pal gov.tutorial6.session7.it contract
TRANSCRIPT
1PalGov © 2011 1PalGov © 2011
أكاديمية الحكومة اإللكترونية الفلسطينية
The Palestinian eGovernment Academy
www.egovacademy.ps
Dr. Samer Najjar
Tutorial 6: The Legal Framework of New Technologies
Session7
IT Contract عقود تكنولوجيا المعلومات
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About
This tutorial is part of the PalGov project, funded by the TEMPUS IV program of the
Commission of the European Communities, grant agreement 511159-TEMPUS-1-
2010-1-PS-TEMPUS-JPHES. The project website: www.egovacademy.ps
University of Trento, Italy
University of Namur, Belgium
Vrije Universiteit Brussel, Belgium
TrueTrust, UK
Birzeit University, Palestine
(Coordinator )
Palestine Polytechnic University, Palestine
Palestine Technical University, PalestineUniversité de Savoie, France
Ministry of Local Government, Palestine
Ministry of Telecom and IT, Palestine
Ministry of Interior, Palestine
Project Consortium:
Coordinator:
Dr. Mustafa Jarrar
Birzeit University, P.O.Box 14- Birzeit, Palestine
Telfax:+972 2 2982935 [email protected]
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© Copyright Notes
Everyone is encouraged to use this material, or part of it, but should properly
cite the project (logo and website), and the author of that part.
No part of this tutorial may be reproduced or modified in any form or by any
means, without prior written permission from the project, who have the full
copyrights on the material.
Attribution-NonCommercial-ShareAlike
CC-BY-NC-SA
This license lets others remix, tweak, and build upon your work non-
commercially, as long as they credit you and license their new creations
under the identical terms.
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Session’s ILOs
• a1: understand the legal frame for access
management
• a11: Enhance knowledge of e-contract
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Difference between IT contract
and other contracts
• In many aspects IT contract (contract
about an IT product/service) is similar to
any other contract:
- Offer and acceptance االيجاب والقبول
- Legal purpose الغرض المشروع قانونا
- Mutuality of obligation االلتزام المشترك
- Consideration
- Competent parties اطراف العقد المؤهلة قانونيا
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IT Contact
• Examples:
- Software Development,
- Web design,
- Web hosting,
- IT services
- Etc ……
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Legal framework of contracts
in general
• The Ottoman Majjalah Ahkam-Adlieh of
1876, (The Code Civil)
• Regulates the main principles in civil
transactions and contractual
obligations
• Freedom of Contract is guaranteed.
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Webhosting & Renting (store)
an example
IT product Renting warehouse
Accessibility …… keys
Maintenance Complicated Landlord or tenant,
easy to define
Backup Vital Not needed
other many few
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So what’s special about IT Contracts
• Ownership of IT products ملكية المنتج
Example:
While the implied legal meaning of buying a
tangible product is somehow straight
forward, the same thing cannot be said
about buying a software
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Deliverables of IT are different
• Output: المخرجات المطلوبة من المنتج
It is easy to design an IT product to get
certain output from it but:
- What are the needed resources ?
- How efficient is the procedure ?
- How stable are they ?
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Ownership considerations in IT contract
• Issues like:
- IP (intellectual property)
- Reselling
- Using
- Customising
- Maintenance & Upgrade
- Etc …
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Main Considerations of IT Contract
When Buying or Producing an IT product contract needs to specify clearly:
First deciding to buy generic IT (off shelf) product or ordering bespoke product is very important since the implications are very different in terms of serviceability, ownership, upgrade …, all need to be addressed correctly in the contract
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Are you an IT producer?
• Think you are legally safe within your
firm / organisation?
- Copyright is transferred from employee
to the firm
- Patents: have you got clear IP policy
signed by employees
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Whether Buying or Ordering
- Different aspects of ownership
• IP (Intellectual Property):
• Source Code ownership (in case of
ordering)
• Selling
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Other Aspect of IT contract
• Maintenance
- Fixing unforeseen problems (procedure
& time scale)
- Upgrades
- Future Compatibility (e.g. new OS)
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Acquiring IT Product
• Buying off the shelf
• Outsourcing
• In-house (making the product)
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Buying off the shelf
• Buying off the shelf
- Normally straight forward
- Cannot change terms & conditions of
seller
- Yet might need to negotiate support
and upgrades etc.. (these need to be
defined well in legal terms)
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Outsourcing
Outsourcing means the client has to
include certain legal clauses about:
• Audit
• Benchmarking
• Reversibility
• Maintenance
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Audit
• Vendor can audit the buyer use within
licence terms and conditions
• Buyer can audit transfer of sensitive
technology to third parties
(competitors)
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Audit - Elements
• Advance notification
• Frequency (should be kept reasonable)
• Who pays the cost
• Purpose (Regulatory, Contractual)
• Right to use services of third parties
(ensure confidentiality & impatiality)
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Audit - Consequences
What should happen in case of proved
violation to regulations or contractual
obligations
• Financial compensation
• Termination of contract
• Right to renegotiate contract terms
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Benchmarking
• Fast changes in technology means
changes in prices and service levels in
long term contracts.
• Hence the need for benchmarking to
ensure competitiveness, client should
insist on this right
• Benchmarking costs money, hence the
need to balance benefits with cost
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Benchmarking - Procedure
• Who decides which benchmarker
• Is there a right to refuse
• Who is going to pay
• Scope of benchmarking (Whole or
Parts)
• Criterion ( Cost or Quality …)
• Tolerance
• Reporting ( with conclusions?)
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Benchmarking - Consequences
• Thorny issue !!
- Accept conclusions automatically?
- Re-discussion, re-negotiation
- Right to opt out (early termination), and
which contract party has the right
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Reversibility
• Reversibility clause can take many
forms but, in essence, it just outlines
what the responsibilities of the contract
parties are should the contract
terminate
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Service Level Agreement - Procedure
• Objective description of service
• Measureable parameters
• Key indicators
• Supplying underlying data
• Period of measurement
• Glossary of terms might be useful
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Service Level Considerations
• Mechanism should be specified
• Measurability
• Failure to reach targets:
- Automatic penalties? Immediate?
Capped?
• Exceeding targets:
- Bonuses
• Liability: normally capped, ensure right to
claim other damages
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Making your IT product
IP consideration
Parties involved: employees,
consultants, subcontrators ….
• Copy right of employees work
• Patents resulted form employees work
• IP rights when using consultants
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Making your IT product
Legal Address
• Include provision in employment
agreements
• Provisions should be legal
• Consider legal consequences of using
open source programs
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Conclusions
• Close coordination between technical and legal staff in drawing IT contract (going for specialised law firms might be a good option for complicated jobs)
• Lawyers and managers need to understand each other language
• Comprehensive TOR (terms of reference) is a must
• Technical annexes very likely need to be added
• Definitions are always useful
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Conclusions
• Indemnity as a result of using the IT
product due to failure towards buyer
and third parties, need to be specified
• Service level agreements specified
correctly in terms of level (to control
cost) and procedure (to insure
efficiency)
• Benchmarking ( to insure
competitiveness) especially in long
term contract
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References
• François Coppens, Some specific issues of IT-related
projects, June 9th, 2011, Crids , Namur University
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Session End