Penetration Testing mailing list archives
Contract drafting for an engagement
From: "Craig Wright" <cwright () bdosyd com au>
Date: Wed, 17 May 2006 16:03:50 +1000
Hello, There has been a bit floating about in regards to contracts for testing and liability. First before you even start - ensure that your Professional Indemnity [PI] insurance is current. Point 1, get a good draftsman! This is a specialist lawyer who creates contracts for a living. In law there are specialisations. A good draft will save heaps of time in court and save money in the long run - esp. if anything goes wrong. If you must at least help in drafting a contract (or formulating a template) here is some rather general advice. Take it as you will and this will not replace several years in law school so again pay someone. Get it in the form of a DEED! 1. Use plain language contracts. 2. Define ownership rights (both legal and equitable) in the process and reports. 3. Include an Intellectual Property [hereafter IP] assignment clause. 4. Define a technology license for the IP. 5. Set the locality and process for disputes. Have a mediator or arbitrator as a first line of negotiation 6. Setup pre-contract terms. See below (1) 7. Avoid any lack of clarity - spell things out in detail and agree to all changes in writing. 8. Identify all contract terms (write them down - even the oral ones); a. Express written terms b. Express oral terms c. Implied terms. 9. Make all terms clear - clear terms have one and ONLY one interpretation 10. A clear term is clear in context 11. Express terms, conditions and warranties clearly. Define them expressly! 12. Include an ability to change the agreement if necessary (even costs) 13. detail site preparation, installation and testing 14. define expectations, documents reports etc 15. PAYMENT. How, when and under what recourse can this be withheld 16. personnel, records reporting and audit provisions 17. confidentiality 18. ownership and risk 19. systems warranties (from both sides) 20. IP rights warranty, indemnity and infringement 21. Escrow of reports/data/findings in some cases 22. delays and liquidated damages 23. indemnity and insurance 24. exclusion and limitation of liability 25. force majeure 26. dispute resolution (inc. alternative dispute resolution) 27. suspension of services 28. Term of the contract 29. termination 30. what happens after termination 31. subcontracting 32. notice 33. assignment 34. severance 35. waiver 36. further action 37. choice of jurisdiction and law 38. entire agreement clause Define thew minimum service levels in the contract. If you look as if you are trying to supply a valid service, the court is less likely to be hostile to your claim. Use the contract as a risk management tool. Clearly express risk sharing and distribution. Discuss the risks openly with the client. Do not make false or misleading statements or terms in the contract. This will make it more likely that the court will rule against you. To contradict popular belief, there is NO such thing as an international license, worldwide license or another such thing. Looks complex, it is. Again... pay for a good legal draftsman! If you are not a lawyer, do not try to be one. Regards, Craig Example pre-contract clause, 1 Pre-contract Conduct Each party acknowledges that: (a) if negotiations do not result in a contract signed by each of them, it is not entitles to any compensation from any other party for any reason connected with the negotiations or their termination (except compensation for any claim, if any, that by law may not be excluded); and (b) if it wishes to be paid for any services or damages supplied to or against another party before a contract is signed by each party, it must obtain that other parties written consent to that supply and payment. 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