Written by Martijn Berk – Senior legal counsel – IT, data & technology

About the usefulness of purchasing conditions for IT services


Lawyers are expensive
There are a number of prejudices about lawyers. I am used to the temperature dropping by a few degrees as soon as I enter the meeting room. In my opinion, this is (of course) wrong, especially because I prefer to work constructively and keep the interests of both parties in mind.

A prejudice that I regularly encounter is that lawyers are expensive. Now you can argue that a good lawyer costs money and limits risks and saves money in the long term, but the fact remains that a lawyer costs money. And even with a reasonable hourly rate, costs can quickly add up, so a contract assessment takes at least a few hours. And I always advise against quickly drawing out the main points: after all, the danger (or the genius) always lies in the details.

To save legal costs, the entrepreneur who purchases an IT service often agrees to the (general) terms and conditions of the other party. The entrepreneur negotiates the price and delivery date himself and the conditions are signed unread.

Save by drawing up general purchasing conditions
However, there is a middle ground between a tailor-made assessment of an agreement on the one hand and signing it unread on the other, namely: by drawing up general purchasing conditions. General purchasing conditions (GPC) are the mirror image of the supplier’s general terms and conditions. By using AIV yourself, in many cases it is not necessary to engage a lawyer.

As soon as you purchase a service, you send the AIV with the message that it applies to the possible agreement to be concluded. In many cases, the supplier – who wants to bring you in as a new customer – will agree to the AIV or make a counter-proposal on a number of items. And even if the supplier makes a counter-proposal, the involvement of a lawyer will be limited. If all goes well, your lawyer knows the set and can quickly assess whether the counterproposal is reasonable. And also in larger organizations, with their own buyers and lawyers, it pays to use AIV; If the supplier accepts the AIV, the buyer no longer needs to visit the legal department.

Two tips
Two more tips about drawing up and using General Purchasing Conditions:

1. First of all, it is important that the AIV you use matches the service or product you are purchasing. Larger organizations often have a set of AIV that are suitable for purchasing pens and copy paper. Attention is often also paid to staff who temporarily carry out work on location. But the purchase of an IT service (for example the implementation of a software package or the purchase of a SaaS service) differs materially from the purchase of pens and has specific areas of attention that you want to address in advance in your AIV. For example, you can consider recording process agreements if the supplier works according to the Agile methodology. You can also arrange how any errors in the software that come to light after acceptance are dealt with. Are these at the expense of the supplier or not?

2. Secondly, before you instruct your lawyer to draw up the AIV, it is important that you consider how one-sided (or not!) you want the conditions to be. If you choose to have a set of GTC drawn up, where all provisions are drafted in such a way that they are primarily to your advantage (for example, that the supplier is maximally liable for any damage, the supplier is responsible for any delay – even if caused by you has been caused – and that you have the option to terminate the contract for any minor shortcoming), it is likely that the supplier will not accept these conditions. Instead, the supplier is likely to make counter-proposals to many of these provisions and the intended result of time and cost savings will not be achieved. In some cases it may be legitimate to use one-sided conditions, but often a set of reasonable conditions gives a better result.

If you have any questions about this: I or the other senior legal counsel at House will of course be happy to help you draw up an appropriate AIV. Contact us at: info@house-legal.nl to keep your legal costs within limits!