In this case, and as supported by most of the commenters, I think Ken’s admitted lack of knowledge in the subject matter of licensing is hurting his assessment.  Software licensing folks don’t like wordy contracts any more than anyone else.  We’d love to get rid of unnecessary phrases or redundancies.

But I’ve actually seen a license terminated at the will of the vendor as a result of a lack of the word “irrevocable”.  And I’ve seen one restricted because of the lack of the word “world-wide”.  So for me, simple language gives way to extra descriptiveness in the license grant just from a risk management perspective.

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

The same issue applies to contracts professionals. Even in a down economy, we’re still seeing a steady stream of contracts to review - a result of discounts and other incentives to complete acquisition projects. But we’re an overhead expense, so we’re not getting added help to get the deals done.

Here are a few suggestions on how to increase your productivity:

1. Templates, templates, templates. I obviously can’t say this enough. Draft templates for any document you’re going to use more than 3x/year. Software Licenses, Services Agreements, NDAs, and Statements of Work are all ripe for template creation. Don’t have a template or don’t feel you have the time to write one from scratch? No worries, visit the forum to get templates from Stephen Guth. He’s giving away some of his best work, so I would take advantage of it if I were you. Oh, and if you have a template you’re willing to share, create a post for it, send the template to me and I’ll make it available to everyone.

2. Convince the other side to use your templates. Yeah, so this is a corollary to #1, but having the template isn’t enough. You need to actually get the other side to review it to make it worth while. As a procurement person, my goal was to have 80% of all deals start with my paper. I would say almost anything to get the other side to use my template (but it was all true stuff): I would review their review of my template faster than I would review their templates; I couldn’t get to their templates for several weeks (and deals wouldn’t get done on their deadlines as a result); I could be much more flexible if they started from my templates (which is very true, since my templates are my absolute BEST case scenario); and in some cases, like for NDA’s, I wasn’t allowed to use anything BUT our templates (I actually have had policies changed to make sure I’m not stretching the truth when I say this). Do NOT lie… but don’t cave easily. If you have to use their template, treat it as a negotiation point in and of itself and get something in return for it.

3. Get your business folks to include you in the process MUCH earlier than we normally are (which is somehow always just 2 days from the end-of-the-quarter deal that HAS to be done). Just knowing what is coming down the pipeline can allow you to plan with much greater accuracy and efficiency. Convince the business person of the benefits to including you earlier and they’ll do it out of self-preservation needs alone. In other words, make it all about them and you’ll have no resistance to your request.

4. Contracts drafted by lawyers tend to be in two columns and incredibly small fonts (I dunno’ why that is… we didn’t learn it in law school). But make the darn thing readable to help your eyes and actual review process. Either use MS-Word’s View option to increase the percentage (125-150% is usually pretty good); or increase the entire font of the document to something 12pt or higher during the review and reduce it back when you’re done. Learn how to use Track Changes, and if your organization uses forms plus amendments rather than changing documents inline, get them to change their procedure to allow inline changes.

5. If you have a little bit of budget, there are a few tools that will also help you work more efficiently. I’ve listed some of my personal favorites in the Products/Other Recommended Purchases area. But there are two things I didn’t list. First, you need a large monitor (again, see #4 about size). Twenty-four inch or more are fairly cheap these days. And at that size, you can have 2 pages on screen side-by-side at 100%, perfect for document comparisons or large copy/paste jobs. Second, you need a software product called DeltaView (it’s now called WorkShare Professional). MS-Word has a “document compare” feature, but WorkShare is better for larger documents with more random changes (where there are large quantities of text that have been moved around). However, make sure you learn how to use document compare, as it can insert changes with Track Changes, which really helps.

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

Given the title of the article, Courts Turn Against Abusive Clickwrap Contracts, it would appear that Wired is attempting to sensationalize just a little.  The truth is that the courts’ rulings aren’t that surprising (even if they came from California, a state known to be a little “fringe” about their opinions).  The courts are applying some general contract priciples to EULA’s… which vendors have been lucky enough to avoid for the last decade.  It’s about time.

