This article is written by Ilashri Gaur, from Teerthanker Mahaveer University. This article deals with the concept of technology contracts.

Introduction

Let us begin with the meaning of a technology contract. It can also be called an ‘electronic contract’; these are nothing but a legally valid contract which many of us agree in different ways while doing the transactions or maybe as an agreement or product meet in such transactions.

As now we all are dependable in various online transactions whether it is for the purchasing of products or goods or money transactions or for various other works so, with the rise in the technology in e-commerce, technological innovations and the constant need for the business needs to maintain and update existing technology which will be more attractive to businesses, general and IT legal practitioners and in house legal advisers. 

Legal practitioners and IT managers require a good understanding of information technology contracts as they deal with such activity on a daily basis. If we compare it with the period when the transactions are made through written receipt and bills with mentioned terms and conditions, it reflects some difficult and inconvenient time but today it is not so difficult and things can be done while sitting at home and the transaction didn’t carry any privacy issues.

Technology contract

With the modernization, a new thing is introduced in the business called ‘technology contract’. We all use many websites for different products and services like Amazon, Flipkart, Jabong, Snapdeal, Paytm, google pay and many more. The technology contract does not require any paper material or parties to be present in front of each other. Technology contracts made things so easy for us. It consists of certain rules and standards which one has to fulfil if they do not do so then that contract will not proceed further in that process and the transaction remains incomplete. There is no other way but to accept the privacy policy which is mentioned in the e-commerce companies to proceed further. 

The new era is known as the cyber or digital era. Nowadays as the internet is developing the contracts are also formed online. The technology contracts are time-saving and are really inexpensive. 

Types of technology contract

Generally, there are three types of E-contact:

Shrink Wrap Contracts

These contracts are license agreements that are packed with the products and usage of the particular product. The usage of products considers the acceptance of the contract by the consumer. The ‘Shrink Wrap’ describes the shrink wrap plastic wrapping which coats software boxes or the terms and conditions which come with the products on delivery.

The users always have the option of returning the software if the new terms are not according to his needs. These contracts are generally contained in software or CD Rom and using the CD Rom is considered as an acceptance of such terms and conditions.

Click Wrap Contracts

It is mostly found as a part of the software. It is also called a click-through agreement or click wrap license. These agreements are rigid in nature and there is no chance of negotiation in it. In this, the users have only two options whether to agree on the given terms and conditions or to disagree with the terms and conditions and not use that software.

It happens that sometimes terms and conditions may not appear on a particular web page or window but they always are available before acceptance.

Browse Wrap Contracts

It is a type of contract that is generally found in the websites and downloadable products. In this when the person agrees to the terms and conditions of the website only then he can access the content of that website. These contacts are published on a particular webpage and users have to find that because generally these contracts are hidden. 

Negotiating a technology contract

Have you ever tried to negotiate a deal for the software, computer equipment or for a technology contract? Let us understand the meaning of negotiation under technology contracts. Negotiation is a process by which people settle their differences. It is a process by which an agreement or contract can be done while avoiding disputes between the parties. There are three stages of negotiation:

Preparation

In this stage of negotiation, all the possible and necessary information are planned to collect. Preparation is done to identify what is intended with the negotiation and to find out what other negotiating parties intend. There is also a secondary plan in the event that most favourable conditions have not been met to achieve the objective. 

Development

This is the second stage after the preparation. The development comes when the parties sit down to negotiate until the negotiation is concluded whether the agreement is reached or not. During development, the parties involved in the negotiation are engaged in exchanging information. In this phase of negotiation, the disagreements come to the light and try that everybody is benefited. The duration of this stage is unspecified. It is generally not advisable to rush the contract as it is better to wait for the ideas to take shape.

Closing

It can be done in negotiations whether there is an agreement or not. Before finalizing the agreement, it is necessary to ensure that there is nothing left to be dealt with and that the parties involved interpret and understand in the same that have been dealt with during negotiation.

Once the negotiation is closed all the things will be recorded in writing. Because of this, all the parties involved get relaxed. Since it is necessary to detail everything, until that moment has been treated. The closing of the negotiation can also be due to the breach between the parties.

When the negotiation is completed, it is important to analyze how it has been developed and to identify the possible failures and ways to improve it.

Skills while negotiating

While negotiating one must have the knowledge or we can say skills to negotiate. One should have the ability to negotiate with the help of their communication skills and collection of interpersonal skills by using them together. A successful negotiation requires the two parties to come together and solve out an agreement that is acceptable by both.

Problem analysis to identify interests and goals

An effective negotiator must have the quality to analyze a problem and work according to the interests of each party. The problem must be well analyzed and that identification of the issues should be done. For example, a contract negotiation between the employer and the employee regarding the problem that the party disagrees may be for salary or benefits. So the negotiator should identify the issues from both the party and help them to settle things with compromise.

