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Chapter 27 - Software Licensing and Maintenance Contracts

27.5 Contractual provisions for software license agreements

27.5.1 Assignment of software license and maintenance contracts

Assignment clauses deal with the rights of each party should the software supplier sell to, merge with, or decide to transfer the agreement to another supplier. The language will typically read that the supplier has all of the rights to assign the agreement, while the agency has none. Each party to the agreement should have equal rights to assign or not assign the agreement. It is recommended that purchasing agencies ensure that they have the right to assign the agreement to any other Commonwealth entity or private entity upon providing notice of the assignment to the supplier. The suggested contract wording would allow the supplier to assign the agreement, but only with the written consent of the purchasing agency. Suggested contract wording: "This agreement may not be assigned or otherwise transferred by either party, in whole or in part, without prior written consent by the other party." Should a supplier absolutely reject this language, the agency may be successful in getting supplier to accept the following alternate language, which would follow the supplier's language: "Notwithstanding the foregoing, Name of Agency may transfer its license (i) to another Commonwealth agency due to legislative action or if such transfer is in the best interests of the Commonwealth or (ii) to the Commonwealth's infrastructure partner, if this Contract is so transferred under direction of the Commonwealth's Secretary of Administration or Chief Information Officer."

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