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For Sourcing & Vendor Management Professionals

Check Your Software License Agreement For These Common Flaws

Technology-Savvy Buyers Can Spot Contract Gaps That Lawyers Will Miss

December 5, 2008

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  • By Duncan Jones
  • with Christine Ferrusi Ross,
  • Antonin Shanahan

Why Read This Report

When working with individual clients, Forrester sees many software license agreements that are not fit for the intended purpose. Some common problems: the contracts fail to explain clearly what the buyer has to measure to stay compliant, place unreasonable restrictions on usage and/or deployment, and rely on terminology that will soon be obsolete, if it isn't already. These flaws result in audit problems, unexpected software costs, and sometimes legal disputes. From this experience, we have identified the most frequent causes of later trouble. Why so many problems? Legal terms that software vendors have used for decades have failed to evolve with technology. But software sourcing professionals can reduce the chance of later contractual arguments if they address these issues while they have the chance — in the first negotiation.

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