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The Art of Drafting (IT Service) Contracts:

A few notes for the new drafter of contracts, particularly IT service contracts:


 Contracts construct a story. This means that they should tell a complete story. Use

the how, what, when, where, why principles to identify whether pieces of the story are

missing/ incomplete. The service may be delivered to the client at the client’s office

locations in 5 provinces or remotely. The service may be delivered for an initial period

of 12 months renewable for additional 12 month periods commencing on the first day

of each month. The service may be delivered by installing equipment at the client’s

premises or the client accessing remote services using their own equipment (and

network).


 Try to be chronological. Are there any qualifying criteria for signing up for the

service? How do you sign up for the service? What will you get during the service?

How will the service terminate? Are there any legal matters that survive termination

of the service?


 When the story is established, understand the laws that apply to the contract? If you

are drafting for the supplier, who is the supplier of the service? What is the nature of

their business? What sector specific regulatory or compliance obligations should be

dealt with? Privacy? Anti-bribery? Labour?


 Insert definitions that will add clarity to the contract and address verbosity in the

contract. Particularly for ICT related contracts, good definitions make good contracts

that translate technical subject matter into meaningful explanations of inclusions and

exclusions of the service. Be consistent in your use of definitions.


 Thread legal risk mitigation clauses. Often the concerns of the client raised in the first

meeting would establish their key areas of risk and legal risk? Provide for adequate

but responsible indemnifications, warranties and limitations of liability.


 In addition to termination clauses, early termination options need to be agreed. Under

what circumstances will either party be entitle to terminate the contract with reduced

or no penalties? Particularly because of consumer protection laws that restrict early

termination penalties, these clauses need to well considered and lawful.


 Establish whether the general clauses are appropriate and complete. Are the

governing laws and jurisdiction appropriate to the nature of the particular service and

supplier? Does the contract provide for electronic notices (legal correspondence)?

Are the force majeure clauses which deal with contractual breaches born out of

circumstances beyond the control of the parties adequate and relevant? Is the client

particularly prone to a particular risk such as the non-scheduled load shedding or

loss of resources?


 Finally, a strategic opportunity is presented by the drafting of a contract for a client,

there are certain permissions and consents that have enduring strategic purpose for

the client and these can be included (within reason). Ultimately however, the contract

must form the basis of a good (and durable) relationship between the parties. This

place meaningful consensus and construction as the principal pursuits.


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