A Software Development Agreement governs custom software creation, specifying scope, milestones, and IP ownership. This playbook highlights negotiation on deliverables, acceptance testing, and post-delivery warranties.
Why This Matters: Lack of orderly exit provisions can result in service interruptions, data loss, and increased costs, hampering business continuity.
Negotiation strategy
If you're the Company:
Ensure that termination clauses are clear and provide sufficient time for transition. Negotiate for comprehensive data return and deletion terms to protect company data.
If you're the Developer:
Advocate for reasonable notice periods to allow for operational adjustments. Ensure that transition assistance obligations are clearly defined and limited in scope.
Essential elements
1
Termination Triggers
Conditions for contract termination.
2
Notice Periods
Timeframes for termination notice.
3
Post-Termination Obligations
Duties after contract ends.
Action framework
ACCEPT
Propose edits if termination triggers are too restrictive or notice periods are impractical.
EDIT
Reject clauses that do not provide adequate data protection or transition support.
ADD
Add clauses for data return and transition assistance if absent.
PRO TIP
Always ensure that termination clauses align with your business continuity plans and data protection policies.
Example clauses
FAVORABLE
Comprehensive Termination Clause
"Either party may terminate this Agreement immediately upon written notice to the other party if the other party materially breaches any of its obligations under this Agreement and fails to cure such breach within thirty (30) days after receiving written notice of the breach from the non-breaching party."
NEUTRAL
Standard Notice Period
"Except as otherwise provided herein, either party may terminate this Agreement for convenience by providing the other party with sixty (60) days prior written notice."
UNFAVORABLE
Inadequate Data Return Clause
"Upon termination, the Service Provider may retain Client Data indefinitely without obligation to return or delete."
Fallbacks
High-Risk Projects
In high-risk projects, ensure that termination clauses include specific risk mitigation strategies and extended transition assistance.
Cross-Border Agreements
For cross-border agreements, consider jurisdiction-specific termination requirements and data protection laws.
Technology-Dependent Services
In technology-dependent services, emphasize access continuity and operational continuity plans to prevent service disruptions.
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WEEK 1
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WEEK 2
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WEEK 3
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WEEK 4
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