Contract Negotiation
Some of the terms that bind you sit on the supplier's website, where they can change after you sign. Suppliers write their paper to protect themselves. We negotiate the commercial terms on your behalf, and your counsel keeps the final word on every legal one.
Book a conversationHow Technology Contracts Are Negotiated, and When You Need Help
A technology deal is usually layered. A master agreement sets the general terms, and each purchase is made through an order form or statement of work that carries the scope, price and timing. Around them sit the service level agreement, a data processing addendum and, often, terms posted on the supplier's website and incorporated by reference. Some data terms are required by law, not just good practice, such as a business associate agreement under HIPAA.
When outside help makes sense
- The supplier will hold regulated data, such as health or financial information.
- The agreement is large, long or critical to how the business runs.
- Your negotiating power on your own is limited, and you want more leverage at the table.
- The terms are spread across documents linked from the supplier's website.
When it does not
In our judgment, a full negotiation may be more than the deal needs for:
- A small, low-risk, clearly defined purchase on standard terms, or a new order under a master agreement you have already negotiated well.
- Standard terms a large provider won't change at your spend. There, the realistic goal is a focused review of the red flags and a conscious decision on the risk that remains.
Sometimes the right answer is to sign as is.
How the Paper Works Against You
Most of the risk in a technology contract sits in documents nobody negotiates. These are the ones to find first.
Whose paper you start from
Starting from your own contract sets the agenda for your data, compliance and service-level needs. Large cloud providers often offer standard terms they won't change; then the work is in the addenda and service levels around them.
Terms that live on a website
Terms incorporated by a link can change after you sign, and a supplier can revise them in ways that affect data use, service commitments or risk. Attach them as exhibits, or require notice of changes and a right to reject or exit if a change is materially adverse.
Order of precedence
When documents conflict, the order of precedence decides which one wins. Check that an order form or statement of work can't quietly override a liability cap you negotiated.
Click-through terms
Depending on the facts, a company can be bound by click-wrap terms accepted during installation, sometimes including where disputes must be heard. Know which click-throughs your staff accept and whether they have authority to accept them, and have your negotiated agreement expressly supersede them.
Buying through a reseller
A reseller doesn't remove the publisher's terms. A publisher may require you to accept its own customer agreement before a reseller can place the order.
What Negotiated Terms Protect
For IT and procurement leaders: terms you can hold a supplier to
- A right to leave after chronic outages, not only service credits on a future bill.
- Your data back in a usable format, with help while you move, whichever way the agreement ends.
- A signed agreement that overrides the click-through and website terms your staff accept.
- Redlines no longer bounce between your team, the supplier and legal. TREU carries the commercial back-and-forth alongside your counsel.
For finance: exposure you can size
- A liability cap weighed against the loss you could suffer, with a higher cap considered for data incidents.
- The cost of leaving early agreed at signature, not discovered in the order form.
- The right to assign to affiliates and successors settled before a deal, not during one.
What to Watch For: The Clauses Buyers Miss
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Service credits as the only remedy.
Under many standard service level agreements, credits are the exclusive remedy for an outage, are applied to future bills, may be capped and have to be claimed. Ask for a right to terminate after chronic failures, and to move services without penalty if the supplier fails its resilience obligations.
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Termination for convenience.
A right to leave early can be limited by the financial commitment in the order form, with fees still due. Don't assume you have one; negotiate the right and its cost at signature.
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Liability caps.
One large provider's standard terms, for example, exclude indirect damages and cap the rest at the fees paid in the prior 12 months, with carve-outs. Ask whether the cap is in proportion to the loss you could suffer, and consider a higher cap for data incidents.
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Data ownership and security.
State who owns your data and anything derived from it, and put security requirements in the contract, not only in a questionnaire. If you are a public company, your own SEC deadline, generally four business days after you determine an incident is material, makes the supplier's breach-notice timing worth negotiating.
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AI services.
Limit the supplier's use of your inputs and outputs to providing the service, not training its models, and check any limits on how you can use the outputs.
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Subcontracting.
Require consent or notice before the supplier subcontracts, with a right to terminate without penalty if it breaches that term.
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Assignment and change of control.
Supplier forms often bar assignment without consent, including by merger, and may treat a change of control as an assignment. Negotiate the right to assign to affiliates and successors before a deal, not during one, and decide what happens if the supplier is acquired.
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Exit and transition assistance.
Without negotiated terms, access to the service, and sometimes to your data, can end at termination. Require the return of your data in a usable format, a transition plan, continued service while you move and a rate card for transition help, whichever way the agreement ends.
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Most-favored terms.
A most-favored-customer clause needs a defined comparison group, a definition of breach, a way to verify it and a remedy. Without them, it is a promise you can't test.
This list is a starting point for your review. TREU is not a law firm. Your counsel gives the legal advice.
How TREU Negotiates a Technology Contract
See how we work-
Supplier identification
We take your requirement to suppliers across the market, and find out early which ones will negotiate on your paper and which offer only standard terms.
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Buying cycle
We negotiate the commercial terms alongside your counsel: price, service levels and remedies, termination, liability caps, data, assignment and exit.
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Implementation oversight and accountability
We hold the supplier to the dates and terms in the signed agreement through go-live, and check the first invoice against it.
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Client and supplier lifecycle management
We keep the signed terms and renewal dates on file, so nothing negotiated at signature is forgotten at the first business review or renewal, for the life of the agreement.
Questions Buyers Ask About Technology Contracts
What is the difference between an MSA, an order form and a SOW?
The master services agreement sets the general terms. Each purchase is made through an order form or statement of work that incorporates the master agreement and carries the scope, price and timing.
Should we negotiate on our paper or the supplier's?
Your own paper sets the agenda for your data, compliance and service-level needs. Large providers often won't move from their standard terms at ordinary spend; then focus on the addenda, the service levels and a clear view of the risk you accept.
Can a supplier change the terms after we sign?
Terms incorporated by a link to the supplier's website can be changed. Fix the version at signature, or negotiate notice and a right to exit if a change works against you.
Are service credits our only remedy for an outage?
Under many standard service level agreements, yes, unless you negotiate more, such as a right to terminate after chronic failures.
What happens to our contracts if we are acquired, or the supplier is?
It depends on the assignment and change-of-control clauses, how the deal is structured and the governing law. Negotiate the right to assign to affiliates and successors before a deal, not during one.
What should exit and transition assistance cover?
Everything you need to move without a gap: your data back in a usable format, and help and continued service while you change suppliers.
Does TREU replace our lawyers?
No. We negotiate the commercial terms with your legal team. TREU is not a law firm. Your counsel gives the legal advice.