Legal strategy for IT businesses in Romania

This article is for general information only and does not constitute legal advice. Concrete situations must always be assessed together with a lawyer, based on the documents and legislation applicable at that specific moment.

1. The core question: how can an “innocent” contract quietly sabotage your business?

In many IT businesses, the contract is treated as a box to tick at the end of negotiations, not as a strategic tool. Founders rely on trust: “we’re friends”, “we’ve known each other for years”, “let’s not complicate things with lawyers”, “I downloaded a standard template from Google”.

The problem is that, in practice, a large share of commercial disputes stem from poorly drafted or poorly managed contracts. Analyses of contract management consistently show that companies lose on average around 8–9% of annual revenue because of weak contracting practices and inefficient contract management (unclear obligations, missing clauses, poor follow-up).Contract management statistics WorldCC data via Juro Wolters Kluwer overview:

World Commerce & Contracting and other studies also indicate that up to 40% of the value of a contract can be lost through weak governance and post-signature management, and that contract disputes make up a large share of civil litigation in many jurisdictions.Loio – Contract Management Statistics 2025 Sirion – Deloitte data on value leakage

For an IT entrepreneur, the real question is therefore not “do I need a contract?”, but: “how do I turn my contracts from bureaucratic paperwork into a business instrument that protects the company and supports growth?”

2. From legal naivety to contractual strategy: the typical path of an IT founder

2.1. Phase 1 – “It’ll be fine”: trust, templates and copy-paste contracts

In the early stages, many tech businesses rely on:

projects launched “on trust”, with key business terms agreed only on e-mail or chats;
contract templates downloaded from the internet, often based on foreign law and never adapted to local rules;
no clear separation between employee work, contractor work and freelance work;
late payments and vague payment terms with no effective late-payment mechanisms;
lack of clarity on who owns the intellectual property in the code, design, branding and documentation.

Under Romanian civil law, for example, contracts validly concluded are binding on the parties and produce effects not only in the present, but also for future situations that were not expressly foreseen at the time of signing.Law no. 287/2009 – Civil Code

A generic template that is not adjusted to your project, jurisdiction and risk profile can therefore create obligations you did not intend to assume – or leave critical risks completely uncovered.

2.2. Phase 2 – “Reality hits”: the first contractual crisis

Most entrepreneurs become aware of the need for a proper contractual strategy when something goes wrong:

a client refuses to pay or systematically delays payment, while hiding behind ambiguous clauses or missing acceptance criteria;
a subcontractor reuses code, designs or architectures in other projects, arguing that IP ownership was never clearly assigned;
a business partner or investor exercises veto rights or control rights the founder didn’t realise were built into the contract;
a sudden economic or regulatory change makes the project much more expensive or difficult to execute, but the contract has no workable adjustment mechanism.

In all these scenarios, the problem is not the mere existence of a contract. The problem is the existence of a poorly structured, unbalanced or incomplete contract that doesn’t match the real interests of the business.

2.3. Phase 3 – “Strategic”: contracts as part of the business model

On the other end of the spectrum, a mature IT company treats contracts as a core part of its operating system:

different, well-thought templates for different types of clients (SMBs, enterprise, B2B, B2C, public sector);
clear internal procedures for drafting, negotiating, approving, signing and archiving agreements;
alignment between sales, tech and legal so that commercial promises are accurately reflected in legal clauses;
tailored clauses on IP, confidentiality, data protection and security that reflect the specifics of the IT and SaaS industry and comply with GDPR;Regulation (EU) 2016/679 – GDPR GDPR summary – EUR-Lex
force majeure and hardship/adaptation mechanisms integrated from the start, in line with the Civil Code wording on force majeure and “imprevision” (hardship), to cope with crises.Romanian Civil Code – hardship and force majeure

In this phase, the lawyer is no longer the “firefighter” called when a dispute explodes, but a strategic partner who helps structure more balanced, scalable and resilient relationships.

3. Key clauses in IT contracts: what shouldn’t be missing

3.1. Scope, deliverables and acceptance criteria

In software development, SaaS and other IT services, ambiguity around scope and deliverables is one of the main sources of conflict. A solid contract will clarify:

what exactly is being delivered (source code, binaries, APIs, UI/UX design, documentation, training, support);
project phases (milestones) and timelines;
how testing and acceptance work (acceptance criteria, time windows, bug-fix procedures, re-testing rules);
what happens if the client does not test or respond on time.

