Software License Agreement Issues

Depending on the software licensing agreement, the degree of detail of the audit clauses may vary. In any event, the scope of the right to review must be properly assessed. This scope includes a number of factors, including: in general, the licensee should be required to address the issues without delay; but it is reasonable for reaction times to be adapted to the seriousness of the problem. Ideally, the licensee would therefore offer a “Service Level Agreement” that would require the licensee to respond to a downdraft/debility system problem as soon as possible (. B for example 1-2 hours) and it is beginning to fix it. to remedy a serious disability (for example). B 4 hours); and other reasonable and timely defects and defects (p.B. 8-hour response and 24-48 hour correction). If the correction cannot be made within this time frame, the licensee should provide a “work around”, i.e. a temporary solution allowing the licensee to continue using the software for the most part as originally envisaged. The licensee should also be forced to continue its efforts to resolve the issue later (although it is only right that the licensee corrects some really minor problems with its next software version or software cycle).

The licensee should have the right to disclose or make available to the software not only its employees and agents, but also the independent contractors it retains, as well as consultants and possibly directors, investors and acquirers (confidential). Sometimes the licensee`s accountants and, in the case of banks, auditors and supervisors, must be disclosed. Ideally, the licensee`s duty of confidentiality would be limited to informing these individuals that the disclosure is confidential or, at most, requiring these individuals to respect confidentiality (without necessarily having to obtain all signed agreements). If possible, avoid being explicitly responsible for third-party privacy violations (especially regulators and professionals) that allow you to disclose information. So email it to your lawyer and ask him to check it out before the end of the day and get it back to you with feedback, because software vendor sellers are urging you to get the transaction completed, because the end of the commission cycle is tomorrow. On December 1, 2020, the law of 4 April 2019, which includes provisions relating to abusive clauses in B2B contracts, will come into force. These new rules apply to new agreements reached on December 1, 2020 or to existing agreements that will be amended or renewed on December 1, 2020 or after December 1, 2020. The contractual framework for software licensing is not always simple.

In some jurisdictions, the sale, license or other transfer of a software right to a third-party-hosted server (for example. B SaaS) is generally taxable; whereas other states consider saaS through the lens of a genuine offer of services that may not be taxable. In addition, many states tax sales of products, including licences, outside tax services; in such cases, the collapse of the service component of the levy may prevent the local tax taker from being taxed on turnover. When sales and usage taxes are payable, they are generally the responsibility of the licensee; However, given the complexity of the patchwork of government sales and usage rights laws, licensees and licensees are encouraged to consider the innumerable tax implications that can arise when reviewing a proposed software license or subscription contract. It goes without saying that the review must be conducted in accordance with the scope and procedure of the right of review granted to the licensee under the relevant agreement.

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