When negotiating technology transactions, such as software licenses, cloud transactions and IT or business process outsourcing deals, the parties often fail to clarify the scope of services or describe accurately the product being acquired. In fact, the most frequent type of dispute in these deals relates to the scope of work.

Disputes result when the scope of the solution is vague and the buyer believes a particular service or functionality is covered by the fees and the supplier believes the service or function at issue is out of scope and will only be provided for an additional fee.

There are several reasons the scope of work is not accurately defined, including the following: the parties may focus too much on closing the deal quickly, minimizing the transaction costs and reaping expected benefits of the deal; the parties may wrongly assume that form documents from another transaction can be recycled for the current deal and fail to take into account that the scope may be substantially different from the current deal; the parties may be conflict avoidant and simply avoid conversations that would reveal gaps in their understanding of the deal; and finally, in international transactions, language or cultural differences may prevent the parties from identifying the gaps in their understanding.