2014 Resolutions Series: Know Thy Affiliates

At the beginning of January, we published 8 Technology Contacting Resolutions for 2014.  To underscore that last is not always least, we thought we'd begin this series with #8 on the list, "Pay Attention to Affiliates".  Many corporations today have complicated corporate structures with a large number of affiliated entities.  How affiliates are treated in technology contracts can have a profound effect on the ultimate value of the contract to your organization.  To avoid getting into trouble when it comes to affiliates, pay particular attention to the following considerations:

• Know your counterparty. Are you contracting with the parent company or a subsidiary? In the event of a breach, can you recover what you need to from the subsidiary or should the parent guaranty performance? Be wary of the inclusion of "and its affiliates" in the definition of a party under the agreement, as this could unintentionally create third party beneficiaries that have rights –