Software Agreement – Indication of the Agreement’s Purpose

Nowsdays everyone can download or write up any standard software agreement’s, terms and conditions from software packages.  We are so used to copy, paste and modify contents that we sometimes forget to understand why we are drafting this document.

We have  a request from the Customer to release our program’s source codes for the purpose to keep them for disaster recovery.  We are concerned of any liabilities that may impact our Company in terms of misuse, reverse-engineer the codes, code compilation and deployment to other sites without the consent from us who is the Software Service Provider.  With the ‘consistent pressure’ from the Customer in wanting us to speed up this arrangement, my team went to one of the software package, use its terms and conditions to draft out the simplified software agreement.

However, this draft did not get through our Legal for consultation.  Instead we sent to the Customer, and they read, signed and returned the copy back to us for our signature to this agreement document.  Our director went back to the Legal to review this document and realized there were some clauses to be added to protect the Company’s liability.

Worst part, our director thought that this software agreement was drafted by the Customer but this was not the case.  After few emails’ exchange and an afternoon phone call with our business manager and Legal we have to honour this document and our director has no choice but to sign it.  Further clauses will be added to a master contract to cover the liabilities as we do not understand and include the purpose inside this agreement.  If we know the purpose, our Legal can identify and inputs all the possible clauses to protect the Company’s liability

This is a lesson learnt from everyone of us that in any contractual or agreement document that we IT needs to provide to our Customers, we need to go through the Legal and get them to do the rightful job to ensure we are all covered, utimately our very own objective is for the Company’s interests.


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July 2009
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