Technology contracts

How BC law treats it

No single statute governs technology contracts in BC. Between businesses, the common law of contract controls formation, interpretation and remedies. The Electronic Transactions Act confirms that contracts can be formed and signed electronically, including by clicking 'I agree'. Where the deal includes the sale of goods such as hardware, the Sale of Goods Act implies conditions of title, fitness and merchantable quality unless the contract validly excludes them. The Business Practices and Consumer Protection Act applies only where an individual buys primarily for personal or household use. Intellectual property ownership must be addressed expressly. Under the federal Copyright Act, an employer owns software an employee writes in the course of employment (s. 13(3)), but an independent contractor or development firm owns what it writes unless it assigns the copyright in writing signed by the owner (s. 13(4)). Moral rights cannot be assigned, only waived (s. 14.1). Limitation of liability and exclusion clauses are usually enforced as written between commercial parties. Under Tercon Contractors Ltd v British Columbia, a court asks whether the clause applies on its terms, whether it was unconscionable when made, and whether public policy overrides it. Where the vendor handles personal information, the customer remains responsible under BC's Personal Information Protection Act, or PIPEDA for activity it covers, so data protection, security and breach terms belong in the contract.

What it means for your business

A technology contract often determines who owns the product a startup is building, what happens to customer data, and how much a vendor must pay if the system fails. Founders who rely on vendor standard terms frequently find the liability cap equals a few months of fees and that the developer owns key code. Negotiate IP ownership, data rights, service levels, security obligations and exit assistance before signing. Example: A Vancouver logistics startup hires an offshore development shop to build its routing platform. Because the contract has no written assignment of copyright, the shop still owns the code, and the startup has to negotiate an assignment before investors will close a financing.

Risks and common mistakes

Assuming paying a contractor to write code makes the business the copyright owner without a signed written assignment. Accepting a vendor's liability cap without checking whether it excludes data breaches and confidentiality claims. Leaving out service levels, support response times and remedies for downtime in a SaaS agreement. Failing to address return and deletion of data, and transition help, when the contract ends. Applying consumer protection rules to a business to business deal, or ignoring them in a consumer app's terms.