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Demystifying M&A: What Every Business Owner Should Know
Under Canadian law, a software license agreement is usually governed by the law specified in the agreement or, if the governing law is not specified, the law of the jurisdiction that has the most real and substantial connection to the agreement. We have presented some key considerations we see in the market in relation to contracting standard products and services. Similarly, if the product and/or service is not (easily) replaceable by another product and/or service, the customer may want to negotiate a right to terminate the agreement in case the right to use the product and/or service is terminated. Where relevant, third-party vendors could also be invited to relevant governance meetings, enabling the customer to influence a certain level of control. This could include assisting the customer with bringing a claim against the third-party vendor.
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- This Background IP will be specifically ring-fenced to clarify that only prescribed use by the other party will be allowed.
- Today, we explore five vital clauses that every business should incorporate into their vendor agreements for a comprehensive framework to strengthen vendor partnerships.
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If the product and/or service is crucial for the service delivery, the supplier may want to specify that it will be excused from performing its obligations under the main IT agreement if this was the result of a customer failure. In such case, the third-party vendor could then qualify as a subcontractor of the supplier. If a supplier would use a standard product or service in the background (i.e. as part of its internal service organization) the customer could reasonably argue that such use must governed by the main IT agreement. Other examples include making available an IT ticketing tool for the delivery of incident management services and the installation of network vulnerability scanning software for the delivery of security services.
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