Sellers or Buyers contract in IT – the legal view?

Dave HenshallProcess

ContractShould you use the form contracts of the vendor or the customer when outsourcing information technology?

This is the question the editor of The Metropolitan Corporate Counsel asked in an interview with Paul G. Madison , Partner, Kelley Drye & Warren LLP. This is a subject dear to my heart and one I have commented on in previous post.

Madison rightly supports the use of the Buyers form as the best way to get what you want and cites:

  1. reflects the needs of your business. 
  2. allows similar terms to apply across all your IT service providers.
  3. form is a significant management tool for a large project or dealing with a group of long-term vendors.
  4. vendor’s willingness to work from your form agreement is a reflection of the vendor’s ability to provide the services and products sought by your company and how well the vendor may work with your company
  5. The contract should be sent with the RFP at the beginning of the vendor selection process, to increase the likelihood that the buyer’s form will be used and reduce the likelihood that there will be a long negotiation about boilerplate. The RFP should make it clear that the vendor’s response to your agreement is part of your decision-making process. If a vendor says we can’t use your agreement and another vendor with similar services can that is going to be a plus for that other vendor.

These points support the Purchasing Practice view expressed in our previous post and should serve as a call for action to those buyers still content to take the easy option of using the sellers form. S0 start working with the legal department now and develop your own form of contract for IT goods and services.

‘Caveat emptor’