Mastering IT Contract Reviews: A Guide for Technology Leaders

When my team or peers send me a vendor contract for review, I don’t read it like a lawyer. Instead, I approach it as an IT leader. My focus is on identifying what can make or break our ability to manage the partnership once it’s signed.

Too often, the technical and operational details are overlooked. Legal teams handle liability, indemnification, and intellectual property, but those aspects aren’t what keep our projects running smoothly.

As an IT leader, my responsibility is to ensure the agreement protects the business from a technology and operational standpoint. I ask myself: Can we manage it? Can we escalate when necessary? And can we exit without penalty if the partnership doesn’t work out? This is why I’ve created an informal IT Contract Review Checklist that I run through before sending any contract to Legal.

Here’s what I always look for before the contract ever reaches Legal.

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1. SLAs That Actually Mean Something

If the service-level agreement looks good on paper but lacks substance, it’s meaningless. I look for measurable, trackable SLAs — things like response times, resolution times, and uptime percentages. Most importantly, I want to know what happens when these metrics are missed.

If the “fees at risk” amount to $500 on a $500,000 contract, there’s no real incentive to fix chronic issues. A strong IT leader pushes for SLAs that reflect real performance accountability. They don’t need to be punitive; they just need to be meaningful.

Weak SLA	Strong SLA
Response within "reasonable time"	Response within 4 hours, resolution within 8 hours
$500 credit cap	5% monthly fee credit for > 4 hours sustained service degradation
Vendor will provide monthly system maintenance as needed.	Vendor will perform scheduled system maintenance the first Sunday of each month between 12 AM and 4 AM CST with seven-day advance notice of planned changes on a published maintenance calendar.

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2. Clear Data Ownership, Use, and AI Rights

Who owns the data? How can it be used? Can the vendor aggregate, analyze, or feed it into their AI models?

This is where I see the most hidden risk today. Many contracts now include language that allows vendors to use your organization’s data for “improving products and services” or “training algorithms.” That might sound harmless — until your data ends up shaping someone else’s AI model or appearing in an unrelated dataset.

I ensure our contracts are explicit:

• We own our data. The vendor is a steward, not an owner.

• AI use requires approval. No use of our data (structured or unstructured) for model training, testing, or product development without written consent.

• Return and deletion are documented. When the engagement ends, data must be returned in a usable format and securely deleted — with confirmation.

  
  

It’s not about distrusting vendors; it’s about recognizing that in an AI-driven world, data is fuel. Once it leaves your hands, you can’t control where it goes.

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3. Exit and Transition Plans

Every IT leader needs an exit strategy before the ink is dry.

I look for clarity around termination notice periods, transition support, and offboarding costs. If the vendor walks away or performance falls short, I need to know how quickly we can move, what they’ll provide to help transition, and whether they’ll cooperate.

A good exit clause isn’t about expecting failure; it’s about protecting the business if things change.

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4. Escalation and Governance Structure

It’s not enough for the contract to say “contact customer service.” I look for named escalation paths and governance expectations — who’s responsible for what, how issues are tracked, and how often we meet for service reviews.

The best contracts define governance before the first issue ever occurs. When something goes wrong (and it will), you want a clear path for resolution, not an argument about who should have been informed.

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5. Performance and Fee Alignment

If performance and payments aren’t connected, accountability disappears. I look for milestone-based payments or periodic performance reviews tied to renewals.

Vendors perform best when the contract rewards consistency and transparency — not just completion.

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Wrapping It Up: Why Every Leader Needs an IT Contract Review Checklist

The goal of this review isn’t to replace your legal team. It’s to ensure your organization can run, measure, and manage the partnership effectively.

When IT leaders send contracts to Legal with these five areas already addressed, they demonstrate maturity, foresight, and operational leadership. They also save everyone time — because Legal shouldn’t have to catch what IT should already know to look for.

So before you hit “send” to Legal, ask yourself:

Can I manage this vendor day-to-day, hold them accountable when performance slips, and exit cleanly if I need to?

If the answer isn’t yes, you’re not ready to sign.