Business Continuity and Disaster Recovery Provisions in Technology Contracts: Key Concepts, Strategies

Description

BCDR provisions are increasingly vital, particularly in technology contracts. These clauses have become a primary concern for companies that depend on third-party technology providers to support mission-critical services. Recent disruptions, including the devastating wildfires in Los Angeles, have highlighted the vulnerability of even well-established organizations to unexpected business interruptions. Such events underscore the need for clear, enforceable BCDR clauses that address both the immediate recovery of operations and long-term resilience in technology service agreements.

For contract attorneys, drafting and negotiating BCDR terms requires expertise in risk management, contractual remedies, and the nuances of service level agreements. These provisions often involve concepts such as recovery time objectives (RTOs), recovery point objectives (RPOs), and cascading responsibility among multiple parties, including subcontractors and cloud service providers. Additionally, attorneys must be adept at balancing business needs with legal protections to ensure that these clauses are both practically feasible and enforceable. Poorly drafted or ambiguous BCDR terms can expose businesses to significant operational and financial risks, particularly in the aftermath of large-scale disasters, where inadequate disaster recovery plans can lead to extended downtimes and significant losses.

Listen as our expert panel provides practical strategies for drafting and negotiating BCDR clauses, key legal and operational risks to consider, and how to structure these provisions to protect organizations from risks associated with business interruptions.