Modern software development contract guides explicitly recommend detailed sections on scope of work, deliverables, milestones and acceptance criteria, precisely to avoid “we thought you would also do X” type disputes later on.Index.dev – Software Development Contract Template SoftKraft – Custom Software Development Contract Checklist Fynk – IT & Software Proposal Template

3.2. Intellectual property (IP): who owns the code, design and brand?

In IT, the main asset is often intellectual property. Without clear clauses, there is a “grey zone”: can the client reuse the code in other products? can the vendor reuse generic modules in other projects? who owns the underlying know-how?

Under copyright and IP rules, software source code, designs and other creative outputs can be transferred or licensed, but the wording of your IP clause determines whether you retain ownership, grant a limited licence, or hand over everything.Bestarion – IP in outsourcing Eastern Peak – Software Development Contract & IP Ownership

In practice, an IT contract should at least address:

who owns the source code and object code;
whether the vendor may reuse generic libraries, frameworks or modules;
whether the client receives an exclusive or non-exclusive licence, and on what territory and for what duration;
what happens to IP rights if the project ends early or if there is a dispute;
how IP created by employees is treated compared to IP created by independent contractors or freelancers.

For Romanian businesses, it is also relevant to understand how IP interacts with general civil law rules and corporate law, especially when the IP sits inside a company that may later receive investment or be sold. Internal resources on IP and copyright can help clarify this, such as the article on protecting intellectual property rights and copyright here: Avocat – Dreptul proprietății intelectuale (maglas.ro).

3.3. Confidentiality, NDAs and data protection (GDPR)

Most IT projects involve access to sensitive business information, system architecture and, in many cases, personal data belonging to end-users. Contracts should therefore include:

confidentiality clauses or separate NDAs that define protected information, the duration of confidentiality and the consequences of breaches;IP protection & confidentiality in outsourced product development
data processing clauses aligned with GDPR (roles of controller/processor, technical and organisational security measures, sub-processors, data subject requests, breach notification etc.);Text of GDPR – EUR-Lex
clear rules on subcontractors who access code, infrastructure or personal data.

Failing to address these issues can expose a company both to regulatory sanctions (for example, under GDPR) and to contractual claims from clients in case of data breaches or leaks.

3.4. Payments, deadlines and late-payment mechanisms

Late payments directly affect survival and growth. Research on contract management and SME disputes shows that poor payment terms and weak enforcement mechanisms are a recurring cause of cash-flow crises and litigation for small businesses.Concord – Contract Management Reporting Statistics SBAM – Legal importance of contracts

Payment clauses should specify:

when invoices become due (per milestone, per sprint, monthly, annually);
billing requirements (what documents are needed, when invoices are issued);
late-payment interest and penalties, within the limits allowed by applicable law;
whether the supplier can suspend services if invoices are not paid on time;
price adjustment mechanisms (for example, in case of inflation or regulatory cost increases).

For online services and SaaS, it is also important to align contracts with consumer and e-commerce legislation. In Romania, for instance, Law no. 365/2002 on electronic commerce sets out transparency obligations for service providers operating online.Law no. 365/2002 on electronic commerce

3.5. Force majeure and hardship: managing crises contractually

The COVID-19 pandemic and recent economic shocks have shown how vulnerable long-term contracts can be to external events: supply-chain disruptions, travel restrictions, sanctions, changes in tax or labour rules. Legal literature and comparative studies on COVID-19 have stressed the importance of force majeure and hardship clauses in commercial contracts, especially for long-term cooperation.COVID-19 and force majeure – SCU Journal of International Law

Under the Romanian Civil Code, for example:

force majeure is defined as an external, unforeseeable and absolutely irresistible event, which can exonerate liability in certain conditions;
hardship (imprevision) allows a party, in exceptional circumstances, to ask the court to adapt or terminate the contract if performance has become excessively onerous compared to what could reasonably have been foreseen at the time of signing.Civil Code – hardship & force majeure provisions

These mechanisms do not apply automatically; they must be carefully integrated into contract wording and backed by evidence and documentation if a dispute arises.

