EM Law | Commercial Lawyers in Central London
Software maintenance and support
Software requires support for various reasons. First, no software is without errors: fixes are often necessary. Second, much commercial software is subject to continuous development in order to introduce new features or to adapt to changes in the software or hardware environment. Third, operators and users who are unfamiliar with the operation of the software may need technical or practical assistance. For this reason, suppliers often offer maintenance and support agreements in return for an annual fee.
Definition and scope of software maintenance services
Software maintenance agreements can cover a wide range of different maintenance and support services. It is necessary for the customer to give careful consideration to the type of the services that it requires. A detailed definition of the services also enables the supplier to charge an appropriate fee and to ensure, at the outset, that it has the resources to provide the services that the customer is expecting.
Software maintenance and support fees
There are a number of payment issues to consider:
- Is there a fixed charge for maintenance or do the charges fluctuate according to the number of hours or days of support the customer requires the supplier to provide in any particular week, month or quarter?
- Are the charges subject to indexation or other variation?
- Will the customer be charged separately for any expenses incurred by the supplier in providing the services or are they covered by the maintenance fee?
- Does the maintenance agreement require the customer to pay for fixes to which he is already entitled under a software development agreement?
Software versions supported
The customer should establish how many concurrent versions of the software will be supported by the supplier. If the supplier is not obliged to continue to support old versions, the customer will have to buy any new version that is issued if he wants to continue to enjoy support. With complex programs, this could involve the customer in expenditure on training and other items as well as the extra licence fees. For its part, the supplier does not usually want to invest the time and expense in supporting out-of-date versions of the software (at least on its normal maintenance terms) other than for a reasonable transitional period.
Software maintenance and support Service levels
The customer should try to ensure that the supplier commits to service levels for the support service, for example, minimum response times (on the phone and on site) and minimum “times to fix”. Failure to adhere to agreed service levels should result in the supplier having to compensate the customer normally in the form of “service credits”. There may be circumstances (such as where the software is used in operations of the customer’s business which are time-critical) where the supplier will find it hard to resist the imposition of service levels. In those cases, the supplier should ensure that the levels imposed are clear and reasonable.
Term and termination
The agreement should set out the length of the term and the parties’ rights to terminate (other than for breach or insolvency). Suppliers usually want to commit customers to contracts for a long initial fixed term. In some cases, the customer may also want a long fixed term (where, for example, support for business-critical software is not easily obtained elsewhere). In other cases, the customer may want the freedom to extricate itself from the agreement as quickly as possible (the supplier’s right to increase the maintenance fees should be considered in this context).
The customer should ensure that the supplier gives warranties as to the quality of the services. Commonly, suppliers warrant that the services will be provided with reasonable skill and care but customers should consider whether further warranties are appropriate.
Limitation of liability
The supplier should consider terms which limit its liability to the customer. Where software is critical to the operation of the business of the customer, the losses which the customer might suffer if the supplier fails to provide an adequate maintenance and support service may be significant and may far exceed the fees paid for the service. For that reason, the supplier should seek to limit its liability to the customer. However, such terms need to be carefully drafted so as to ensure they comply with the relevant legislation. It will usually be hard for the customer to argue against the supplier imposing some form of liability limitation, but it is worth considering what type of losses the customer might wish to recover in the event of the supplier’s breach and to specify that those losses will be recoverable (for example, maintenance fees paid under the contract, the cost of obtaining maintenance elsewhere, lost management time).
Infringement of third-party rights
Although the issue is not as significant as in a software licence, the customer should seek protection under the contract for any losses it suffers if any materials provided by the supplier turn out to infringe the intellectual property rights of third parties. This might include maintenance releases or new versions of the software or any other software, documents or other materials provided by the supplier during the course of the agreement.
Third-party maintenance providers
The considerations that apply to software licence agreements also broadly apply to maintenance agreements provided by the software owner. However, it is increasingly common for software maintenance to be provided by third parties who may be in a position to provide better resources or better rates for maintenance services than the software owner. In those cases, the parties will be concerned to ensure that the third-party maintenance provider does in fact have the rights to maintain the software, since modification or even storage or transmission of software without consent will infringe the copyright in the software and it is unlikely that there are any fair dealing or “right of repair” exceptions that would apply in this situation.
For any questions you may have concerning software maintenance and support contact Neil Williamson.