How can you prepare for the reversibility phase at the end of the contract right from the start of the relationship?

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The reversibility phase is a major factor in IT contracts since it involves considerable issues for client data and generates sources of pressure and numerous disputes between clients and service providers. How can you prepare for this phase so that you are free to part company with your service provider?

All too often, IT contracts fail to address the issue of reversibility, i.e. organizing the return of data at the end of the contract. However, the very purpose of a contract is to provide a sufficient framework for relations between the partiesso that disagreements can be avoided as much as possible. This is particularly useful when the relationship becomes strained, for example when the client wishes to terminate the contract with its service provider, either because it is dissatisfied with the service or because it has simply found something better elsewhere. The service provider will then no longer want to make any commercial effort, and will instead want to take what it can before the relationship comes to an end. The client then finds itself captive to its service provider since it is imperative that it recovers its data (which more often than not is of considerable business value).

To avoid this type of situation, and even if we don’t know exactly at the start of the contract what will be expected of the reversibility phase when the time comes (reversibility may be partial, the volume of data is relatively unknown, the organization of the information system may have changed in the meantime, etc.), it is imperative to include a precise reversibility clause in IT contracts.

Ideally, this clause should specify the main conditions of reversibility such as the financial terms (costs of reversibility, most often based on an ADR (average daily rate), with at best a quantified estimate based on a given volume, for example; the extent and nature of the data (e.g., data entered initially and over time, or also data produced by the service); the format and medium of the data to be returned, and the conditions for portability and transmission to a third party, such as a new service provider.

If the client is to be free to leave whenever it wishes, and under conditions that suit it, it is essential to plan for this reversibility clause, and not to be persuaded that it is not possible to plan for it in advance since we don’t know what the situation will be like when the time comes. The broad outlines can be foreseen and planned for!

Don’t hesitate to contact the experts at MIIP – MADE IN IP on these questions!

Charlotte URMAN/ Trademark Attorney