Buying Agri-Tech? Key contract issues every farmer should check
This note considers some (but not all) of the key issues to consider when buying a new or replacement tech product, such as farm monitoring equipment.
Data Ownership and Use
In the context of farm data, data ownership and use is a tricky issue. Some providers take the view “your data is your data” others don’t. Ownership of data sets comes with value and liability. Value: (apart from the obvious value in your using it) you can sell it or license it. Liability: you may be held responsible for anything that’s wrong with it. These issues can be manged contractually. However, it is important to know exactly where you stand.
Data ownership and use is such a knotty issue that the ADHB is now in the process of implementing a Farm Data Exchange to support the transfer of data from various sources under the control of the farmer. What the Farm Data Exchange will ultimately look like and whether or not it will be trusted remains to be seen.
Duration
How long will the contract last and, more importantly, can it auto-renew and, if so, at what price? Be careful of agreements that automatically renew and allow the supplier to increase the price.
Service Specification and Quality Promises
Is there an adequate tech specification? If you do not have an adequate specification, it can be very difficult to show something is not performing as it should.
Are there clearly defined service levels or key performance indicators? If so, what happens if they are not met? Are you given a service credit?
Are there any promises made about the reliability of the tech or the quality of its output? If so, what are the consequences of the system going wrong? Most agreements will contain very wide-ranging limitation of liability provisions. It is important to understand these so that you can understand what you are buying and what you can do if it goes wrong.
Exit
When does the agreement terminate? You should be able to terminate if the agreement is breached but what if you simply want to stop. Can you do this? Do you have to serve notice to terminate in a particular way to do so.
How and when can the provider end the contract?
What issues could the end of the agreement cause for your business. Do you need the outgoing provider to co-operate with or provide data to any supplier?
Need help?
To discuss these issues please call Victoria Spellman on 01473 350573, email [email protected] or fill out our enquiry form below.
Victoria Spellman is a Partner in the Corporate & Commercial Team at Barker Gotelee Solicitors.