3.6. Governing law, jurisdiction and dispute resolution

IT start-ups often work with foreign clients. In cross-border projects, the clauses on:

governing law (Romanian law vs another country’s law);
forum (national courts vs arbitration, and in which country);
language of the contract and of dispute proceedings;

can dramatically change the cost and complexity of resolving a dispute. Litigation abroad, under unfamiliar law and in a foreign language, can be prohibitive for a small company. That is why many contract drafting guides insist on negotiating governing-law and jurisdiction clauses explicitly, rather than treating them as “standard boilerplate”.LegalVision – Why written contracts matter for disputes

4. Contract strategy by growth stage: what to focus on and when

4.1. Early stage (MVP, first clients)

At this point the main goal is not to over-burden the business with bureaucracy, but to avoid avoidable risks. In practice you need:

a solid but lean template for IT services / development that is compatible with applicable law and your typical business model;Contracts for startups – overview
clear NDAs with collaborators, advisors and partners who see code, roadmaps or business-critical information;
basic but robust clauses on IP ownership and payment terms;
a simple internal rule such as: “no work starts and nothing is delivered without at least a signed order form and a written acceptance of terms.”

4.2. Scale-up phase: standardisation and contract portfolio management

As the company grows, the challenge becomes volume and consistency. The same WorldCC and Deloitte data suggest that, without proper governance, contract value leakage can reach around 8–9% of annual revenue and up to 40% of the theoretical contract value.Loio – Contract Management Statistics Juro – Contract value leakage Sirion – Deloitte study

In this phase, a contractual strategy typically includes:

reviewing and unifying templates used by different teams and legacy deals;
building a “playbook” for negotiation: what can be changed, what is non-negotiable, what alternatives are acceptable;
introducing basic contract management processes (tracking terms, renewals, SLAs, obligations and notices);
keeping templates up to date with legal changes (for example GDPR developments, new digital-services rules, tax changes).

4.3. Investment rounds and strategic partnerships

When investors, exits, share sales or strategic partnerships come into play, the stakes increase. Law no. 31/1990 on companies regulates corporate forms and, among other things, the rights and obligations of shareholders in Romanian companies.Law no. 31/1990 on companies

At this stage, legal work usually includes:

shareholders’ agreements and investment agreements (pre-emption rights, drag-along and tag-along rights, anti-dilution mechanisms, veto rights);
alignment between commercial contracts and what potential investors will see in legal and financial due diligence;
identifying hidden risks in existing contracts – unlimited liability clauses, onerous indemnities, unusual guarantees – that can affect valuation.

Without a consistent contractual strategy, founders risk losing control over key decisions or having to renegotiate under pressure precisely when they need stability to grow.

5. How to work with a lawyer so contracts become strategy, not red tape

Involving a lawyer who understands IT, commercial contracts and IP does not mean handing over all decision-making. It means building a preventive and efficient framework together. In practice, cooperation often follows these steps:

Contract audit – mapping existing agreements (clients, suppliers, contractors, investors) and spotting risk clusters (imbalanced clauses, missing IP protection, missing adaptation mechanisms).
Risk mapping – prioritising contracts based on value, strategic importance and likelihood of conflict.
Template design or re-design – developing a family of templates tailored to your business (for example, one for fixed-price projects, one for T&M, one for support & maintenance).
Negotiation playbook – defining red lines, acceptable fall-back options and internal approval flows so sales teams are not left alone to make legal trade-offs.
Internal procedures – clarifying who can sign what, when legal must be involved, how amendments are approved, and how client communication is documented.

Studies on commercial disputes highlight that a significant proportion of litigation can be avoided when parties invest time upfront in careful drafting and when they document changes and expectations throughout the business relationship.Brunswick – Importance of written contracts Solomon Hollett – Written agreements in business

6. Common mistakes IT entrepreneurs make with contracts

Different companies repeat similar errors. Some of the most frequent patterns include:

Using contracts “translated” or adapted from other jurisdictions without checking their compatibility with local law or EU-level regulation.
Mixing relationship types: freelancers treated like employees or the reverse, without robust IP and confidentiality clauses for each category.
Ignoring adaptation mechanisms: no hardship or price-adjustment clauses, and only very generic force-majeure wording, even in long-term or high-value contracts.
Relying on “contracts by e-mail”: fragmented negotiations across e-mails and messages, with no integrated document that reflects the final, full agreement.
Accepting unlimited liability or disproportionate indemnities compared to the contract’s value and the realistic risk level.
Failure to align contracts with privacy policies, terms of service and GDPR documentation, especially in B2C or platform models.

