Don't know about you,
but I've always been fascinated by
implications
and intentions.
As a kid I got a great kick from the tag line "facial quality" toilet tissue.
What did someone have in mind? I expose my face to windswept, sub-zero temperatures
while skiing; blistering, 110 degree temperatures while in the boating; and to daily abrasion of
the epidermal layer while shaving. Is "facial quality" suppose to mean "delicate" or "soft"?
Glory, there must be a better way to get it said... Certainly, "hemorrhoidal quality" leaves no doubt.
Having gotten to the bottom of matters, so to speak, I'd like to refocus attention on another
bottom: The Bottom Line.... getting a signature on a software contract; and the delicate art of drafting an unambiguous
agreement that helps to do so.
Genesis
Before computer unbundling in l969, there were no software contracts -- just hardware -- because
the software came free. Since then, however, software has ceased being the step-child of the
hardware industry. Today, its developed and marketed independently, and contracted for separately under
its own legal agreement. And, as more software is relied upon by businesses -- for
both the developers and users of it -- the terms and conditions under which it is licensed / sold becomes
more critical. Typically, there has been a tendency to delegate the development of
this document to lawyers. But, should-it-be-so?
Nature
Just what is the nature of a software contract.... merely a legal document,
or is it much more?
IT'S MUCH MORE. In fact, I contend that a software contract should be the
finest marketing piece any company has. For indeed, it is the Bottom Line, representing not only
the product, but the company. It may not be "glossy," but the contract should be the shining example
of the style and fashion by which the company choses to do business. THAT'S MARKETING'S
DOMAIN.
Consequently, the tendancy to solely delegate its development to lawyers should
be checked. The way I see it, when considering contracts, the legal function is like
that of a semi-permeable membrane that allows the inflow of cash to the corporate coffers, but prevent
its unanticipated (often catastrophic) outflow once it has been collected. This simplistic model isn't
to diminish its function.... just put it into perspective.
You see, there is a dichotomy.
Marketers, the workerbees with quota pressures, are dually focused:
Move product and generate revenue. They want to maximize the offer in knowledge of
the truism," the better the offer, the better chance for success." How can you fault them?
Lawyers, the watchdogs of the treasury, on the other hand, are focused on
conservation. They have a penchant for placing limitations in knowledge of the truism, "the less that
is offered, the less that is risked." How can you fault them?
Both serve a very vital function in the checks and balances in a firm's financial
survival.
You might be thinking that the no lose position in this dilemma is the treasurer's
office with one side gathering money and the other guarding its retention. But that's not the
case either. The treasury, and therefore the entire corporate goal achievment -- not just in revenue
but the various implementations which revenue buys -- can best be accomplished if the contract
is balanced to maximize the product/company offer against minimized risks. In short the
legal instrument should be powerful enough to attract revenue worded to prevent disasterous outfows.
E-V-E-R-Y-O-N-E should be concerned about contract content. But
oh my, how few are!
Reality
In reality, there are two aspects to software contracts: Legal and Marketing.
A little parallelism will help to illustrate.
I think that it is safe to say that when addressing the legal aspects, a major
concern has to be for the body of law which is still evolving regarding this new technology. Since
it's illegal to have a contract clause that is in contravention of the law, the real homework
is to know the law for every jurisdiction that your contract's terms and conditions will
be construed by. Copyrights, trademarks, & trade secrets; fitness of use; direct/indirect loss; confidentiality;
states of interpretation; assignment; valid/invalid disclaim-ers; indemnification; etc.
That's the Lawyer's job!
I also think that it is safe to say that when addressing the marketing aspects,
a major concern has to be for the body of law which hopefully will grow from acceptance of your
new technology. And again, since it's illogical to have a contract clause that is in contravention
of marketing precepts, the real homework is to know the tactics and strategies that will
distinguish your company and product from competition wherever it goes. Meaningful warranties; upgrade
provisions; maintenance and updates; education, support and users' group; billing procedures; escrows for
source; and most important of all.....grant of license. That's the Marketer's job!
Perchance, you think that I'm all wet on the grant of license. Not so!
The license is legal, allright; but the granting is pure marketing: How'd you like it?
By site; by CPU; by attached processor; by multiple processor; by clusters or networked; perpetual
or limited term; exclusive or non-exclusive; transferrable or non-transferrable; etc.
Intentions
I can't tell which law schools are responsible for which type of lawyers,
but I can tell you that from my experience in negotiating hundreds of contracts with corporate lawyers and
law firms representing corporations that there definitely are two schools of thought: The School of
Say-Little and the School of Say-A-Lot. Both manifest their legal cultures thoughout
a corporation... including marketing.
It seems that Say-Little believes in court interpretation, perhaps believing
that reasonable wo/men will avoid getting there, if the time ever comes. Kind-of-like, where no agreement
exists -- no agreement can be broken. Say-A-Lot likes specifics; defines words; and even includes remedies
within the contract as if to believe in the saying that horrible endings are better than
horrors without ending.
Say-Little chides Say-A-Lot stating that you can't define everything, besides
an omission can work against you if you have taken pains to define most. Say-A-Lot counters with
a the "ounce of prevention....etc." idea, stating that the heavy one-time investment in drafting make everything
smoother in difficult times.
Why all this? Simply because from a legal standpoint both sides have their
merits. But from a competitive marketing point of view, the reticence of Say-Little can be very
dangerous, while Say-A-Lot can provide one of the finest closing documents a company can have, if marketing
joins in .
So what is your intention? Let the prospect/customer know how you intend
to conduct business; and what the implcations of the terms and conditions are. Today, if they are
less than anything to write home about, you'd better reassess you position.
For Example
Here's a sweetheart paragraph that crossed my desk the other day:
"In the event the most current version fails to perform in accordance with
the most current Documentation (A Documentation Non-Conformity), The Company shall use it best
efforts to correct such Documentation Non-Conformity." Well friends, what's it goin'
to be? Change the product to reflect the documentation by which most buyers no doubt
based their decisions; or, change the documentation to match the product as if the product spontaneously
combusted on its own genius?
Based on the adjective before Non-Conformity, one could get the very sick
feeling that what one saw was not quite what one was about to get. This isn't filling
anyone wants or needs; this is a legal shell game. And it's true marketing Hemlock. If
your agreements waffle, it's time for review.
Summation
Finally, let's not get confused. I'm no lawyer and make no representation
that what you have read is anything but emperical marketing savvy. So check it out with counsel.
Rather than savvy, s/he may shout insanity. But then again, before you fold your marketing
tent, look to see how many Software Sales Awards are next to her/his degree.
I think that you get my implication!
