Contract Negotiations

Purpose
The purpose of this paper is address the issue of turnaround time in contract negotiations. We will present recommendations on how to streamline the contract negotiation process by implementing a change in the current process and creating a standard contract.
Background
Liferay, Inc. is a software and service oriented company who has an open-sourced product. It was founded in 2004 in response to growing demand for Liferay Portal, the market’s leading independent portal product that was garnering industry acclaim and adoption across the world. Today, Liferay, Inc. houses a professional services group that provides training services, consulting services, and enterprise support services to their clientele in North America, South America, EMEA, and Asia Pacific. All Liferay, Inc. entities are affiliates of each other. Each country has a local office. The employees who work in the office are locals. This helps eliminate the language and cultural barriers. It also houses a core development team that steers product development. The
heart of the company is to impact the world community by giving back to different organizations/charities. The biggest market use to be the United States but now Europe is the biggest. Some of the software is considered indemnification. This means someone outside of the company contributes code to the product.
Product
Liferay Inc’ main product is a sophisticated programming interface that is used by its customers to create basic websites as well as the administration of those websites. The interface is written in java based off of open source software.
Sales Force
The sales force is the first point of contact for any company who is interested in the product. They handle the process from when an interested customer calls requesting information to when a customer is buying the actual product.
When a customer wants to purchase the software, they are given an order form to fill out. The order for is called and Enterprise Services Agreement. There are three different orders forms they can receive. All three of them include common terms standard to business contracts, defined terms used across Liferay contract templates, and payment terms, limitation of liability, and confidentiality. What the Enterprise Services Agreement doesn’t include is license grant and restrictions, offering specific terms, and Liferay legal assurance. They also include software EULA. The software EULA includes license grant and restrictions, intellectual property rights, warranty disclaimers, and Limitation of liability. The EULA doesn’t include support services terms and fees and payment terms.

Contract Negotiations
Contracts are a very important part of Liferay’s business.
Anything on the Enterprise Services Agreement can be negotiated by the customer. The language presented in the agreement is similar to the language that is found in another company's’ contracts. Negotiations have a caused a big issue for Liferay. If it chose not to negotiate with customers, it could lose business. Since Liferay is currently a small company, it does not have enough leverage, resulting in many companies wanting to negotiate most if not all aspects of the contract. The contracts are emailed to the customer by pdf. This gives them more time to read and question the contract. The sales force plays a huge part in how comfortable the customer feels about the contract they are signing. The turnaround time of a contract depends on the time it takes to negotiate the contract. In the U.S. it takes 15-20 hours to negotiate a contract and in Europe it is over 100
hours.