Technology Contracts: Ensure that You Read the Statement of Work (SOW)

The Statement of Work (SOW) is a document that clearly outlines the specific deliverables and services the vendor will provide, along with the associated project phases, timelines, milestones, pricing, responsibilities of all parties, key assumptions and dependencies, staffing details, client compensation, and any other important business terms. Regrettably, SOWs often become an area where some vendors attempt to reject essential legal and business terms found in the main body of the services agreement by introducing completely new and contradictory provisions. This can involve denying legal representations and warranties, altering payment and termination clauses (sometimes including significant termination fees), implementing deemed acceptance provisions, and attempting to modify service levels.

Additionally, some SOWs may be poorly written, featuring numerous capitalized and undefined terms, insufficiently defined vendor obligations, or offering vague promises to clarify essential technological or other requirements post-signing—referred to by lawyers as “agreements to agree.” Often, these SOWs do not define actual timelines or deadlines. While many lawyers might be reluctant to draft SOWs, it is a considerable mistake not to have a technology lawyer on the client's side review the draft SOW at least once before signing. This review can help eliminate both intentional and unintentional language that could contradict or weaken the primary legal document.