Are mashups and "buy it now" too scary for lawyers?

As noted in my previous blog entries, I found the Office 2.0 conference fascinating.  The most exciting conversation I had was with Eric Hoffert of ShareMethods.  Eric and I chatted briefly about “OpenSAM.”  OpenSAM is a “set of recommendations” of standards and techniques for integrating SaaS applications.  While talking about this, Eric mentioned that there was a significant legal issue associated with mashups like this.  Eric envisions a time when your customers will be able to choose from a list of services offered by different vendors in a mashup.  So, for example, as a lawyer, I need word processing, a spreadsheet, presentation software, and e-mail.  So in a mashup, I’d choose these, and exclude services, say for databases.  However when I buy these products there will need to be a process in place so that each of the mashup participant’s various contract and legal needs are met.  However meeting these needs can’t involve a five day (at least) lag time while each of the parties lawyers hash out how to create a contract that protects everyone.  A customer isn’t going to wait 5 days for that – they’ll just move on.

The “buy it now” issue also came up this morning during Dan Golding’s presentation at the Hosting Transformation Summit.  Dan hammered home the point that the hosting world needs to move to a “buy it now” impulse purchase sales process.  So how do you create an ala carte / buy it now sales process and still protect yourself?

I think the answer is likely to be dynamic contracting.  In my mind this type of contracting process will initially look more like an algebraic equation than a typical contract.  Each party will supply its own set of variables and the end product will be the contract.  So, for example, your ability to provide a warranty may be less than X but greater than Y, with X being a complete warranty of fitness for a particular purpose with Y being no warranty at all.  Other partners in the mashup, or your “buy it now” process would have similar issues.  When a customer chose a particular service, a back end process would evaluate each of the parties warranty tolerances, produce a warranty clause that’s been previously agreed upon, and create carve outs for those members of the process whose tolerance is outside of the equation.  The customer would then be presented with a custom contract that was configured on the fly.

What a process like this would require determining which legal and liability issues are critical to you, and not insisting on your “standard” contract that reflects each and every nuance of your business, or those of your attorneys.  This could all be done before hand, and, because it’s likely to involve sets of standard contract terms, it may actually be cheaper to do than drafting, creating and negotiating custom agreements.