Acquiring Hardware

Computer hardware may be acquired either by outright purchase or lease transaction. An acquisition of hardware may or may not also include software and this software may well be subject to separate licence agreements.

Key issues in selecting hardware include compatibility with your existing equipment, assessing whether the equipment acquired can grow in line with your business and whether the manufacturer will continue to support it.

As well as general legal considerations involved in the acquisition of equipment, key contractual and specification issues in acquiring hardware include the following:

Performance

A performance clause should address speed of operation and capacity of the equipment based on the uses to which the equipment is likely to be put.

Installation, Maintenance and Upgrades

Installation requirements (especially with major equipment) should be agreed. Maintenance and support is commonly addressed in a separate contract and in the case of equipment performing a critical business function, it is important to purchase the best maintenance package in terms of speed and thoroughness of response you can afford.

You should specifically agree:

• what forms part of, and is excluded from the maintenance package including whether payment is required for parts or labour;
• whether there is a call-out charge; and
• whether replacement equipment will be loaned if necessary.

In addition, you should consider the opportunities for upgrade of the equipment at a later stage to more modern equipment.

Warranties and Liability

You should check the specific warranties offered by the seller as to the effectiveness of the hardware itself, the effectiveness of any accompanying software and that neither infringe intellectual property rights of third parties.

The law also implies terms that the seller is legally entitled to sell you the equipment, and that the equipment is of satisfactory quality, is fit for its purpose and is in conformity with its description or specification. In business to business sales, these implied terms (but not the term related to title) can be excluded or limited. However such limitation or exclusion is only legally valid if to allow it would be reasonable.