India's peak IT body tells outsourcers to check contract cancellation fine print while Coronavirus reigns NASSCOM – India's peak body for the IT and business process outsourcing industries – has advised its members to read the fine print in their services contracts so they understand the implications of a long lockdown that leaves them unable to deliver. The National Association of Software and Service Companies (NASSCOM) is an …
i'd expect their staff to work from home if possible and customers should expect degraded service.
There will also be an uptick in fraud as criminals take the opportunity to exfiltrate data from previously securely controlled (as in staff hand over phones etc before entering the work room and no data is allowed out of those rooms except via the controlled systems) systems.
there is no point taking undue risk.
A wise former colleague once said that contracts should be carefully written and then put in a drawer, with both parties acting in good faith based on the spirit of the agreement.
When a contract comes back out of the drawer, it is because the relationship has shifted and it needs to stand up to scrutiny.
From personal experience I have learned that at that point it will be hard, if not impossible, to change the terms to both parties' satisfaction.
Lovely phrase - forgive my ignorance after all these years, but I'm going to put it in my "Useful Quotes" folder:
"contracts should be carefully written and then put in a drawer, with both parties acting in good faith based on the spirit of the agreement."
"We are also putting a robust business continuity plan – powered by next-generation technologies – in place to combat the situation, while ensuring safety of all."
I can translate this into current American vernacular:
"We have a beautiful plan. A strong plan. The best plan."
I'm sorry but its not a laughing matter.
The problem is that many of the global fortune 500 have relied too heavily on outsourcing and they never really read or understood the fine print. So while many of their employees who already have vpn access and can work from home. Their contractors cannot, nor can they come in to the offices.
So those companies where a major portion of their hands on workforce are running on a skeleton crew, praying that nothing breaks.
Hang on for the ensuing shit storm that we all pray never happens.
It's up to whichever court's law the contract is written under as to whether a pandemic is force majeure. For example, UK law, which is used in many contracts, has no concept of force majeure. China is almost certain to declare it such as it lets all their companies off the hook. Same with India. If the contract is written under US law, though, you might struggle.
IANAL, this comment is for entertainment purposes only, etc.
most US companies contracts that I have seen require the contracts to be effective under a state in the US. That state might be either the state its registered, or where ever its corporate legal is based.
These contracts are almost always signed under Californian, Massachusetts or Delaware jurisdictions. That would be for both TCS or HCL.
The comment on UK law and the lack of force majeure is not strictly true.
There is no common law on the subject - however - it is usual to have force majeure defined within the contract - and from there have the concept.
You likely have it in your mortgage contract. like this: https://www.virginmoneyukplc.com/resources/df9d1f11-f5ea-4532-a0cb-20fc419e2f6f/Collection_Account_Declaration_of_Trust.pdf
It is typical in many significant contracts - its how its defined is the kicker in the UK, as it really depends upon the particular contract.
"The comment on UK law and the lack of force majeure is not strictly true."
I was under the impression we have the concept of 'Act of God', but not 'force majeure'. The two concepts are subtly different, and this distinction might be vitally important in contract law.
Edit: for example, these lawyers seem to think it doesn't exist in English law as a concept.
This comment isn't about India; what follows could apply to outsourcing within the same nation. Nobody loves your business and your customers more than your employees. Nobody will be more willing to go the extra mile, including taking personal risks, than your own employees. Partly from loyalty, partly for fear of being fired, partly because of pride in their job. If you outsource a mission-critical function to another company you are at risk when the fertilizer hits the ventilation system and the provider has to decide who is more important.
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