract clinics" for FAQs. #9. Simple Amendment/Renewal Processes ↳Changes take daywith pre-approved terms. ↳Use redline comparison tools for faster iterations. Best Practices ✅Digitize - Stop email chains & shared drives. ✅Start Small - Standardize top 3 contracts e.g. NDAs ✅ Measure ROI - Track cost savings/renewal delays ✅Negotiate Smarter - Use historical data to benchmark terms e.g. payment windows Great contracts aren’t signed, they’re managed. Spot the green flags early, and you’ll turn risk into reward. What’s your #1 contract management green flag? ♻️ Share to help your network avoid red flags. ➕ Follow Frederickfor more Procurement insight. #ContractManagement #Procurement #RiskManagement