Contract Clause Reference Guide

A perpetual license means you can keep using what you buy forever, even if you stop paying. A subscription means access only lasts as long as you pay. It sounds simple, but contracts often hide the distinction in confusing language about "access rights" vs. "ownership."

With a perpetual license, you can preserve access to collections your patrons depend on. With a subscription, you lose everything the moment you cancel, even content you\'ve been paying for for 20 years. This distinction determines whether you're building a collection or renting it.

"We need perpetual rights to all content paid for during the subscription period. If we terminate, we retain access to the materials we\'ve already purchased." Many vendors will negotiate this for database content even if they won\'t for frontlist ebooks.

Most contracts are silent on this. When a vendor fails (and they do; ask libraries about Baker & Taylor bankruptcy), you're left with locked content and no access. Good contracts specify what rights you get if the vendor can\'t maintain the service or goes under.

If your ebook vendor files for bankruptcy, you don't automatically get to keep the ebooks you paid for. You become an unsecured creditor competing with other institutions for assets. Perpetual content may be inaccessible if the company that encrypted it disappears.

"If the vendor ceases operations or breaches the contract, we receive copies of content and decryption keys, or the vendor must provide alternative access." This is called an "escrow arrangement" or "continuity clause" and is standard in sophisticated contracts.

This is about whether you can extract patron usage data, reading records, and circulation information from the vendor's system. Some vendors keep this data locked in their platform. Others let you export it. This matters more than many librarians realize.

Your patron data is yours; you collected it. If you can\'t export it, you're trapped. You can\'t analyze usage patterns without the vendor. You can\'t migrate to competitors. You can\'t prove to your board what your collection is worth. You can\'t even answer basic questions about patron behavior without asking the vendor for reports they may charge you for.

"We must have the ability to download all patron usage data, circulation records, and holdings information in standard formats (CSV, JSON) at any time, including upon contract termination. This data must be available in machine-readable format without additional fees."

Concurrent user limits cap how many people can use a resource at the same time. "5 concurrent users" means the 6th patron gets a "resource in use" message. This is different from total users; you could have 500 total patrons but only 5 simultaneously.

Concurrent user limits create artificial scarcity. During homework season or exam prep, patrons get locked out of resources you're paying for. It\'s like paying for a book but having it only available during off-peak hours. Unlimited access, even with session timeouts, is almost always better for patron experience.

"Negotiate for unlimited simultaneous users, or the highest number your budget allows. If limited, add language allowing user queuing instead of total denial of access." Ask for usage statistics showing peak concurrency so you can request appropriate limits.

A windowing or embargo period means you can\'t provide access to content for a set time after publication. Publishers impose this on ebooks to protect print sales. A 6-month embargo means you can\'t buy the ebook until 6 months after hardcover release.

Embargoes hurt patrons most when they need books most. Popular new releases aren't available in ebook form when demand is highest. Your collection feels incomplete. And vendor data shows embargo periods are increasingly used as a tool to force libraries to license at higher prices to get early access.

"No embargo period, or maximum 30 days after hardcover release." For collections that must have embargoes, negotiate around popular titles. Many vendors will exempt bestsellers or high-demand works from embargo if you ask.

Most contracts say content can only be used by patrons with valid library cards. This seems reasonable until you need it for staff training, consortium sharing, or public demonstrations. Contracts often make these exceptions illegal without explicit permission.

Staff can\'t use databases to teach patrons proper research techniques. You can\'t share great resources with other libraries in your consortium. You can't demo content to your board. You technically violate your contract every time a staff member accesses content for anything other than helping a patron.

"Authorized users include library patrons AND library staff performing work-related activities. Allow consortium member libraries to access content for assessment and training purposes. Permit board members, trustees, and municipal officials to view content during authorized visits."

Geographic restrictions limit where content can be accessed. You might only be able to serve patrons in your city or state. If your library consortium spans three states, the vendor might restrict access by location. This was more common 10 years ago but still appears in older or international contracts.

Geographic restrictions are increasingly incompatible with how libraries work. Virtual libraries, multi-state consortia, digital-first patrons, and hybrid work models make location-based access obsolete. Worse, defining "geographic service area" gets complex fast. Does a patron on vacation count? What about remote workers?

"Remove geographic restrictions entirely. If absolutely required: define your service area clearly (e.g., "All patrons with valid [Library Name] cards, regardless of location"). Specify that off-site access for library patrons is permitted."

Publishers and vendors sometimes reserve the right to remove content from their platforms, hide specific titles, or curate what you can access. They might pull content due to copyright disputes, demand from powerful groups, or business decisions. You need clarity on whether you control your collection or the vendor does.

If the vendor can unilaterally remove titles, you can\'t guarantee your collection\'s integrity. You might be paying for content that disappears. Intellectual freedom principles mean you choose what to collect, not the vendor. When vendors hide books due to complaints, you've lost collection autonomy.

