Presentation given at Turku Agile Day 2013.

1. Agile Contracts
LL.M. Juha Ilola
Turku Agile Day
27.2.2013
Wednesday, May 15, 13

2. © Copyright Reaktor 2013
legal guy @ Reaktor
previously @ major law firm, Sulake
doing legal IT stuff since 2001
Wednesday, May 15, 13

3. © Copyright Reaktor 2013
Agenda
1.Contracts and Lawyers
2.Pitfalls of Waterfall
3.Agile Contracts
Wednesday, May 15, 13

4. © Copyright Reaktor 2013
1. Contracts and Lawyers
Wednesday, May 15, 13

5. © Copyright Reaktor 2013
people really do hate
lawyers.
Wednesday, May 15, 13

6. © Copyright Reaktor 2013
lawyer
unnecessary complexity
Wednesday, May 15, 13

7. © Copyright Reaktor 2013
drafting contracts is similar
to writing code.
Wednesday, May 15, 13

8. © Copyright Reaktor 2013
a beautiful contract:
a contract that
provides the simplest
possible solution to enable
the purpose of the contract.
Wednesday, May 15, 13

9. © Copyright Reaktor 2013
negotiation of collaborative
contracts should not be
approached as a zero-sum
game.
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10. © Copyright Reaktor 2013
optimize contracts for
successful outcome, not for
the (imaginary) interests of
one party.
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11. © Copyright Reaktor 2013
current economic climate
does not favor beautiful
contracts.
nevertheless, such beauty is
worth fighting for.
Wednesday, May 15, 13

12. © Copyright Reaktor 2013
2. Pitfalls of Waterfall
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13. © Copyright Reaktor 2013
waterfall contract
=
fixed price + fixed scope
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14. © Copyright Reaktor 2013
“the Supplier will deliver
to the Customer the
software described in
Annex 1 for EUR [price] by
[deadline].”
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15. assumptions in
the contract dicatate what
will be done, not real
(discovered) needs.
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16. © Copyright Reaktor 2013
Change Management
the Supplier will allow
change only if there is
enough money on the
table.
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17. © Copyright Reaktor 2013
Fixed price
encourages the
Supplier to do
minimum at
maximum price.
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18. © Copyright Reaktor 2013
The contract gives the
Customer illusion of
control, but in fact
the Supplier operates
as a black box and
has no incentives for
transparency.
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19. © Copyright Reaktor 2013
3. Agile Contracts
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20. © Copyright Reaktor 2013
Risks of a software project are best
addressed by using agile methods.
Not with contract.
Agile contract should make it possible
to capitalize on the ability of agile
methods to provide the Customer with
best value for a given budget.
Wednesday, May 15, 13

21. © Copyright Reaktor 2013
Empiric
Specified
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22. © Copyright Reaktor 2013
Backlog
Specified in detail
Recognized, required
functionalities
Release 1
Fuzzy ideas
Priority
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23. © Copyright Reaktor 2013
the object of an agile
contract should be the
performance of service
(as opposed to delivery of
specified results).
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24. © Copyright Reaktor 2013
team members subject
to approval of the
Customer.
the Customer has the
right require the
change of a team
member at any time,
for any reason.
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25. © Copyright Reaktor 2013
contents of the
services (i.e. backlog)
are agreed in
accordance with the
agile method.
no separate change
management is
necessary.
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26. © Copyright Reaktor 2013
charged on time &
material basis on the
basis of realized
hours / days.
set max budget?
charges are not tied
to the approval of the
results.
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27. © Copyright Reaktor 2013
alternatively target
price can be used.
target price is not
ideal, as it requires
scope and change
management.
saved or overrun
budget should be
divided 50/50.
Wednesday, May 15, 13

28. © Copyright Reaktor 2013
Reaktor’s satisfaction
guarantee:
if the Customer feels that
Reaktor has not performed
with satisfactory level, they
may notify Reaktor and
receive discount of charges
relating to last sprint - no
questions asked.
Wednesday, May 15, 13

29. © Copyright Reaktor 2013
indefinite term
contract with
2 - 4 weeks’ notice
period.
trial period at the
beginning of the
contract?
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30. © Copyright Reaktor 2013
the Customer should
receive all rights or
unlimited license to
the results of the
services.
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31. © Copyright Reaktor 2013
Thanks!
... remember to further the beauty of
simplicity when drafting contracts!
Wednesday, May 15, 13