IT Services Agreement Solicitors
An IT services agreement is a contract under which a supplier provides technology services, such as software development, IT support, managed IT services, implementation or consultancy, setting out the scope, deliverables, acceptance, fees, intellectual property ownership, service levels and liability.
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Adam Bernard Solicitors drafts IT services agreements for software developers, managed service providers and consultants, and reviews them for businesses buying technology services.
Technology projects are notorious for overruns and disputes. Most problems trace back to an unclear scope, weak acceptance procedures or uncertainty about who owns the code.
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Types of IT Services Agreements
• Software development agreements – bespoke software, websites and apps.
• Managed IT services agreements – ongoing support, monitoring and maintenance.
• IT support and helpdesk agreements.
• Implementation and integration agreements – configuring third-party systems.
• IT consultancy agreements.
• Cloud hosting agreements.
For subscription software, see our SaaS agreement page; for branded resale of an app, see white label app agreements.
Key Clauses in an IT Services Agreement
The essential terms are scope and specification, project plan, acceptance testing, change control, fees, intellectual property, service levels, security, data protection, liability and exit.
• Scope and specification – functional and technical requirements.
• Project plan and milestones – with dependencies on the customer.
• Acceptance testing – test criteria, timescales and what happens if tests fail.
• Change control – how scope changes are requested, priced and approved.
• Fees – fixed price, time and materials or milestone payments.
• Intellectual property – ownership of bespoke code, background IP and open-source components.
• Service levels – for support and managed services. See our service level agreements page.
• Security – standards, certifications and incident response.
• Liability – caps, exclusions and data breach liability.
• Exit – handover, transition assistance and return of data.
Who Owns the Code?
Under UK law, the author of software is usually the first owner of the copyright unless the author is an employee acting in the course of employment, so a customer commissioning software needs an express written assignment to own it. Computer programs are protected as literary works under the Copyright, Designs and Patents Act 1988, and assignments must be in writing under section 90. Many developers prefer to license rather than assign, keeping ownership of reusable components. The agreement should also deal with escrow of source code where the customer depends on the software.
Implied Terms and Liability
IT services must be provided with reasonable care and skill unless the contract validly provides otherwise. This term is implied by section 13 of the Supply of Goods and Services Act 1982. Liability caps are normal in IT contracts but must be reasonable under the Unfair Contract Terms Act 1977. Clear drafting of what counts as direct and indirect loss, including loss of data, is particularly important.
Data Protection and Cyber Security
Most IT suppliers have access to personal data, which means a data processing agreement is usually legally required. See our data processing agreement page and the UK GDPR. Security obligations should reflect current risks; the government’s Cyber Essentials scheme is a common baseline requirement.
Contractors and IR35
Where IT services are delivered through individual contractors or personal service companies, the off-payroll working rules may apply. See GOV.UK guidance on off-payroll working (IR35).
IT Services Agreement Checklist
Before signing an IT services contract, customers should check eight points.
• Is the specification detailed enough to judge success?
• Are milestones linked to payments?
• Are acceptance tests objective and timetabled?
• Who owns the code, and is open-source use disclosed?
• Are service levels and support hours defined?
• Is there a data processing agreement and appropriate security?
• Is liability capped at a level that reflects the risk?
• Is there an exit plan, including data return and transition support?
Managed IT Services and Outsourcing
Managed IT services contracts need particular attention to service levels, security responsibilities and exit. Because the provider operates your systems, the agreement should define responsibility for backups, patching, user access and incident response, and require the provider to support migration to a new supplier.
How Adam Bernard Solicitors Can Help
We draft IT services agreements, master services agreements and statements of work, review suppliers’ terms through our contract review service, and prepare non-disclosure agreements for early-stage discussions. See all our commercial contract services.
Call 0207 100 2525 (24/7) or book a free consultation to discuss your contract.
This page is for information only and does not constitute legal advice.
Frequently Asked Questions
What is an IT services agreement?
Who owns software developed by an external developer?
What is acceptance testing in an IT contract?
Do IT suppliers need a data processing agreement?
What is source code escrow?
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