"Vendor may not remove content without written notice and [30-day] notice period, except for legal requirements. Any removal entitles library to price adjustment or termination. Library retains full control over which content is made available to patrons."

Auto-renewal clauses automatically extend your contract unless you cancel by a specific date. The notice period is how far in advance you must notify the vendor to cancel. A 60-day notice period means you must tell them by May 1st if you want to cancel a contract ending June 30th.

Notice periods create budget paralysis. You have to decide next year\'s spending before you know this year\'s usage or outcome. By the time you realize a resource isn't working, the notice deadline has passed. And vendors love notice periods because they make it easy for mediocre contracts to auto-renew.

"Remove auto-renewal entirely, or require written renewal agreement. Minimum 6-month notice period before any auto-renewal. Require vendor to send reminder notices 120 days, 90 days, and 60 days before notice deadline."

A price increase cap limits how much the vendor can raise your fee each year. "5% annual increase cap" means your cost can't go up more than 5%. This provides budget predictability. Without caps, vendors can increase prices dramatically year over year.

Library budgets don't grow annually. When one resource jumps 20% in cost, you have to cut elsewhere. Vendors know this. They use big increases to force difficult choices or squeeze more money out of struggling budgets. Price caps maintain contract stability and prevent vendor exploitation of budget constraints.

"Annual increases limited to [3-5%] or the increase to the Consumer Price Index, whichever is lower. Include usage-based adjustments that can reduce price if usage drops. Require 90 days' written notice of any price increase over [3%]."

Early termination fees are penalties you pay if you cancel before the contract end date. A 3-year contract with a 50% termination fee means if you cancel year 2, you pay half the remaining contract value. These lock you in regardless of whether the resource works.

Termination fees prevent you from exiting bad contracts. If a resource fails, has downtime issues, or poor patron usage, you're still obligated to pay. It incentivizes vendors to provide poor service because they keep your money either way. You lose flexibility when budget cuts happen.

"No early termination fees, or fees limited to 30 days' notice. If vendor materially breaches (service down >5 days/month), you can cancel without penalty. Usage-based licenses should be cancellable quarterly."

Vendors increasingly want to use content in their systems to train AI models. This means your library\'s collection (books, articles, patron interactions) becomes data for the vendor\'s machine learning. The vendor may never mention this, burying it in language about "optimization" or "service improvement."

When vendors train AI on your content, they\'re extracting value from what you\'ve purchased. They may use your content to build products they sell to competitors. They may use patron data to train models that make recommendations to your patrons. You have no control over how these models are used or what bias they encode. And you're giving them this value for free.

"Vendor may not use content or patron data to train machine learning models, build AI products, or create derived works without explicit written consent. Content used for service operations only (not model development). Any AI training requires separate agreement and compensation."

Vendors collect extensive patron data: what they read, when, how long they spend on items, searches, reading lists, annotations. Good contracts define what data vendors can collect, who they can share it with, and who owns it. Bad ones leave this completely open, allowing vendors to sell your patron data.

Patron privacy is a core library value. When vendors resell patron data, you're breaching patron trust. Data brokers buy patron information to build marketing profiles, target ads, or sell to academic researchers. Your patrons think their reading is private, but it\'s not if the vendor sells their data. This also opens your library to liability.

"Vendor may not collect patron personally identifiable information beyond what's necessary for service. Zero data sharing with third parties. Patron data may not be sold, rented, or used for marketing. Data retention limited to contract duration, then deleted. Library owns all patron data and can request deletion anytime."

Audit rights allow you to verify the vendor is complying with the contract. This means checking usage numbers, data handling practices, security measures, and whether concurrent user limits are actually enforced. Vendors often claim audit rights are too expensive or invasive, then hide contract violations.

Without audit rights, you have to trust the vendor\'s word. If they claim you have 5 concurrent users, you can\'t verify it. If they claim patron data isn\'t being shared, you can\'t check. If they\'re overcharging based on usage, you can\'t prove it. Audit rights are your enforcement mechanism for everything else in the contract.

"Library has right to audit vendor's compliance with this agreement, including usage tracking, data handling, security measures, and concurrent user enforcement. Audits may be conducted annually or on reasonable notice. Vendor must provide supporting documentation and access to systems. Costs borne by vendor if material noncompliance found."

Data portability means you can export all your data (collection metadata, patron records, usage statistics) in standard formats you can move elsewhere. Preservation means the vendor commits to maintaining data integrity and not letting formats become obsolete. Many vendors keep data locked in proprietary formats.

Libraries are stewards of collections. You may need to migrate to different systems. You may need to preserve collection records for history. If data is locked in a vendor\'s proprietary format, you can\'t migrate. If the vendor stops maintaining data, you lose it. Portability protects your institutional memory and operational independence.

"All data must be exportable in standard, open formats (CSV, JSON, XML). Include complete metadata, usage statistics, and holdings information. Export available on demand and automatically upon contract termination. Vendor must maintain data in formats that remain readable for at least 10 years after contract end."

