The trouble with contracts

A huge hot button for me is organizations that contract out of the U.S. – they have a whole different legal view, a whole different legal system. When it comes to these types of contracts, the main focus becomes protecting themselves to the hilt, instead of trying to achieve the actual business result that you are interested in.

The number of vendors that walk in my door and expect that they are going to put a contract on my desk and I am going to sign it while they are sitting there is just phenomenal. I actually had a large vendor say to me recently, “We have been working on this contract for three weeks now and it usually takes only half a day”. It makes me wonder whether or not some of my IT management peers are signing things without a thorough review.

Based on the contracts that I see coming forward, I don’t think we are exerting enough market pressure on the organizations we’re contracting with. They don’t understand that if my company pays to develop something, my company owns the IP – I don’t care that it’s developed using their product. If they want to talk about how we can license what we’ve developed, that’s okay with me, starting from the basis of “we paid for it, we own it”. This appears to be a uniquely Canadian point of view.

The organization you are contracting with can manage its lawyers such that the risk that you are going to take is jointly understood – it is not a unilateral conversation. I have gone so far as to appear before executives and directors for certain vendors in order to get them to change a contract. I have been advised on more than one occasion by several vendors that we have, in fact, caused them to restructure their entire worldwide master contract.

I really worry that as a collective group of peers we are simply not paying enough attention to this situation; and without attention you don’t get market force; and without market force you don’t get change. So when it comes to contracting, I’m not only frustrated with the vendor community but, to be blunt, with my peers as well, because we continue to accept silly contracts with useless terms and inappropriate controls, rather than work on a more collective basis to influence these types of contracting practices.

It is particularly difficult when you are dealing with a company that contracts out of the US or that has a very heavy US business orientation and treats Canada like it is a distant second cousin. In these cases, it is essential to get to know the vendor’s organization. You need to work your way to the person(s) who can actually make a decision to enable the changes you need to make. Usually when you present your cause for change and listen to their rationale you can meet in the middle and close the deal as a win-win. It’s worth the extra effort to both sides. 049626

Valerie Adamo is Vice President and Chief Information Officer of the Workplace Safety & Insurance Board of Ontario. Based in Toronto, she can be reached at

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