Why you should be careful when downloading a template online.
The huge risk in using standard contracts available online is the unknown. Who created the contract and how long ago? What law applies to the contract? What industry is the contract made for? Does it protect your business? Although contracts may appear to be similar and cover broadly the same terms, there are many terms that need to be personalised to the parties, their industry and the context of their engagement. Tailoring online contract templates on your own can be risky for non-lawyers and the unlawyered.
Legislate has taken the time to understand each contract, the flexibility of each term and the options available to allow you, as a user, to personalise every contract you create. Legislate allows you to create all the business and tenancy agreements you need ranging from assured shorthold tenancy agreements to employment contracts. Sign up to try Legislate today.
But why is it important?
Let's say you download a template Software as a Service agreement, it’s low cost or maybe even free! You’ve agreed to allow the Customer to use your Software for their business purposes. Subsequently you find the Customer is allowing others to access the Software with their log-in details. Turns out your standard contract failed to provide how many users are permitted access and whether there are any restrictions!
Another area of great concern is Data Privacy, a Customer (controller) may be using the Software to upload customer data that includes personal data relating to their employees or customers (Personal Data). The Supplier (processor) will be processing Personal Data on behalf of the Customer, the agreement found online may fail to address Data Protection Legislation requirements, the legislation provides details on mandatory provisions that must be included in the contract:
- Personal data may only be processed according to the controllers instructions;
- Duty of confidence clause (processor must obtain confidentiality obligations from anyone it allows to process the personal data);
- Contract must oblige processor to have adequate security measures in place;
- Clauses highlighting the requirements where a sub-processor is appointed; and
- The rights of Data Subjects;
This list is not exhaustive, Data Privacy Legislation imposes strict requirements on protecting Personal Data and those in breach may be subject to fines. If you would like more information about the direct statutory requirements imposed on parties handling Personal Data, the ICO guidance note can be found here. Legislate ensures both parties comply with Data Protection Laws, by including clauses necessary to protect the Personal Data and highlighting their obligations in relation to the Personal Data.
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What’s different with Legislate?
Legislate asks all the right questions to include all the right terms. Users are able to input the key considerations to be included in the contract, the contract is then personalised to the agreement between the parties. If the contract above had been created on Legislate, the Software provider would be rest assured that the number of Authorised Users are specified in the agreement and the Customer would be in breach of the agreement if this number is exceeded. Or in the case of Data Privacy, the parties would be confident they are meeting the obligations imposed by Data Protection Legislation.
The jurisdiction clause determines what law the agreement is governed by. Laws vary depending on where you are located, such as England and Wales, New York or Western Australia. It is important to ensure the jurisdiction agreed under the agreement is a law you are familiar with and understand. Having a jurisdiction such as New York may give rise to different privacy obligations and if you are incomplient may lead to potential breaches and/or fines.
Standard contracts often favour one party over another. The terms may be less favourable and provide less protection for a party under the agreement. Legislate ensures the interests of both parties are considered, no party has the ability to select unfavourable terms.
So what now?
Legislate provides users with peace of mind to focus on their commercial endeavours, by enabling users to create a reliable contract. You can watch a demo of Legislate. Legislate ensures all the key elements of the agreement are considered, by prompting you to answer specific questions in relation to the agreement and the relationship between the parties. Legislate is able to anticipate the key areas of your agreement that are of importance, incorporating the clauses necessary to protect your interests and ensuring you have a strong agreement allowing you to go ahead and disclose your confidential information. To legislate your own SaaS contract, join the waiting list, read one of our tutorials, book a demo or receive an invitation from an existing member.
The opinions on this page are for general information purposes only, and are not legal advice on which you should rely. Please consult with a lawyer if you want legal advice.