The Contract Agreement In Today's Globalized It Environment

Perhaps in no sector of business is globalization having a greater impact than in information technology, or IT. The extent to which this sector crosses borders is considerable, as is the complexity involved in associated legal issues.

When it comes to information technology, and those doing business in the field, it can be difficult to know what laws apply to which aspects of a service or product. There are software licensing agreements to consider. There are manufacturing locations to take into account. To add to the confusion, there are questions pertaining to when certain jurisdictional concerns overlap one another when considering the extent to which products and services interact.

If you have software licensed in the US, for example, but hardware made in Britain, which jurisdiction applies to an issue at hand? Add to that the fact that the service provided could come from India, it's not surprising that IT professionals can be confused about just where their contract agreement has jurisdiction, or even what can be considered legal software in any particular country.

These kinds of questions and issues are why jurisdiction with respect to the contract agreement has become a challenge being confronted by more and more people in the IT industry around the globe. If both the international private and public sectors don't meet these challenges soon enough, the legal quagmire in which we could all find ourselves could be considerable. It's why waiting is not an option, and why the IT sector is engaging in ways to meet the challenges involved regarding issues like what is or isn't legal software.

If things go well, what constitutes legal software will be a much less complex issue to sort out. This means less worrying, less red tape, and a more streamlined process to deal with contractual issues in the IT sector. This is an outcome many people are working hard to achieve soon enough.

One of the factors involved in the complexity is just how diverse countries and regions are around the world. This particularly holds true regarding information technology, as countries as far apart and diverse as the United States and India have become major players, not to mention just about every other corner of the earth. Above and beyond the complexities involved in international IT law itself, what makes the issue of contract agreement and legal software even more complex is that different cultures and peoples have different ways of approaching the law in general. These are hurdles that all IT professionals encounter as they tackle the field of jurisdictional law.

Perhaps the greatest focus being placed when it comes to resolving issues of international jurisdiction is determining the best resolution mechanism to be instituted.

As it stands now, figuring out jurisdiction for a contract agreement can be more difficult than figuring out how to create, install, and fix software itself. If a dispute does arise regarding things like legal software, often the first jurisdiction to kick in is local. Where it goes from there can be anyone's guess.

What is developing now is a move towards some international arbitration system where, instead of the current maze of making one's way up the food chain of jurisdictional procedures, all the parties involved can have access to an established system of settling disputes. Such a mechanism would not only make the entire process that much easier, but the environment created could be more conducive to creativity and problem solving which, in the end, is what that IT sector is supposed to be about, isn't it?

In most business situations, one of the purposes of a contract agreement is to in fact make the process a simpler one where everyone understands their duties and obligations as part of the contract. Not only does this make things like financial obligations easier to sort out, it allows service and products to be rendered in an atmosphere of mutual trust, and it lets everyone know what cards are on the table. There is no reason why this can't hold true in the IT sector. A world where the IT contract agreement is made simple might lead to a world where we no longer ask if something is legal software or not. It's probably something we can all hope for.

Is there something that IT professionals can do to make the situation easier for themselves? Part of the problem is the international situation regarding the contract agreement. With this component of the problem, one has to be resolved with the fact that people are working on it. There is just too much money at stake to let the situation fester. Without international regimes in place to deal with these issues, dollars will be lost, egos will be shattered, and service will be diminished. Absolutely nobody wants to see that happen.

Alternatively, as with so many issues when involved in business, and in particular the IT business, talking to people and knowing as much as you can about the issues involved can only help. It's hard to imagine that IT professionals at some point or another have not encountered jurisdictional issues, especially as it relates to things like what is and what isn't legal software. Networking and doing some homework can go a long way in ensuring that the contract agreement issues you deal with will work out in your favor at least until some broader international issues are resolved, of course.

By: James Cochran

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James Cochran is the founder of ContractEdge, a provider of legal forms and contract agreements designed specifically for IT professionals and contractors. Created by attorneys who specialize in Information Technology law, ContractEdge s legal software helps you build agreements and contracts that go beyond the standard provisions and include critical special provisions unique to the IT industry.