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

Bad B-movies aside, it’s true.  There are some sections of a contract that are intended to continue to live long after the rest of the contract is terminated or deactivated.  These sections “survive” because they contain obligations that both parties would want to continue - such as confidentiality.  This makes a lot of sense, actually.  If you and I are going to do a deal and we share some confidential information… then a few months later, the contract ends, chances are we would want the confidentiality obligations to continue (in fact, most companies agree that confidential information should remain confidential for anywhere from 3-7 years post-termination).

Off hand, I can think of three other sections of an agreement that should continue to beat long after the contract’s heart has been stopped.  IP indemnification, Limitation of Liability, and some Remedies.  These three make sense, as it’s possible to have issues arise which would require the applicability of these sections.

But what about contract language which reads “and any other provision which, in accordance with its terms is intended to survive the agreement”?  Sure, it’s good cop-out language when you’re not sure of all of the twists and turns a relationship can have.  However, language such as this can create problems if the rest of your contract isn’t carefully worded.

For example, look at your license grant language.  Now look at your termination language.  I’m not sure of your specific language, but if the license grant is perpetual and the termination language merely terminates the agreement, but not the perpetual license grant… and you have survival language as listed earlier, I think you might have a situation where one party can believe they’re terminating the license and the other believe they’re terminating the agreement (but continue to have a license to the product).

Sure, you can clean this up by changing the survival clause OR the termination clause.  Obviously, it’s going to depend upon your situation. I just don’t want to see you in a situation where you’re holed up in a small room, shotgun pen in hand with a barricaded door, praying that your zombie contracts would just go away. 

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

I don’t know why I didn’t think to ask all of you, too.  So here I am, humbled by my oversight.  Please forgive me… and if you’re interested, send a cover mockup to me.  Hurry, though, as I’m planning to make my choice next week.

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

Brian: thank you for taking the time to read the whole book and write the review!

What Jeff has done is dismantle a standard software contract. He has dissected its component parts into easy to understand sections that explain what a vendor wants, what a customer should ask for and what each party should be willing to agree to if they want to reach a fair decision.

I would call this book: King Solomon’s Guide to Splitting the Software Contract Baby. Vendors are surely going to hate this publication and that should mean it is must-read material for software buyers. I’d strongly recommend that selection team members, not just the in-house counsel, read this as it lays the groundwork for negotiations.

It might not be worth a million dollars as Brian’s tagline suggests, but I’m sure you’ll get your money’s worth. 

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

I’m not as convinced.

A few years ago, I was working for an organization that wanted to join a buying consortium.  The proposed result would be a buying entity that would supposedly garner savings as a result of larger purchases - thus passing along the cheaper per-unit costs to the consortium’s members… sorta’ like a Sam’s Club, Costco or BJ’s Warehouse - just at the large company level.  On its face, this sounds like a great idea.  Pay a small membership fee (someone has to get paid to manage the relationships), get large savings in a number of commodity purchases (paper products, general office supplies, etc).

Oh wait.  Did I say commodities?  Yes, yes I did.  Commodities are an excellent use for consortia buying.  They’re ubiquitous (everyone needs toilet paper and almost everyone’s buying the cheapest they can find), relatively easy to source (and hard to screw up), and bulk quantities clearly reduce overall expense.

But what if your consortia wants to offer something else… say, intellectual property?  Software, for example.  Now I think there’s a problem.  The member companies no longer have identical interests.  Your organization wants Exchange email… mine wants Groupwise.  You want an enterprise license … and I do, too, but my enterprise is 3x bigger than yours.  Consortia buying stumbles in the face of diversity of interests.

