November 11, 2025 Negotiating with Big Tech: Top 3 Issues To Watch Out For

Focus on negotiating key issues rather than attempting to revise the entire agreement.

By Kayla O’Leary Daly

Companies of all shapes and sizes, from start-ups to major corporations and across all industries, deal with major tech companies in some capacity. Your company is engaging with big tech to license the rights to use a variety of key solutions, which are critical to the smooth operation of your business. Often the pricing and nature of the solutions give the tech company more control over the agreement terms. As a result, your company will typically have to focus on key issues rather than attempting to significantly revise the entire agreement. This article identifies three key issues to be on the lookout for in these agreements and provides tips on the terms worth fighting for.

The Right to Terminate

A number one priority in negotiating any agreement should be the ability to get out of the relationship if it takes a turn for the worse. Despite what the rest of the contract terms state, you never know what could happen – the vendor could experience a major data breach, go bankrupt, or just stop providing the same caliber of services to you for whatever reason. Your company may want to stop the relationship (or at least have the leverage provided by the option to stop the relationship) and avoid having litigation as the only path forward to either correct or end the relationship.

Most big tech companies will not agree to a right for you terminate for convenience at any time, however, there are other ways you may better position yourself to be able to end the agreement, if necessary. Especially for subscription-model license agreements with tech companies, it is common for the term of the subscription to automatically renew. This means that if you subscribe for a one-year term, the subscription will automatically renew at the end of that year (sometimes at the vendor’s then-current rates, which would likely be higher than what you originally agreed to), unless you provide notice within a certain amount of time before the expiration of the initial term. It is not unreasonable to push back on this and request for the agreement to renew only if you elect for renewal prior to the expiration of the initial term.

There are also other termination rights you can try to work in that are not as aggressive as a right to terminate for convenience. For instance, you can negotiate for the inclusion of a termination right in the following circumstances:

• If the vendor upgrades or otherwise changes their software in a way that materially degrades its usefulness for your company;
• If the vendor is unable to provide the services for a period of time because of some unforeseeable circumstance out of its control (often referred to in contracts as a “force majeure event”); or
• If the service is in a downgraded state or completely unavailable to you for certain periods of time.

At a bare minimum, you can request are the right to terminate if the vendor breaches the agreement or goes bankrupt, which are market standard terms.

Rights and Restrictions Regarding Your Data

Given the nature of the products and services they are providing, many tech companies will have access to significant amounts of your data and sometimes very sensitive data. As data continues to become more valuable (especially with advancements in artificial intelligence), we are seeing tech companies increasingly try to broaden their rights to use your data in these agreements.

There is a delicate balance between ensuring the vendor has the appropriate rights they need to use your data in order to provide the contracted-for product or services, and ensuring that the vendor does not use your data for additional or unnecessary purposes.

It is common to see language in a tech vendor’s agreement stating that they have the right to collect, anonymize, and aggregate your data (which can include both the data you input into their software or usage data they gather based on how you interact with their software) and use such data in a broad context, e.g., in order to improve their products and services, to train artificial intelligence, or for other commercial purposes. You can push back on this and may want to consider doing so especially if the language goes as far to say that the vendor owns that data. Push back can be “right sized” to reflect the circumstances and the amount of leverage you have and, therefore, might include rights to use only some of your data or limitations in the types of permitted uses.

Many vendors will claim that their software automatically collects, gathers or tracks such information and that there is no way to “turn off” that feature for just one client. If that is the case, then you may need to assess the sensitivity of the information the vendor would have access to and the risks associated with their access and use. If the risk is too great, you may need to walk away from that vendor.

Recourse for Breach

Lastly, it is important that you have appropriate safeguards in place and a right to recourse for a possible breach so that you can either force vendor’s performance or collect damages for non-performance. Here are some key clauses in a tech agreement where such recourse can be incorporated:

• Representations and Warranties – Standard representations from a tech vendor that may be appropriate to include are: (1) that the software will function in accordance with any agreed upon specifications; (2) that it will be provided in compliance with laws; (3) that it will not contain viruses; and (4) and that your use of it will not infringe upon any third party’s intellectual property rights.
• Indemnification – Depending on how much of your data the tech vendor is processing or otherwise has access to, and how sensitive that data is, you may want to try to include data breaches among the claims covered by indemnification. Intellectual property infringement is also important to have covered by indemnification, and this is generally market standard so you can reasonably push for it. You can also consider other “fixes” to infringement, such as requiring the vendor to modify the software so that it is no longer infringing, obtain a license so you can still use it, or provide you with a refund.
• Limitations on Liability – Pick your battles carefully when it comes to carve-outs on the limitations to liability because vendors will likely push back aggressively on any proposed changes to these terms. Negotiation of the limitations on liability will be related to what you are able to negotiate for the representations and warranties, as well as indemnification. Ideally, you want breaches of representations and indemnification claims to be carved out of limitations on liability; at a minimum, it is market standard for the carve-outs to limitations on liability to include the vendor’s gross negligence or willful misconduct.

The above summaries only scratch the surface on each topic. There are, of course, other elements of tech agreements that are important to closely consider. When you have limited leverage negotiating with bigger companies and you have to pick your battles, the three issues discussed here are important to keep in mind.

About the Author:
Kayla O’Leary Daly is an Intellectual Property + Technology transactions attorney at Robinson+Cole. Kayla assists clients with a wide variety of intellectual property and technology counseling, prosecution and transactional matters, including intellectual property development and license agreements, software as a service (SaaS) agreements, data license agreements, outsourcing and services agreements, and various other commercial contracts that include intellectual property and/or technology components.

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