Preparation before meeting

A professional negotiator always prepares for the meeting. Preparation includes determining goals, areas for trade and stated goals. Negotiators study the history of the relationship between the parties and past negotiation regarding the same so that he can know the areas of agreement and common goals. Past outcomes and precedent can set a tone for current negotiations.

Listening skills

Negotiators have the skills to listen to the other party during the debate. It is important to listen to the parties so that negotiators can find an area for compromise during the meeting. Listening includes the ability to accurately read body language as well as verbal communication. Instead of wasting a lot of time negotiating, the skilled negotiator will spend more of his time listening to the other party.

Controlled emotions

A negotiator needs to have the ability to keep his emotions in control during the negotiation. While doing negotiations on the debatable issues can be frustrating, and if at that time the negotiator is unable to control his emotions then it can lead to an unfavourable result.

Communication skills

Negotiators must have clear and effective communication skills. There are chances of misunderstanding if the negotiator does not take his case clearly. During the negotiating meeting, an effective negotiator must have the skills to state his desired outcome as well as his reasoning.

Work as a team

The negotiation doesn’t need to be done as one side against the other. An effective negotiator must have the skills to take the work together and the parties as a team and maintain a cooperative atmosphere during negotiation. Those involved in a negotiation on both sides of the issues must work together to reach an agreeable solution.

Problem-solving skills

Negotiators must have the ability to solve the problems. As with the negotiation skills, a negotiator must seek a variety of solutions to problems. Instead of focusing on the ultimate goal for negotiating, the negotiator with skills can focus on solving the problems which may benefit both sides of the issues.

Ability of decision making

Negotiators with negotiation skills can act in such a manner that settles issues during the negotiation. It may be necessary during negotiating an agreement to agree to a compromise quickly.

Good relations

An effective negotiator has the interpersonal skills to maintain a good working relationship with those involved in the negotiation. It is necessary for negotiators to convince others without using manipulative actions and can maintain a positive atmosphere during a difficult negotiation.

Ethics and reliability

A negotiator with ethical standards and reliability provides a trusting environment for the negotiations. Both the party must trust each other that will follow through on promises and agreements. A negotiator must have the skills to carry out promises after negotiation ends. 

Common arguments

There are many issues which are come under common argument:

• • Price issue: – This is the first common argument. These are, as prices will be paid all up to cash, the promissory note is to be a part of the buyer’s consideration, whether the price will be calculated as on indebtedness free and cash-free.
  • Escrow issues: – Issues related to bond or deed like the amount of escrow for indemnification claimed by the buyer, the seller will negotiate that the escrow will be the exclusive remedy for breaches of certain defined fundamental representation.
  • Representation and warranties of the seller: – It covers all elements of a seller and the business operation of the seller. It includes financial statements, corporate authorizations, liabilities contracts, title to assets, compliance with the law and many more.
  • Representation and warranty regarding contract: – This will typically require a listening or description in the disclosure schedule of all material contracts of the seller. This includes employment and consulting contracts, stock options and incentive arrangements, real property and certain equipment leases, etc.
  • Benefits issues: – In this technology company where the use of stock options to motivate employees is more common than in the case of private companies, which will involve a number of important employees and benefits issues that will need to be addressed in the acquisition agreement.
  • Indemnification provision: – It means that provision regarding the compensation for the loss. This issue is regarding indemnification that if there is a breach of a representation, warranties or any other thing related to contract then the seller will indemnify the buyer for the loss.
  • Allocation of various risks: – In this, the argument is regarding who will bear the risk? How will it be justified?  If the material intellectual property claim has been declared against the seller who will bear the risk? So all these things are discussed.

Situations when negotiation is needed

The need for negotiation arises when the parties are unable to set their terms and conditions on their own as the disputes are arising related to the terms and conditions. Usually, then the parties hire a negotiator who does the negotiation for both the parties and solves all the disputes which the parties are facing.

Common mistakes not be done while negotiating a technology contract

The common mistakes which are not to be done while negotiating a technology contract. Those are:

• To negotiate effectively you need to have a plan for the same. If you don’t have a plan then you don’t have any option but to sign the contract and leave the odds to remain as it is. But if you have a good plan it won’t end up like this.
• To negotiate you should not make unreasonable demands as it limits your chances to demand more and it also falls your credibility. If you make them believe that you think unreasonable then they will think to work with you.
• Effective negotiators listen to all the talks and speak with the valid point as listening to the whole terms can help you to easily negotiate.
• At the basic level, negotiation is a series of exchanges. The negotiator should never do bidding against himself as it reduces the credibility of him.

Conclusion

To conclude this article, in short, it says that the technology contracts are nothing but the legally valid contracts which are not done on the papers it is done online while using various websites with set terms and conditions. As the negotiation in a technology contract should be done by keeping some points in mind to select a good negotiator and not to make the mistakes that negotiators often do.

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