Luke Montoya

Vendor Services Agreement Description and Structure

Agreement for vendor to provide services (and often deliverables) (e.g., maintain website, implement or upgrade software, IT staffing services)

Typical structure is general contract terms that can apply to multiple statements of work

What to Include in the Body of the VSA

General payment terms (e.g., days allowed to pay an invoice and if expenses will be reimbursed)

Term and Termination Confidentiality Background Checks Compliance with security policies

(client’s and/or vendor’s)

What to Include in the Body of the VSA

Ownership or license to the deliverables Warranties• Deliverables will substantially conform to

specifications or description in the SOW• Services will be performed in professional,

workmanlike, competent and diligent manner• Lack of viruses in any software deliverable• Lack of a public license used to create any

software deliverable

What to Include in the Body of the VSA

Indemnification by vendor• Personal injury or property damage caused by

vendor• IP infringement• Breach of terms (or certain terms) of the

agreement• Vendor’s employees claiming employment rights

from client

What to Include in the Body of the VSA

Insurance Lack of subcontracting and no

assignment of agreement Audit rights (financial records and

otherwise)

What to Include in the Body of the VSA

Miscellaneous• Governing law and jurisdiction/venue• Entire agreement• Amendment only through signed agreement• Waiver only through signed document• Severability• Survival of certain terms

What to Include in the SOW

Detailed description of the services Detailed description of any deliverables Detailed description of the fees and any

reimbursable expenses Acceptance of services and deliverables Schedule Other terms specific to the SOW

Ask the Audience Intermission

What do you consider to be “market” for a finder’s fee and conversion rates in IT staffing contracts (e.g., starting at an established percentage of the initial annual salary if the temporary staffer is converted to an employee of the client during the first 30 working days, with the percentage descending every 30 working days)?

What to Exclude

Limitation of liability in vendor’s favor• Limiting to only direct damages• Limiting to dollar cap on damages Exclusivity in favor of vendor Minimum payments

What to Exclude

Being locked in to long-term deal when your company would like to perform a proof of concept and pilot before making a long-term commitment (e.g., implementation of new software)

What to Exclude

Representations or warranties that you know are false

Covenants that you know your company cannot meet

Agreements to take actions that you know your company will likely forget to take (make these terms subject to vendor’s written request)