Many of these risks can be significantly reduced by implementing a basic contractual strategy and involving legal counsel early – not only when a dispute has already escalated.

7. Key takeaway: every legal decision shapes entrepreneurial success

In IT and tech, product, team and go-to-market often get most of the attention. But the way you structure your legal relationships – with clients, suppliers, collaborators and investors – is just as important. Contracts are not “just paperwork”. They are:

tools for protecting intellectual property and competitive advantage;
mechanisms for managing commercial and financial risk;
frameworks for handling crises and unforeseen events;
levers that preserve control over strategic decisions.

From early naivety (“we’ll manage without lawyers”) to a mature contractual strategy, there is a learning curve. Understanding that contracts are part of your business architecture – not an afterthought – greatly increases the chances of building a stable, scalable and investor-ready company.

Core idea: well-designed contracts don’t slow your business down – they give it direction and resilience. From your first NDA to your shareholders’ agreement, each legal decision contributes to – or undermines – your entrepreneurial success.

Frequently Asked Questions (FAQ)

1. Why is it risky to sign “trust-based” contracts without legal input?

Trust is important, but it does not replace clear rules. A superficially drafted contract may contain hidden imbalances or omit key aspects (IP, confidentiality, payments, adaptation in crises). Empirical research and practice both show that a large proportion of commercial disputes are linked to unclear or incomplete contracts, which then translate into higher legal costs and lost revenue.Contract management data – Loio Why written contracts are vital – LegalVision

2. What is the difference between a “decent” contract and a strategically useful one for my IT business?

A “decent” contract simply records that the parties agreed to do something. A strategically useful contract goes further: it translates the business model into precise, balanced clauses, protects IP, allocates risk sensibly, includes adaptation mechanisms (hardship, force majeure), sets out clear acceptance and payment rules, and defines how disputes will be handled. The difference becomes obvious when something goes wrong: the strategic contract gives you options and leverage, rather than only obligations.

3. When should I involve a lawyer in my contract process?

Ideally from the moment you design your standard templates and before signing any high-value or long-term agreement. For small, low-risk deals, a light review may be enough. For enterprise contracts, cross-border projects, investor documents or strategic partnerships, legal review should be a standard step, not a luxury.

4. Why do force majeure and hardship clauses matter in IT contracts?

Tech businesses are exposed to external shocks: economic crises, pandemics, regulatory changes, supply-chain disruptions. Properly drafted force majeure and hardship clauses, aligned with applicable law, can allow a party to suspend performance, renegotiate or even terminate a contract when execution becomes impossible or excessively burdensome due to exceptional events. Without such clauses, you may find yourself legally forced to perform under conditions that could seriously damage your company’s finances.

5. How can I protect my IP when working with freelancers or external development teams?

You need explicit clauses on IP assignment or licensing. Contracts with freelancers, agencies or subcontractors should state clearly that all code, designs and other deliverables created for your project belong to your company, or define the exact scope of the licence you receive (exclusive/non-exclusive, territory, duration). They should also limit the collaborator’s ability to reuse code in competing products and require confidentiality and security measures around your repositories and infrastructure.

6. What if I’ve already signed contracts that now look unfavourable?

The first step is to have those contracts reviewed in detail to identify problematic clauses (for example unlimited liability, broad indemnities, one-sided termination rights or unfavourable governing-law and jurisdiction clauses). Depending on the commercial context, it may be possible to renegotiate – especially if both parties want to continue working together. In more extreme situations, legal mechanisms such as hardship or specific remedies under applicable law may be explored, but this is very fact-specific and should always be done with legal advice.

7. What is the concrete benefit of having a coherent contractual strategy instead of ad-hoc contracts?

Beyond legal comfort, the benefits are tangible: fewer disputes, better protection for IP, more predictable cash-flow (thanks to clear payment terms), easier crisis management, and a more favourable perception from investors. Many due-diligence processes explicitly review contract quality and consistency; a company with robust contracts appears more mature, which can translate into better terms and valuations.

Sources and further reading

Legislation and studies were consulted in their online versions available at the time of writing.