Mitigating Third-Party Risk in Technology Contracts: Assignments, Audits, Termination, Indemnification, Compliance
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Commercial Law
- event Date
Tuesday, April 5, 2022
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will guide counsel in which contract clauses in vendor agreements to consider in order to mitigate third-party risks. The panel will discuss the provisions regarding parties' rights and responsibilities, performance standards, contract value, and other key issues related to risk management.
Mr. Gomez has extensive experience performing and managing contract compliance audits in various industries. He has conducted engagements throughout the world including Japan, China, Taiwan, Hong Kong, Australia, South America, Mexico, and Canada. His engagements have included intellectual property audits, royalty audits, profit participation/distribution audits (film, music, & book), merchandising revenue audits, software asset management audits, software end-user license review, vendor audits, franchise compliance audits, construction audits, and joint venture audits. Mr. Gomez’ knowledge of the licensing and franchising industry standards has aided clients in recovery of lost revenue, royalties, and fees. His engagements have led to a significant return on investment and recovery of audit costs for his clients. Additionally, Mr. Gomez’ experience includes SOX 404 compliance, process risk assessments, controls evaluation, internal control reviews and implementation, and fraud investigations.
Mr. Ryan focuses his practice on a variety of complex transactional matters in the technology and business process services marketspaces. He offers extensive experience in advising clients on technology and business process services transactions, including the development and deployment of software and infrastructure using a variety of delivery models, such as Cloud Software-as-a-Service and Infrastructure-as-a-Service. Mr. Ryan also advises on intellectual property licensing transactions, resale and distribution agreements, and mergers, acquisitions, joint ventures/strategic alliances and equity investments.
Ms. Farmer’s practice focuses on board governance, mergers and acquisitions, SEC compliance, contract management, complex corporate transactions, risk management and international law. She is a legal strategist with experience leading complex initiatives and navigating challenging legal matters and collaborates with multiple business units and stakeholders to develop solutions to address core challenges. Ms. Farmer has a deep understanding of operations and communicates with all levels of an organization, and actively participates in board governance which enables companies to pivot based on business needs.
In the contracting process, after completing due diligence of a potential vendor, the agreement should be structured in accordance with the scope and nature of that third-party relationship. Even though some specific transaction-based terms and the comprehensiveness of a contract will be designed to reflect the unique dynamics of each relationship, there are some essential clauses that should be included in every vendor agreement to minimize risks.
Compliance with applicable laws and regulations are the backbone of third-party relationships and should be a cornerstone of the vendor agreement. A compliance clause is where counsel can illustrate a company's commitment to its business ethics and compliance program, how the client considers compliance in every new business operation, and the expectations for a third party's compliance.
Counsel will need to include appropriate confidentiality provisions and consider requirements related to privacy and data security based upon the nature of the data and applicable industry involved.
A vendor agreement should include provisions related to the performance of the applicable service or product. A clause regarding a third party's responsibility to file periodic and on-demand reports is also required, including how often and to what extent these reports are prepared. Periodic reports should represent a third party's performance levels, and its compliance with undertaken service standards, as well as its financial statements, and any pending claims. Likewise, termination clauses are essential to provide a client with a mechanism to address changes in risk over time, or the risk-reward balance becomes reversed, and a relationship is no longer in the client's best interests. Not only should termination clauses state the circumstances that give the right to terminate, but also how termination is effective and specifics on termination assistance. The contract should also address the third party's ability to assign its responsibilities to an entity that has not been vetted or assessed.
Indemnification clauses provide the right to hold a third party responsible for the damages, losses, and claims that arise from its failure to fulfill its contractual obligations or resulting from other conduct of the third party. In addition, appropriate audit provisions are necessary to allow a company to confirm a third party is meeting its commitments.
Listen as our expert panel discusses how third-party risk management via contract drafting and negotiations can provide clients with the necessary information about business partners to help identify and mitigate risks. The panel will address the most effective and beneficial ways of implementing a risk management plan.
- Vendor agreements
- Third-party risks
- Compliance with laws
- Confidentiality, privacy, and data security
- Performance and reporting
- Audits
- Termination
- Indemnification
- Assignment and change in control
- Third-party risks
- Best practices
The panel will address these and other key issues:
- What is the best practice to assess and manage risk via the contract when dealing with a third party?
- What should the indemnification clause include in anticipation of third-party liabilities?
- How will compliance be addressed in the vendor contract and what is the expectation of a vendor?
- What other considerations should counsel address in a vendor agreement to mitigate risks?
