1. Negotiations: Gotchas That Can Getcha
Mark Kaufmann

2. Objectives Objectives Reality check
Share and discuss common gotchas that can getcha and ways to address
Identify strategies for common vendor gotchas
Reality check
Negotiations sometimes are a function of timing and bargaining position
Sometimes you will not prevail despite having the logical and customary view

3. Disclaimer

4. Gotchas That Can Getcha Roadmap
Negotiating tactics
Purchase and performance
Pricing matters
“Legal” T’s and C’s
Confidentiality and Security / Data Protection

5. Negotiating Tactics Divide and conquer
Speaking to business team and leaving procurement and legal out of the mix – the freeze out
Not providing necessary diligence / information
Not making decision makers available – no authority

6. Negotiating Tactics (Cont.)
Sharing only PDFs of contracts
Providing inaccurate redlines
Inflexibility
Pricing model
Termination rights
Renewal rights

7. Purchase and Performance
Lack of specificity / detail
What is being bought / licensed / procured?
Who can use what is being bought / licensed / procured?
Will you pay twice? Three times?
Lack of general responsibility – what is being paid for?
Activity vs. deliverables vs. results

8. Purchase and Performance (Cont.)
Application of service levels and meaningful remedies
Ownership of developments / modifications
Use of subcontractors
Off-shoring

9. Pricing Matters Built in escalators for non-personnel items
“then current”
Ups and extras – not included
No specificity of fees (or structure of fees) at renewal
Inability to audit fees
Benchmarking

10. “Legal” T’s and C’s Inability to amend terms and conditions
Vendor paper vs. customer paper
Take it or leave it approach
Identity of vendor contracting party
Hollow LoL lacking meaningful carve outs
Unbalanced LoL
Disclaimer of damages lacking meaningful carve outs

11. “Legal T’s and C’s (Cont.”)
Limited or no indemnification obligations on vendor
Overly broad indemnification obligations on customer
Lack of meaningful termination rights and consequences
Lack of meaningful renewal rights
Assignability
Virus Responsibility

12. Confidentiality and Security / Data Protection
Responsibility / liability
Strict liability vs. compliance with procedures
Security breach notification and responsibility
SSAE 16 audit obligations
Consequences of “failure”
Audit rights – regulatory and customer

13. Evaluation and Materials
Questions?
Evaluation and Materials
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