ISP Business Tools ...cont'd

By Michael Patenaude
Global X Change

Copyright © 1999 Global X Change, Michael Patenaude.

This document may be used in its unmodified form by non-profit organizations and others working for international development.

Introduction   |   Cash Flow Forecast   |   Project Estimating   |
Service and Product Differentiation   |   Contract Checklist   |   Marketing Plan Template

4.4 Contract Checklist

This document is intended to provide a list of possible information to include when writing a contract between a buyer and vendor of services and/or products.

Not all items are relevant in all contractual situations. In some situations, other provisions may be appropriate that are not listed below. This document is not intended to substitute for legal advice nor legal wording provided by a competent advisor in the relevant legal jurisdiction.

The information in italics is intended to explain the item suggested for possible inclusion in a contract.

Title of Contract – Examples: Software License Agreement, Provision of Internet Services.

Parties to the Agreement – Identifies the full legal names of the provider and the buyer of the service and/or product. Identifies any abbreviated names (in parentheses after the legal name) these parties use for the purpose of the contract.

Date of Contract – The date the contract is written.

Subject of Contract – Identifies generally services and/or products being supplied under the contract.

Deliverables – Lists specifically everything the vendor is to deliver to the buyer.

Restrictions – Identifies any limitations in use of the supplied services and/or products (e.g., software can only be installed and used by the buyer on one machine at any given time, with permission to make one back-up copy).

Payment Terms – Explains the frequency, amount and timing of payments to be made by the buyer to the vendor (often upon completion of one or more itemized deliverables).

Confidentiality – Identifies any restrictions on the distribution of information contained in the contract and/or in the deliverables.

Ownership of Intellectual Property – Outlines the ownership of copyright, patents, source code, executable code, documentation, content and all other deliverables supplied under the contract.

Warranties – Explains the duration and nature of the vendor’s obligations to the buyer regarding the performance of its deliverables. Also identifies any conditions that may render the warranty null and void and how the buyer is to notify the vendor of warranty issues.

General Provisions

Assignment – Identifies if either party to the contract can transfer the contract, in whole, or in part, to another party, and under what conditions (if any).

Liability – Describes what each party is and is not accountable for in case of non-performance or other possible problems. Identifies a maximum value (if used) to limit the amount of liability involved in the contract (often the total value of the contract itself).

Indemnification – An assertion, if applicable, that the vendor will protect the buyer from third party intellectual property rights claims against the buyer for deliverables supplied by the vendor, provided the vendor has the right to substitute alternative deliverables should such a situation arise.

Entire Agreement and Amendment – Explains that the written contract is the only description of the agreement between the vendor and buyer, regardless of what may have been previously stated or written down. Explains the process for updating the contract (often based upon mutual agreement, in writing).

Applicable Jurisdiction and Method for Dispute Settlement – Explains what the relevant legal demarcation is for the governing laws of the contract and describes how disputes will be settled (e.g., by the courts, by mediation, by binding arbitration).

Default – Explains the conditions that, if met, constitute default (or breach of contract) by either party. Specifies the method and timeframe available to the parties of the agreement to take corrective action, failing which the contract shall be considered null and void.

Waiver – An assertion that any delay or partial pursuit by one party of its rights against the other party does not constitute a forfeiture of the right to later seek further or complete remedy or redress to a situation, should the need arise.

Severability – Explains that if any of the provisions of the contract are rendered null and void, all other provisions remain in force.

Notices – Describes how and where the parties shall formally communicate to each other in the event they need to take such action (e.g., all notices shall be deemed to have been received by the other party within five working days if sent by regular mail to the addresses below).

Sign Offs

Parties to the Agreement – Formally identifies the legal names of the entities (people, companies, NGO’s, etc.) and their representatives (e.g., President, Vice-President, etc.) signing the contract.

Date – Identifies the date the party to the agreement signed the contract.

Witness(es)- Signature of person(s) formally witnessing the signing of the contract.

Company Seal – A place on the contract for a corporate seal to be imprinted (if required).