Software Contracts

Software Contract Guidance — Quick Introduction

This guide provides an overview of key requirements for software contracts across Minnesota State. It outlines legal, technical, and procedural expectations, including when to use the Software Contract Addendum, what terms are prohibited or required, and how to properly execute agreements involving software and digital services.

Overview

• Software contracts license the use of software — not ownership.
• Common contract types include Terms of Service, EULA, SaaS, Subscription, and Click-through agreements.
• All software contracts require IT security review and, in most cases, legal review by the Office of General Counsel (OGC).

Approval and Review Requirements

• IT Security Review: Mandatory for all software to ensure data protection and compliance.
• Legal Review: Required for contracts exceeding $10,000 or those involving access to private data.
• Reseller Purchases: Require separate professional/technical (P/T) contracts and manufacturer licenses.

Software Contract Addendum

• Ensures compliance with Minnesota State policy and state law when a full legal review is not conducted.
• Can only be used for low-risk purchases under $10,000 that do not involve private data or payment card processing.
• Must be attached to the main contract and signed by both parties using full legal names and physical addresses.

Required vs. Prohibited Terms

• Do Not Agree To: indemnification, mandatory arbitration, non-solicitation, tax obligations, or contracts exceeding five years.
• Must Include: compliance with the Minnesota Government Data Practices Act, FERPA, and Minnesota jurisdiction.

Execution Steps

1. Submit the software review questionnaire.
2. Determine addendum eligibility and send it to the vendor if applicable.
3. Address vendor redlines and escalate unresolved issues to OGC.

Contacts and Resources

• OGC Contract Review: Amanda Bonhoff, Heidi Slagers
• IT Security Review: System Office IT Security
• Legal Counsel:
  • Daniel McCabe — dmccabe@minnstate.edu
  • Melitta Drechsler — mdrechsler@minnstate.edu
• OGC Contract Training (2025-02-11)
• OGC website — forms, templates, and guidelines