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Risk Management

 
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Asset/ Technology Takeover in Information Technology contracts

What are the major risks involved in signing an asset/ technology takeover clause by IT service provider. How can this be mitigated in the contractual clauses?

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Information Technology Outsourcing: Asset Transfer and the Role of Contract

Information Technology Outsourcing (ITO) has become the predominant mode of acquiring information ystemsservices, providing clear evidence that the economics of service delivery favor external service providers over in-house information systems departments. An interesting feature of many large ITO arrangements is that assets necessary for service delivery are transferred to the vendor. The argument in favor of such asset transfers, based in Property Rights Theory, is that they are necessary to incentivize vendors to continue to invest in the transaction-specific assets to improve service. On the other hand, Transaction Cost Economics predicts that transferring such assets increases bilateral dependence and will elevate the risk of post-contractualopportunistic behavior. The contracting challenge is to specify the termsof exchange to achieve the client's objectives for outsourcing while managing the transaction risks.

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A Guide to Public Wifi Security Risks & How to Use it Safely

Our connection to the internet has had a huge impact on how we operate as a global society. It's drawn the world closer together, and made it easier than ever to research, absorb and relay information at the click of a button.

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Risk mitigation guide

We are creating a risk template and user guide. We envisage this taking the form of a flow chart guiding owners through, risk identification, which parties need to be notified, which business areas a risk effects and what the escalation process involves. Does your business have a template or example of a risk user guide we could look at?

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Limitation of Liability

I was recently having coffee with four other individuals involved in contracting for IT Professional Services. During the course of conversation one of the participants suggested that rather than having unlimited direct liability for certain aspects (breach of confidentiality, indemnification of third-party claims, gross negligence and willful misconduct) that EVERYTHING be limited to the extent permitted by law -- but then increase the limitation to a number that would cover the majority of potential issues ($5,000,000 USD was a suggestion). When questioned, the participant stated that when it comes to contracting parties where one has "deep pockets" and the other does not, having the unlimited liability may sound nice on paper, but in reality it is a one-way protection that benefits the party that does not have deep pockets. Effectively, if the party that does not have deep pocket had a very large claim against them, they could declare bankruptcy and later reorganize as a different business concern - while the deep pocket party with the same claim would be obligated to pay. Their perspective was in essence: No consequential damages; limit all direct damages to a pre-defined/agreed amount ($5,000,000 or amount that will cover 90%-95% of historic claims in the industry); and include indemnification from third-party claims in the cap. Thoughts?

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Translated Contracts

Hello IACCM Forum, Does anyone have any information regarding the risks of poorly translated contracts? If so, please provide as much information as you can. Thank you. Kind regards, Isis

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