Attorney: Dangers can lurk in software service contracts

Mark Grossman talks to the February gathering of the CIO Roundtable at Fordham University's Lincoln Center campus.

Mark Grossman talks to the February gathering of the CIO Roundtable at Fordham University’s Lincoln Center campus.

Contracts for providing software as a service must be carefully written in order to protect a company’s data once the life of the agreement runs out, an expert in technology law recently told a gathering of technology leaders at Fordham University.

Mark Grossman, an attorney with Tannenbaum, Helpern, Syracuse and Hirschtritt, said that such pacts, termed SaaS contracts and which provide for remote data storage and other data services, are not licensing deals. Instead they provide a service, much like a telephone company. And because information is stored on remote servers belonging to the service provider, explicit boundaries for use and ultimate retrieval of that data must be written into the contract, Grossman said.

The attorney was speaking at the monthly CIO Roundtable for chief information officers and others involved in technology, held at the university’s Lincoln Center campus.

Grossman said there are several items that customers must consider when negotiating a contract with a SaaS provider:

  • Don’t make assumptions
  • Don’t rely on intellectual property law
  • Make the agreement crystal clear about data ownership
  • Establish the confidentiality of the data
  • Include provisions for destruction of the data after the agreement is over

Customers should leave no meaningful ambiguity in the contract, said Grossman, adding one other key point.

“Make sure you get your data back,” he told the audience.

In addition, customers should seek to establish a reasonable time frame for retrieving the data once the agreement has ended. The passage of too much time between the end of the agreement and the retrieval of data, Grossman said, makes the unacceptable acceptable.

The CIO Roundtable, organized by Associate Professor Aditya Saharia of the Gabelli School of Business, meets monthly in the university’s Lowenstein Building at Lincoln Center. For more information, contact Saharia at saharia@fordham.edu.

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