Hiring any technology service – such as software licensing and data storage and processing – presents challenges that may generate material loss for contracting companies.
Although it is not possible to prevent and anticipate absolutely all hypotheses of system failures, it is essential to formalize contracts with technology companies providing clauses that mitigate the impacts suffered by the contracting company, in case of any type of inconsistency in the contracted system.
The use of standard contracts in these cases is usually applied, but the adoption of certain clauses or provisions is essential, and therefore we highlight 4 points of attention:
1. Objectively specify the contracted services and, mainly, the Service Levels (SLA);
2. Establish the obligation of the provider to have data backup, security connectivity, perform tests before implementing updates and have robust security against cyber attacks, which must be constantly updated;
3. Detail in the contract the disaster recovery procedures and service continuity plans, in order to reduce the impact on the failure of service provision; and
4. Define penalties when there is breach of contract, especially non-compliance with the SLA, and compensation in the event of damages suffered resulting from failure, either in the provision of services, as well as in the disaster recovery plan and continuity of services.
In a digital and interconnected world, the ability to adequately manage possible damage caused by technological failures becomes an essential component for business continuity and the sustainability of business operations.
Effective contractual protection not only helps mitigate risks and minimize adverse impacts, but also promotes a relationship of trust and collaboration between the parties involved, with compensation for damages when necessary.
