IT Contracts Negotiation
By Osama El-Kadi 2008
While I have nothing against Lawyers leading any negotiation and believe they have a major role to play in negotiating complex IT contracts. Leading the contract negotiation in the majority of cases however, should be left entirely to trained commercial negotiators.
Lawyers should be important members of the negotiating team but not the lead. I also think that a great number of lawyers may also agree with me on what looks like a harsh statement to make. To clarify my statement let me say that IT contracts as a result of the negotiation approach taken can end up being either legally or commercially oriented.
You may say, so what, we have a contract any way and all our interests are protected; but are they?
To reply to this, I would say: There is no much difference in both types of contracts while things are going well and the solution is delivered on time without any technical problem and on budget. In fact in this case you do not really need a contract at all. Unfortunately, this is not the case in the majority of IT contracts whether they being, systems integration, outsourcing or buying hardware & Software.
Paradoxically as it may seem, when it comes to dealing with breaches i.e. Acceptance, Delivery, and Fixing Bugs and so on, a legally minded contract becomes a hindrance to resolving such breaches and getting on with the development in a sensible commercial manner.
A legally minded contract will rely heavily on the Law to resolve its breaches. We all know what it means to go to court to resolve contractual issues.
Basically the users suffer if they were the complainants while the solution never gets delivered and the cost of going to court will be hard to bear. The contract therefore failed in delivering its objectives: protecting the delivery of the solution that the users desperately need for their business to succeed.
A commercially minded contract on the other hand has been drafted with full understanding of all the potential issues and breaches that may occur. Such contract focuses “fanatically” on delivering the solution to the users and not merely getting the money back when things go wrong or involve the court to resolve the breaches.
Put another way, a legally oriented contract relies on the Court for remedies at the first instance of breach, while a commercially oriented contract relies on its own wits to remedy breaches and get on with the development. Such commercial contract states all the possible remedies for most of the potential breaches before hands, thus removing the need to go to court at the first instance.
Commercially oriented contracts are by their nature – their own court and judge. Of course both contracts have to be governed in the end by the laws of land and eventually if all goes wrong and all remedies failed, the Courts and Judges must decide.
About the Author
Osama El-Kadi is an International Strategic Negotiation Expert & Motivational Speaker Specializes in utilising Sun Tzu Art of War strategies in a unique and advanced strategic negotiation consulting, seminars, and training for organisations worldwide.
Osama El-Kadi career spans 28 years within UK based blue chip corporate companies. Starting from a Computer Analyst Programmer at NCR, to Chief Architect for worldwide banking systems, to Sales Director for CAI Europe, to General Manager Technology at the House of Fraser Group (including Harrods), to managing group procurement functions for the Automobile Association (the AA) through to his most recent position as Chief Procurement Officer in the Centrica Plc group of companies in the United Kingdom.
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