Maintenance agreements

Maintenance obligations

Maintenance obligations must be clearly defined in the maintenance agreement, both in terms of their scope and the period of time in which they must be performed.

Issues which may impact upon the scope of services to be provided (and how much these will cost) are likely to include:

1. which types of defect or causes of defect (if any) are to be excluded from the maintenance obligation;
2. the categorisation of faults for which maintenance is to be provided. Factors which are likely to influence this process are the nature of the user's business and their ability to pay the costs which will be incurred by the categories of fault selected;
3. from a drafting prospective, it is important that both parties understand the precise meaning of descriptions such as "level 1, level 2" or "priority 1, priority 2", so the maintenance agreement should clearly articulate what level of service is required of the maintenance provider in relation to each specified category of fault (both in terms of commitment to resolution and response time). It is also important to identify which party will be responsible for categorisation, and how any disputes in relation to the proper categorisation of faults will be dealt with;
4. the flexibility of the proposed fault categorisation. In order to make sure that any changing needs of the user can be appropriately dealt with, the maintenance agreement should allow the categorisation to be changed and/or the matter escalated if the user considers any responses too slow or insufficient for the fault concerned;
5. response times (or "targets") should be agreed and incorporated in the maintenance agreement as a measure for both parties of whether the supplier's maintenance obligations are being properly discharged;
6. the length of cover which will be provided. The hours of cover should be appropriate to the requirements of the parties, and should be clearly set out. In addition, any requirement for out of hours or exceptional cover should be detailed, together with the arrangements required for invoking it.

Upgrades / technology refresh

There are a number of issues connected with the effect of changing technology upon the maintenance to be provided by the supplier, which include the following:

1. are new releases, versions, or upgrades to be included in the agreed fee? If the user will be entitled to a limited number of releases, versions, and/or upgrades, it is important to set this out clearly in the maintenance agreement;
2. does the supplier intend to reserve the right to withdraw support and maintenance from old versions of the software (it is not uncommon to restrict the obligation to provide support to the current version of the software plus one earlier version);
3. is continued maintenance dependent on the purchase by the user of any upgrades. If so, this should be stated clearly in the maintenance agreement;
4. how regularly are upgrades to be provided, and who will deal with any interoperability issues with existing software/hardware?;
5. finally, are certain categories of fault to be fixed by reference to periodic upgrades rather than fixes?

Renewal and termination

As highlighted above, it is important for both parties that there is no ambiguity in relation to the extent of the obligations to maintain, the timescale in which those obligations must be completed, and the fees to be paid in respect of the maintenance provided.

The length of the relationship between the parties should also be considered, in particular, issues relating to termination and renewal of the maintenance agreement should be discussed at the outset. For example:

1. does the maintenance agreement have a specified lifespan and then renew automatically? If there is automatic renewal, the maintenance agreement should specify how any change in price should be dealt with (a supplier will want to carve out the ability to increase price in order that the maintenance arrangement does not become unprofitable, while a user will seek to have this price increase restricted (for example by reference to RPI ));
2. if the software is modified by the user can the supplier cease maintenance? If not, will there be an impact on the fee to be charged?;
3. if the maintenance agreement is terminated, will it be practical for the user to obtain maintenance elsewhere (care should be taken in this area when drafting maintenance agreements as it is possible, for example, that any linking of the termination of the maintenance agreement to termination of the software licence may breach competition law).