Another area where I personally had a lot of issues was the realm of cell phone and long-distance telephone plans.  The consortium wanted a cut of the plan revenue.  I didn’t want them to get money from me this way, as I would prefer to have more cost savings straight from the vendor.  Oh, and the consortium was buying a bulk group of “minutes” that were then allocated to the members.  If I didn’t meet my minimum usage requirements, I had to pony up (which is normal).  But the twist was that if any other member organization didn’t meet their minimum, I was also responsible for helping cover the shortfall.

So, how did I find out about all of these nits in the deal?  Well, me being me, I asked to negotiate the contract(s).  And what I got in return was a lot of static about how the contracts were already complete and that I simply needed to see/sign the Member Enrollment agreement to add us to the consortium.  I said no thanks - that I had specific needs and I wanted to have my own contract (where we could/would selectively incorporate terms from the consortium’s agreement).  Boy did that go over like a lead balloon.

What I learned by reading the consortium’s agreement (which they originally didn’t even want to give me) is that I’m ultimately paying for someone to negotiate a deal that’s good for them, not me.  When I wanted to change the terms with the vendors, they, of course, balked, too (they thought they had done-deals with the consortium and its members).

So the net result is that I’m not a huge fan of consortia buying.  Consortia are essentially negotiation and contracting outsourcers.  I don’t need help getting discounts or better deals… and I definitely don’t need “help” that only really benefits the consortium organization (and not the consortium members).  But I do see value in using a consortium to get the bulk-quantity ubiquitous products of everyday office living.  I suppose, as all else in life, the key is moderation and to read before you sign.

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

Thanks to the folks over at ContractsProf Blog (one of whom teaches at my alma mater) for finding this (and thanks to Flight of the Conchords for writing/recording it)!

[The underlying humor on this is the concept of consideration - that there has to be a mutuality to the arrangement.  It's the reason you'll see "for good and valuable consideration" or "for one dollar and other valuable consideration" on some contracts.  Each side has to "give" something to the other.]

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

American Airlines, Delta Airlines, Northwest Airlines, Southwest Airlines, United Airlines, US Airlines

In my local newspaper, they had a story today about how airlines are becoming more stingy at passing out hotel vouchers in the event of an unexpected overnight stay.  The article basically indicates that the airlines are blaming the reduction in “service” on cost-cutting measures.  Now, let’s forget for a moment that US-based airlines are exactly where they asked to be (deregulated) and for the most part, are struggling hard to survive.  They have a stranglehold on air travel within the US (and many have a significant overseas presence as well).  And in their time of crisis, while many more consumers decrease their flights and fuel prices skyrocket, the majority of airlines choose to reduce or eliminate service.  Which is interesting, seeing that they’re a service-industry.

But while I could debate the service issue forever, I find myself focused on the contract… my one salvation in the event of a serious problem with my trip.  I’m not a million-miler, but I do fly several times a year.  The increase in fuel costs actually pushes me towards flying, as I can get wherever I’m going more cheaply.  But with the decrease in service, fewer airlines offer routes to where I go.  As a Disney fan, my #1 destination of choice is Orlando.

That means that I really have two ways to get there expediently.  Delta and Southwest.  If I choose Delta, I know that my return trip is ALWAYS going to be delayed (in the dozen or so times that I’ve done the trip, it’s always happened).  But on only one of those trips was there an overnight-level delay… and of course, Delta blamed it on weather so as to avoid liability.  So while I’ve gone through dozens of delays (hundreds, if you look across the entire span of my life)…  I can think of only two times where I’ve been compensated - and it wasn’t by Delta.

If this was any other industry… any other situation… I would’ve expected at least something in exchange for my inconvenience.  Because I hold the ticket/contract relationship sacred.  I pay, they fly.  And as I’ve said in other places, I don’t think that the airlines would think it ok if I delayed payment (they would simply delay giving me the ticket).  So this mutual respect doesn’t seem to flow in both directions.

Southwest is eventually going to win this competition simply by delivering quality service … without cutbacks.  Oh, and don’t even get me started on the “oversold flight” issue.

The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent - namely, reading a contract from start to finish.

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