Contracts related to new technologies: legal aspects

Contracts related to new technologies: legal aspects

The impact of new technologies on society, both at a private and corporate level, has led to a new type of contract, not always specifically regulated, called “technological contracts”

Those are defined as:

  • Contracts on a computer good or service, regardless of the way in which they are formalized; or either, 
  • Contracts that are concluded on line, regardless of their purpose, and also called “electronic contracts.”

In the first case, these are commercial agreements entered into between an IT company and another company or individual that requires the provision of computer services, such as, for example: contracts for the development of computer programs (software development, web pages, mobile applications, …); hosting and maintenance services; or, technological outsourcing contracts; among others.

In the second case, these are consumer acts and usually correspond to the purchase of goods or services over the Internet. Law on information society services and electronic commerce, regarding legal notices, conditions of use, electronic contracting or electronic signature are applicable to those contracts.

General rules of contract law apply also to these contracts, with the peculiarities derived from its purpose (computer goods and services) and their complexity.

The most common contracts of the first case are software development contracts.

  • It is an atypical commercial contract whereby one of the parties (the supplier or developer) undertakes to develop a computer program ” tailored ” to the technical needs and functions specified by the customer. It is often part of a standard program. And of course, in exchange for a price.
  • What is the legal nature of these contracts? It is mostly understood that we are facing a  contract for a specific job (article 1544 of the Civil Code) and therefore what is agreed upon is the delivery of a software executed as agreed by the parties, that is, the supplier is obliged to obtaining a result, not only carrying out an activity.

The legal consequences that derive from this conception (together with the analysis of the will and intention of the parties when hiring) is certainly relevant, since it will determine the compliance and liability regime. If we understand that we are facing a service lease contract, the software development company complies with the contract if they act diligently in providing the service, but not get the result expected by the customer. The burden of proof that the services were performed diligently corresponds to the developer. In the contract for a specific job or result, the software must be delivered and executed in accordance with what was agreed by the parties to the contract, otherwise the developer will not be entitled to payment, and cannot be exempted from liability on the grounds that he has acted diligently.

  • Main clauses of a software development contract are among others : a) Specification of the software to be developed through a technical specification document as detailed as possible ; b) Specification of the phases of the project, depending on the different deliveries to be made, and specifying the way of acceptance by the client of each of the phases; c) E stablish a delivery date of the final software and set if any possible delays, reasons and consequences for the parties; or, d) Price or method of fixing it, for example depending on the result achieved.

With regard to the second kind of contracts or electronic contracts: Article 23 of Spanish Law 34/2002 of 11 July, on information society services and electronic commerce (LSSICE), provides that contracts  contracts concluded electronically will produce all the effects provided by the legal system, when the consent and other requirements necessary for its validity, therefore , the written form is not a requirement that entails the nullity of a legal transaction when the declaration of intent is issued through electronic means, in accordance with the principle of freedom of contractual form as contained in article 1278 of the Spanish Civil Code or 51 of the Spanish Commercial Code.

The requirements that Law 34/2002 of the LSSICE establishes for the validity of said contracts, are set out in articles 23.3  Provided that the Law requires that the contract or any information related thereto be in writing, this requirement shall be deemed satisfied if the contract or the information is contained in an electronic support, and article 27.4, insofar as it provides that the incorporation requirements of the general conditions of contracting in electronic contracting, replaces the requirement in writing if they are made available so that they can be stored and reproduced by the recipient.

 

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