Information Technology

Types of IT Contracts We Advise On

Our Commercial Team advises on a wide range of technology-related agreements, including:

• Software Development Agreements — For bespoke software built to your specification
• Software Licence Agreements — For off-the-shelf or customised software
• SaaS (Software as a Service) Agreements — For cloud-based platforms accessed on a subscription basis
• IT Support and Maintenance Agreements — For ongoing technical support and system maintenance
• IT Outsourcing Agreements — For outsourcing all or part of your IT function to a third party
• Website and App Development Agreements — For the design and build of websites and mobile applications
• Hosting Agreements — For server hosting and cloud infrastructure
• Data Processing Agreements — Required under UK GDPR when a third party processes personal data on your behalf
• Reseller and Distribution Agreements — For businesses that resell software or technology products
• Escrow Agreements — To protect access to source code if a software provider becomes insolvent or fails to perform

Key Issues in IT and Software Contracts

Development Methodology

If software is being developed for you, the methodology adopted has a direct impact on how your contract should be structured, as the methodology can impact upon pricing, scope, change control and acceptance testing, as well as IP ownership and risk allocation.

• Waterfall is a traditional, linear approach where the project moves through defined stages – requirements, design, development and testing – with each stage completed before the next begins. It works well when you have a clear specification from the outset and want a fixed price, fixed scope and fixed timeline.
• Agile is a more flexible, iterative approach, where the project is delivered in short cycles (called ‘sprints’). Requirements evolve as the project progresses, with the working software delivered, reviewed and refined at the end of each sprint.

Intellectual Property Ownership

One of the most critical — and most commonly misunderstood — issues in software development is who owns the intellectual property in the finished product. Unless your contract explicitly states otherwise, the developer will likely retain ownership of the code they write, even if you’ve paid for it. We ensure your agreement clearly addresses:

• Ownership of bespoke code and deliverables
• Licensing of any pre-existing IP or third-party components used
• Rights to modify, update and distribute the software
• Assignment of IP rights where appropriate

Specification and Scope

A detailed specification is essential. Without one, it’s almost impossible to determine whether the developer has delivered what was agreed. We help you build contracts that include clear acceptance criteria and a defined process for handling changes to scope.

Project Milestones and Payment

IT projects often benefit from a phased delivery approach, with payments linked to the completion and acceptance of defined milestones. This keeps the project on track and reduces your financial exposure.

Service Levels and Performance

For ongoing IT services (such as hosting, SaaS, or support contracts), service level agreements (SLAs) are crucial. These set out measurable performance standards — such as uptime guarantees, response times and resolution times — and define the remedies available to you if those standards aren’t met.

Liability and Risk

Technology failures can have devastating consequences for a business. Your contract should clearly allocate risk and address liability caps, indemnities, and your rights in the event of a breach or failure to perform.

Exit and Transition

What happens when the contract comes to an end? Your agreement should address data return or destruction, transition assistance, and ongoing licence rights — ensuring you’re not left stranded.

How We Can Help

At Nelsons, our Commercial Team advises businesses on all aspects of IT and software contracting. Whether you’re a technology buyer or a technology provider, we help you put in place contracts that are clear, fair and commercially practical.

We’re based in Derby, Leicester and Nottingham, but we advise businesses throughout the UK and beyond.

Call us: 0800 024 1976  Submit an enquiry: Complete our online enquiry form