Acceptance Testing in Information Technology Contracts

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Table of Contents

• What is ‘Acceptance Testing’? 
• Why is Acceptance Testing Important? 
• Key Contract Considerations
• Decide What You Are Willing to Accept
• Key Takeaways
• Frequently Asked Questions

If you want to ensure that an IT product you are purchasing is up to scratch, you can use acceptance testing. The type of testing you should use will depend on your circumstances. This article looks at what acceptance testing is, why it is important and what to look out for in your IT development contracts. 

What is ‘Acceptance Testing’? 

Acceptance testing is testing used to determine the acceptability of a product based on the agreement between the parties. 

Generally, if a product is found not to be acceptable, the customer has a right to ask the developer or seller to repair or modify the product so that it is satisfactory. 

Types of Acceptance Testing

There are lots of different types of testing which focus on various issues, including: 

• user acceptance testing. This is testing by you, the end-user, to determine whether the product works and does what was agreed without faults or issues. The purpose of these tests is to replicate the intended use of the product. This will verify that it is fully functional and complies with the agreed specifications;    
• business acceptance testing. This is testing to see whether the product will meet the business’ needs; 
• contract acceptance testing. This as the name suggests, is testing to ensure that a product meets all of the requirements in a contract; 
• regulation acceptance testing. This is testing to ensure the product meets certain regulatory requirements. This kind of testing may check whether certain safety features or quality controls meet the mandated government specifications; and
• operational acceptance testing. This is testing to determine operational readiness. It might include testing recovery, reliability and technical support availability.
  

There is also:

• alpha testing, which is testing by the developer to identify all possible bugs and issues before the release of the final product to the customer; and
• beta testing, which is testing performed by real users in a real environment. This is considered a form of user acceptance testing, and it enables developers to collect direct feedback from customers. This is very valuable.

Why is Acceptance Testing Important? 

When you buy an item of office furniture you can see straight out of the box that it is the wrong item or the wrong colour. It can be hard to tell whether an IT product (such as software) does what it says on the tin and is fit for purpose. Acceptance testing is a way to get some certainty around this. 

How important testing is, and how involved the testing should be, depends on how business critical the IT product is. You should keep in mind that a poorly functioning system can be expensive to fix. Make sure you consider the costs of downtime. It can also affect your reputation with customers and can get you into trouble with the regulators. This often occurs where it causes gaps in information, deficient records etc.  

Key Contract Considerations

If acceptance testing is important in relation to an IT product purchase, an acceptance testing clause must be clearly set out in your contract. This clause will outline what testing needs to take place and how it will occur. Below are some points to keep in mind at the contract negotiation stage: 

Your Needs and Concerns

Your needs and concerns will drive what should be tested and how. If you are concerned about: 

• the technical specifications of the product, for example, how fast it processes data. Then, it may make more sense to agree in advance on the tests that they need to run and provide performance reports on;  
• how secure the product is. Then, you might want to include a requirement in the contract that the supplier ensures the product is tested by an independent and qualified security specialist. We recommend as a  requirement they provide you with the report produced as a part of this testing; or
• how the product looks and feels and whether it has all of the agreed features. Then, end-user or beta testing will be most appropriate, as you will be the best person to confirm this.

You will want to make sure that the type of testing, who does the testing and the process for testing, reflects your needs and takes into account your concerns. 

What Happens if Acceptance Testing Fails?

Do you want a right to repairs or modifications? Do you want to be able to reject the product entirely or to reject it if the issue can not be fixed? Which option or combination of the two is better will depend on your circumstances. It may also depend on the product, the kind of defect and the severity of the defect. 

Time Sensitivity 

If time is important to you, ensure there are clear timeframes in your acceptance testing clause. The clause should set out when the product should be ready for testing, how long they have to do the testing and where they are doing the testing. It should also state how long they have to fix any issues and conduct subsequent testing. 

Quality of The Scope And Specifications

Acceptance testing, by its very nature, is testing against an agreed standard. As a result, your scope and specifications must be complete and sufficiently detailed. 

You must set out in the contract any particular use or specific features you had in mind. This will allow acceptance testing to pick up that they are not there or not performing as intended. We recommend including a combination of specific and outcome focussed requirements to ensure that the product meets your expectations. 

Naturally, where you are buying something off the shelf, you may not have a say as to the specifications. Instead, the testing will be more focussed on ensuring that the product meets the provided specifications and representations made to you. Wherever possible, you should get these in writing and make certain they form part of the contract.

Decide What You Are Willing to Accept

Sometimes the benefit of acceptance testing is in knowing that there is a defect and what it is. That way, you can decide what to do about it. 

Alternatively, knowing a defect exists and what it is may give you the leverage to negotiate a price discount. 

Key Takeaways

Acceptance testing can seem daunting as there is a lot of technical jargon that goes with the territory. Therefore, we recommend having a think about your needs and your key concerns. Let this be the focus of any testing contract requirements. 

Acceptance testing clauses are often undervalued and can have a huge impact on the success of your business. If you have any questions or would like to know more about how acceptance testing works or what should be included in your contract, please get in contact with LegalVision’s information and technology lawyers on 1300 544 755 or fill out the form on this page. 

Frequently Asked Questions