Pilot or proof of concept agreement

A pilot is a contract to find out whether there should be a contract, and it goes wrong when neither side wrote down what success looks like, what the customer's data is doing on the supplier's systems, and who owns what was built to make the pilot work. The agreement has to define the scope and the criteria, set the period and any fee, contain the data protection terms that apply from day one, deal with IP and feedback, say that the customer is not obliged to proceed, and set the route to a full contract if it does. I draft that agreement for a fixed fee of £995, delivered in five working days.

Who this is for

Software businesses in England and Wales running pilots, proofs of concept or evaluations of their product with prospective customers, particularly enterprise and public sector prospects that want a written agreement before any data is shared.

What matters in a pilot agreement

Scope, success criteria and the customer's part

The agreement should state what the pilot covers (the modules, the use case, the number of users, the sites), the success criteria and how they are measured, who decides whether they are met and when, and what the customer must do: provide data, users, access, a sponsor and decisions by stated dates. A pilot without criteria ends in a debate about whether it worked, and a pilot without customer obligations ends because the customer never started.

Duration, extension and fees

The pilot should have a fixed period with a stated extension mechanism, and the agreement should say whether it is free, paid at a pilot rate, or paid with the fee credited against a full subscription, because a free pilot is a cost the supplier will want to cap and a paid pilot is a contract for services under the Supply of Goods and Services Act 1982 with the obligations that go with it. Either party should be able to end the pilot early on short notice.

Data, security and the processor terms

Where the customer loads personal data into the pilot, the supplier is a processor from the first upload and the agreement must contain the terms Article 28 of the UK GDPR requires, with security under Article 32 and deletion at the end, and the customer should warrant that it may share the data for the purpose. Many pilots are better run on anonymised or synthetic data, and the agreement can require it. Confidentiality should cover the customer's data and the supplier's product and pricing in both directions.

Intellectual property in the product, the outputs and feedback

The product and everything the supplier builds during the pilot, including configurations and integrations, should remain the supplier's under the Copyright, Designs and Patents Act 1988, with the customer's data remaining the customer's; feedback the customer gives should be licensed to the supplier to use freely, and any outputs generated for the customer should be defined and their ownership stated. An agreement that is silent leaves the customer arguing that the connector built for it is its property.

No obligation to proceed, and how conversion works

The agreement should say that neither party is obliged to enter into a full contract, that the pilot creates no exclusivity, and that if the customer proceeds it will do so on the supplier's master agreement or terms of service, attached or referred to, with pilot fees credited if agreed. Where the customer is a public body, the pilot must not be drafted as a route around its procurement obligations under the Procurement Act 2023, and the agreement should say that any full contract is subject to them.

Liability, warranties and termination

The supplier's liability during a pilot should be capped at the pilot fee or a stated sum where the pilot is free, with consequential loss excluded and a warranty limited to reasonable care and skill, tested for reasonableness under section 11 of the Unfair Contract Terms Act 1977; the customer is a business, so consumer rules do not apply. On termination or expiry, access ends, data is exported and deleted, and confidentiality survives. Third-party rights are excluded under the Contracts (Rights of Third Parties) Act 1999.

What it costs

SaaS terms of service, £995. Your standard customer-facing terms. Five working days.

Buying online forms the engagement on payment. The scope is what the saas and technology contracts page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A bespoke contract drafted for how your product is sold, delivered and supported
• Service levels you can meet, with remedies that are proportionate rather than aspirational
• A liability position that is defensible and will survive enterprise procurement
• IP and data provisions that fit together rather than contradicting each other
• A commercial note on where you will get pushback and what is worth conceding
• One round of amendments

What is not included

• Negotiating individual enterprise deals, which I quote separately
• Advice on the law of jurisdictions outside England and Wales
• Technical security certification or audit
• Regulatory advice for regulated sectors such as financial services or health

Questions I am often asked

The prospect wants the pilot for free but with full service levels. Is that reasonable?

Service levels belong in a paid contract. A free pilot can promise reasonable care and skill and best efforts on availability, and the agreement says so; if the prospect needs service levels, the pilot should be paid.

We built an integration during the pilot. Who owns it?

The supplier, if the agreement says so, which it does. The customer keeps its data and receives a licence to use the integration if it proceeds; without a clause, the argument is open.

Can a public sector pilot lead straight to a contract?

Only within the body's procurement rules. The agreement says that any full contract is subject to them, which protects the supplier from a pilot the body later cannot convert.

Related guidance and services

• SaaS and technology contracts, £995, the service this page describes
• Contract review, £495
• Data protection agreements and privacy terms, £795
• Beta testing terms
• Free trial terms for a SaaS product

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.