The recent UK case of AstraZeneca UK Limited v International Business Machines Corporation [2011] EWHC 306 (TCC) concerned a dispute relating to the exit provisions in a Master Services Agreement (MSA) for IT infrastructure services between IBM and AstraZeneca. The parties disagreed as to the scope of IBM’s contractual obligations to provide post-termination assistance.

The Technology and Construction Court ultimately upheld AstraZeneca’s interpretation of the services that IBM must provide. The case is very fact specific, but it illustrates the importance of considering parties’ obligations post-termination. Exit management is often over-looked in the rush to get a contract finalised. However, the best time to negotiate such matters is when drafting the contract, rather than following termination when the parties are often no longer on good terms.

In an IT contract, exit provisions should include as much detail as possible about the services to be provided on exit and any materials, information or resources which must be provided to the customer to successfully transition to a new provider. It is also important to include clear details of the length of time that the transition services will be provided for and how much those transition services will cost (or mechanisms for determining these details).