Information technology projects frequently fail to deliver on expectations. They routinely fall short of the expected deliverables and take longer and cost more than planned. To the extent there is “blame” to be placed for these failures, it is often shared by both the customer and the vendor. The good news is that a major source of these problems is miscommunication and that is an area where spending time to implement a detailed agreement can save you future heartache.

The following are eight of the most critical clauses where I recommend spending your attention:

1. Clear milestones and timelines—It is hard to overstate the importance of establishing clear milestones and then setting hard timelines for achieving those milestones. Each milestone should include expected deliverables in as much detail as possible. Of course, there are times when an element of the project may include evaluation and analysis to set goals and parameters for the project. When that is the case, the parties can still establish details for the analysis stage, accompanied by overall timelines for project completion. Additionally, the parties can include clear language regarding change order processes to allow for natural project evolution. Consider also whether the arrangement would benefit from provisions outlining project managers and a meeting schedule, and requiring documentation of understandings reached in such meetings.
2. Intellectual Property Rights—Although it is counter-intuitive, the party paying is not the automatic owner of deliverables absent an agreement outlining specific assignment of intellectual property rights. Close attention should be paid to what exactly is being developed and/or delivered to the customer. From the customer's perspective, any deliverables that are uniquely developed for the customer should be owned by the customer. Conversely, if a deliverable is not unique, the customer should have clear license rights to use the deliverable in a manner that is consistent with the operation of its business. This should include the right, where appropriate, to create derivative works and to sublicense and/or transfer the license. Consideration should also be placed on when the assignment or license occurs. The vendor will want that to be upon payment in full. The customer will want the transfer or license to be automatic so that it will have the product done to date in the event the agreement is terminated prior to completion of the agreement (especially if it needs to transition the project to another vendor).
3. Transition Services—Speaking of transition, consider whether transition services are needed in the event that the agreement is terminated. Include details on the length of time and acceptable price to be charged for those services. In the event key personnel are critical to the project, the transition services clause can specify the continued assistance of those personnel. To the extent that the project supports significant data or content that the customer needs, the transition services provisions should provide for a timely transfer of those materials in a manner that is reasonably agreed upon by the parties. In some circumstances, a data dump is not an effective transfer and, for those situations, the customer should consider whether it needs to insist upon continued access to an archived instance of the vendor’s software or platform so that it can properly read and use its data post-termination.
4. Use of Third-Party Materials—It is increasingly common for IT solutions to be composed of a hybrid of vendor-owned proprietary materials and third-party materials/resources. Vendors will often seek to remove any warranties or liability for such third-party materials but the vendor is typically the only party in the transaction that has privity of contract with the third party. At a minimum, vendors should be required to pass through the representations they obtained from the third party. Ideally, they are pushed to provide ordinary course representations as if it is their product and to hold liability for failures of those representations.
5. Access to Source Code—In some cases, the technology being licensed or otherwise provided as a service is either unique in the marketplace (such that replacements are not easily found) or is mission-critical for the customer. In those instances, customers should consider whether they want to insist that the source code underlying the technology be escrowed and released to the customer on the occurrence of certain events, such as the vendor going bankrupt or deciding to no longer support the technology.In considering whether to insist on such an escrow, consideration should be given to the fact that the escrow is only as good as the vendor’s efforts to keep the assets up to date, that the release triggers will need to be very precise, and that there is a cost associated with setting up and maintaining the escrow. Additionally, if the customer does not have the right expertise to immediately start using the released materials then the escrow may not be the best solution for the customer.
6. Security of and Right to Use Data—Most technology solutions result in considerable exposure of one party to the other party’s data. Provisions should be included to address information security requirements, including expected standards of security to be met, timely notifications of breaches, business continuity and disaster recovery protections, and appropriate limitations on the use of data. Additionally, it is typical for vendors to desire to use data collected from customers in an aggregated and de-identified manner. Close consideration should be given to whether this is acceptable to the customer. In particular, consider whether, in light of the increasing use of artificial intelligence (AI) tools, language should be added to either prohibit or restrict use of data with or to train AI tools. 
7. Process Improvement—Technology moves very quickly. Ideally, your agreement moves with it. Pay close attention to the treatment of upgrades, releases, modifications and new versions of products and services and include language addressing exactly what will be provided to you and whether there will be extra cost for it. Especially in those circumstances where the deliverables are services, consider adding a provision requiring the vendor to use efforts to continuously improve its processes and services and to pass through those improvements to the customer. Such pass-throughs can be via updated products, services or functionality, or can be through decreases in price caused by gains in efficiency.
8. Service levels—Most technology agreements include service levels where a technology solution is being provided via a service model. Close attention should be paid to the details of these provisions. Common items to watch for include ensuring that the exceptions to what is being measured are not excessive, ensuring that the provisions include time lines for fixing problems rather than just responding to them, addressing situations where failures are constantly repeated (even if timely fixed), ensuring any credits are of a significant amount that they create incentives for the vendor to perform, and providing for escalation so that credits are not the only recourse for the customer in the event of ongoing problems.

Thorough articles could be written on any one of the eight areas I have highlighted in this article. Hopefully, this article can serve as a checklist for your next technology project and a reminder that spending time up front on the agreement between the parties can pay dividends later in the relationship for both customer and vendor.

Jacqueline Pennino Scheib, a partner in Robinson+Cole's intellectual property and technology group, has more than two decades of experience helping national and international companies preserve their intellectual property and achieve their business goals. She works with clients in the areas of intellectual property counseling, prosecution, and enforcement as well as on transactions related to intellectual property, technology, and corporate law. She has a particular depth of experience with clients in the technology, manufacturing, health care, consumer product, and food and beverage industries.

Reprinted with permission from the November 7, 2025 edition of Corporate Counsel© 2025 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com