Technology Proof-of-Concept Agreements: 6 Legal Issues Businesses Often Miss

Businesses frequently want to test new technology before committing to a full commercial contract. A supplier may offer a proof-of-concept (PoC) or pilot project to demonstrate how its software or platform works in practice.

Because PoCs are usually short-term and relatively informal, the legal aspects are sometimes overlooked. The parties may start testing the technology quickly, assuming that the legal details can be addressed later if the project progresses.

However, even a limited PoC can raise important legal issues. It may involve access to systems, the use of confidential information, or the processing of real data. If these issues are not addressed at the outset, they can create uncertainty or disputes later — particularly if the PoC leads to a commercial deployment.