International IT Contracts

The parties must first strive to reach a common understanding. The reason for this is that often not only the communication but contract negotiations, in particular, are held in different languages. As a result, there is a high probability that misunderstandings will occur, which can significantly impair the success of the project. To ensure the success of the project, parties should consider the following points when drafting international IT contracts:

• They should precisely define their essential interests and the purpose of the IT contract in an introduction (often called a preamble). This preamble can then be used as a basis for interpretation in the event of uncertainty.
• If the parties plan to draft the contract in several languages, an interpretation clause should also be agreed upon. This settles which linguistic version of the contract shall apply in cases of doubt.
• Moreover, concrete definitions of terms are also helpful. With these, the parties shall officially determine what is to be understood by certain terms and thus ensure that they are always ascribed the same meaning throughout the contract.

The more complex the IT project, the more often the parties must coordinate with each other. However, different time zones, unclarified responsibilities and delayed internal agreement processes can unnecessarily defer and, in the worst case, even prevent the necessary arrangements between the parties involved. In order to counteract this problem, the parties should raise the following points at the beginning of the IT contract process. They should

• specify the exact responsibilities within the project,
• appoint permanent contact persons and representatives,
• clarify the means of communication (e.g. by e-mail),
• determine which time zone shall apply for the agreed availability of the contact persons and
• which legal system shall apply.

The last point in particular often leads to questions of applicable law in the case of the transnational granting of rights. These must be answered partly by contractual provisions and partly by recourse to the principles of private international law.

Finally, parties cannot rely on the fact that the same legal provisions, legal principles and customs of legal transactions will apply in the country of their contracting partner or that a similar judicial decision-making practice will prevail. For example, it is common in U.S. law to regulate far-reaching exclusions of liability in contracts, whereas, under German law, liability for certain damages cannot be excluded at all by contract. For this reason, project participants are advised to formulate the contractual provisions governing the IT project as precisely as possible.