Software licensing and legal liability
To provide your customers with the service they expect and to run your business smoothly internally as well, today you can count on a range of digital solutions: websites, web shops and applications (apps) of course, but also tools that you can safely count among the foundations of your company, such as your CRM system or your ERP (enterprise resource planning). Many of these tools come in the form of software-as-a-service (SaaS) or platforms that are increasingly hosted in the cloud – i.e., you no longer have to install them on your computer from a CD-ROM as in the past, you just run them directly from the Internet. You no longer buy this software, you just acquire a – temporary – right to use it.
Fantastic, because all that software makes your life easier. But there are also a lot of legal risks involved. On the one hand for you as the company that brings in such a solution, but on the other hand if you are the IT specialist who develops, implements and maintains all this software
When you invest in software, you naturally want to be able to count on that often pricey investment. To begin with, the software must do what the vendor promised you. That seems obvious, but practice shows that it is not always the case. In addition, you must be able to rely on being helped out of a jam quickly, should something go wrong. After all, digital solutions are vulnerable: they can go offline due to a technical defect or at the hands of hackers. In that case, you need an efficient helpdesk that can get your tools back on track in no time. Imagine: the platform on which your web store is running suddenly goes offline; that can mean the same for you as a physical store that has to close its doors due to force majeure. And being closed, that means: no revenue.
If you are the developer and provider of that software yourself, you must clearly define your liability. You must indicate what your digital product or service does, and what you will do if your customer encounters a problem. And you must clearly define to what extent the customer can hold you responsible for damages. But you must also protect your intellectual property – after all, you don’t just give the brand new source code you write for a website, app or platform to your client as a gift.
In short, good agreements are vital. To avoid unpleasant surprises, put everything neatly in a contract. A SaaS agreement, for example, or a service level agreement. In it you make concrete agreements about exactly how you may use the SaaS solution, and how crucial that software is for your business. In an agreement, you can also make good arrangements about limiting your liability.
It is best not to rush into such a contract. Lawtree can help you, and we can also help negotiate it. This way you can be sure that you don’t forget anything, and that – once your customer starts working with your software, or your company grows visibly thanks to that great platform – you can always rest easy.