An SLA is a promise about service quality, usually expressed as uptime percentage. "99.5% uptime" sounds good until you do the math: that's 3.6 hours of downtime per month. SLAs should specify not just uptime but also response times for support, performance metrics, and what happens if the vendor misses targets.

Without an SLA, your resource can be down for weeks and the vendor has no obligation. Patrons can\'t access databases during exam week. You lose library access during a critical power outage at the vendor\'s facility. Service credits or automatic fee adjustments incentivize vendors to actually maintain their infrastructure.

"Minimum 99% uptime, measured monthly. Exclude planned maintenance (which must have 7 days' advance notice). Monthly outages exceeding 4 hours entitle library to [1% of monthly fee] credit. Unscheduled downtime exceeding 24 hours per month = automatic 5% monthly fee reduction. Support response time maximum [4 hours]."

A liability cap limits how much the vendor can owe you if they breach the contract or cause damage. Standard cap language limits liability to "amounts paid in the prior 12 months." So if you're paying $50K/year for a database that goes down for 6 months, your max recovery is $50K, but you lost access to critical research.

Liability caps protect vendors from consequences. They encourage negligence because worst-case scenario is capped. If a security breach exposes patron data, the vendor's liability might be limited to your annual fee, far less than the harm caused. This is backwards. The party causing damage should pay for it, not have their liability limited.

"Remove liability cap entirely for data breaches, security failures, and intellectual property infringement. For other breaches: limit to [2-3x] annual fees. Exclude caps on indemnification obligations, confidentiality breaches, and bodily injury claims."

"Support included" can mean anything from email response in 48 hours to 24/7 phone support. Contracts often don\'t specify support hours, response times, or escalation procedures. You don\'t know if you're getting live person support or automated chatbot, or whether support staff can actually solve problems.

You need support when things break, especially during business hours. If support only responds in 72 hours, that\'s useless when your database is down during exam week. If support can\'t actually troubleshoot or provision changes, you're calling them only to hear "I don\'t know." Support quality determines how quickly you can resolve patron issues.

"Support provided during library operating hours, minimum [8AM-8PM] EST, Monday-Friday. Maximum response time [4 hours]. Designated support contact with escalation to engineering if needed. Support includes technical troubleshooting, configuration changes, and authentication issues. Dedicated support line, not general ticketing."

Notice period is how much advance warning you must give before cancelling. "60-day notice to terminate" means you must tell the vendor 60 days before you want to stop paying. This is different from auto-renewal notice period; this is about ending an active contract.

Long notice periods lock you in. You might want to cancel immediately due to budget cuts or service problems, but you have to keep paying for 60-90 days while notifying the vendor. Short notice periods give you flexibility. They also affect pricing, since vendors know they can't force you to keep paying if service gets bad.

"Either month-to-month terms after initial period, or 30-day termination notice maximum. For breach situations (security failure, service down >5 days/month): immediate termination without notice. Vendor must acknowledge termination notice in writing within 5 business days."

When your contract ends, the vendor must provide copies of all your data: holdings, usage statistics, patron records, and metadata. This is critical for migration to new vendors or archival. Many vendors make this difficult, slow, or expensive, hoping to keep you as a customer through forced dependence.

Without data export, you lose institutional memory. You can\'t prove what you had in the collection. You can\'t migrate usage statistics to analyze what worked. You lose patron reading records and recommendations. Data export isn\'t just convenience; it\'s the difference between an orderly transition and chaos.

"Upon termination, vendor provides all library data within 30 days at no cost, in standard formats (CSV, JSON, MARC). Include complete holdings, usage statistics, patron records, and metadata. Data provided automatically; no vendor approval required. Data remains readable and usable indefinitely."

Transition support means the vendor helps you exit their system smoothly. This includes data mapping help, custom export formats for your new system, support staff availability during the transition period, and maintaining service quality during wind-down. It's the difference between an organized exit and abandonment.

Switching systems is complex and risky. If the vendor doesn't help, you have to reverse-engineer data, rebuild imports, and hope nothing breaks during transition. If the vendor continues providing support, even at reduced capacity, you can migrate users safely. Poor transition support creates service gaps that frustrate patrons and staff.

"During [90-day] transition period after termination: vendor maintains full service access for library and patron migration. Provides data mapping documentation and technical assistance for import into alternative systems. Assigns dedicated transition contact to support migration activities."

Survival clauses specify which contract terms continue after termination. Things like confidentiality, indemnification, and payment obligations should survive. But some vendors try to sneak in clauses that lock you in even after you cancel, like continuing data deletion or access revocation terms.

Survival clauses protect you after the contract ends. Confidentiality should survive so the vendor can\'t publish your usage data. Indemnification should survive so they\'re liable for IP infringement they caused. But survival clauses can also create obligations after you cancel, like deleting data you needed to keep, or continuing to pay fees.

"The following survive contract termination: confidentiality obligations, indemnification, payment for services through end date, and data protection commitments. Specifically, library data deletion obligations do not survive; library retains perpetual rights to data exported at termination."