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Protective clauses in software outsourcing deals

10/24/2011

The business world and globalization are getting closer everyday. The concept of outsourcing work to different countries is starting to become second nature, even to small business owners. Software outsourcing deals are becoming more common, and with that, so are defensive clauses in licensing offshore outsourcing contracts.

These defensive clauses are being added to software contracts to protect business owners from fraud or in the case that a technology or service vendor closes its doors, says TatvaSoft. A business should make sure when they draft outsourcing contracts, they include some very important information that will have them covered further down the line.

Some advised protection clauses pertain to who owns the information of the company, the time frame of the contract, licenses and issues relating to third party involvement. Third party involvement is important because it is such common practice in software outsourcing. A business should establish, if needed, who would administer control over a third party.

Other clauses that should be included rely on service level agreements, system security, ownership of assets, intellectual property rights, issues relating to human resources and contingency management.