Question

An organization is finalizing a contract to license a mission-critical ERP application from a small software vendor. The vendor retains ownership of the source code and will provide only compiled binaries and ongoing support. Senior management is concerned about business continuity if the vendor ceases operations. Which contractual provision would BEST address this concern?

Accepted Answer

A source code escrow agreement with a defined release trigger held by an independent third party

Answer

A service-level agreement specifying maximum support response times and penalties

Answer

A right-to-audit clause allowing periodic review of the vendor's financial statements

Answer

A liquidated damages clause payable if the vendor fails to deliver contracted enhancements