What is the subject of the IT service provision contract
The IT service provision contract is a contract between the provider and the customer. Its subject can be a wide range of IT services, such as
- delivery of software or corporate application (SaaS)
- delivery and management of IT infrastructure
- delivery of information system management
- delivery of computer network management
- and other IT services
When providing services between the client and the service provider, it is necessary to take into account a whole range of service parameters. These parameters are the subject of SLA and vary according to the type of service. It must contain a specification of the provided service, duration, outputs, reward for its provision, and so on. However, discrepancies often occur on both sides during the contract period. Thanks to a quality description of SLA, they usually agree on compensation conditions or negotiation.
What is an IT service provision contract?
- a document signed between the customer or client and a person or company providing IT services.
- it talks about all the parameters that both parties fix in the contract (see SLA). It can also mention the resolution of possible discrepancies in the clause, such as a delay fee, the right to hold created content, etc. This agreement is then documented after it is signed by both parties and witnesses. In case of a dispute, the affected party can sue or file a lawsuit against the other.
Why is the IT service provision contract important
An IT service provider usually works with your data or provides some services or technologies, which may have access to your data or other sensitive information assets. IT service providers are therefore part of your information and cyber security. If the contract with the IT service provider is poorly constructed, your cyber security is also at risk.
What should an IT service provision or delivery contract contain?
Here are several things that should be part of an IT service provision contract. It includes both the SLA part and other contractual necessities.
Type of contract and service delivery
- One-time service, for example, a project (contract for work)
- Recurring services and activities, ongoing provision (provision of services)
- Service provided by an individual Full-time agreement, part-time or contractual agreement.
Duration
- in cases of one-time work or project, final deadlines must be stated
- in the case of ongoing services, the relevant performance deadlines are stated
Service details
- The contract states what services the client will receive and a description of their level, ideally in the form of an SLA
- As part of this, it is necessary to also mention the software used.
- Software plays an important role in the IT sector and can change the quality or compatibility of the product.
Payments
- The final amount of payment, method of payment, and type of payment are clearly stated.
- The same must be stated if costs are variable depending on working hours, days, or deliveries.
Notice period
- If either party wishes to terminate the contract before its due date, they must inform the other party in advance.
- The notice period determines the number of days before which the notice must be communicated to the other party.
Penalties and fines
- what measures need to be taken in case of non-compliance with deadlines
Ownership
- If the subject is software development, it must be clear who owns it.
- If there is a partnership sharing, it must also be stated along with the percentage of sharing.
Confidentiality clause, NDA
- An NDA clause helps protect all sensitive and confidential information exchanged during the validity of the contract
- Under this clause, both parties cannot share or leak any information about the other party.
Communication
- Responsible persons
- Contact details
- Escalation procedures
Additional clauses
- If there are any conditions that both parties have mutually agreed upon, they must be stated in the contract. Oral agreements have no value when it comes to legal matters.