CHILE Law and Practice Contributed by: Carolina Cabrera, LawTech
Personnel warranties usually cover qualified staff, supervision, key personnel continuity, and supplier responsibility for employees, subcontractors and affili - ates. On-site or staff augmentation arrangements may also cover labour, health and safety, access, confiden - tiality and customer policies. IP warranties are important in software and technol - ogy services. Suppliers are expected to warrant that they have sufficient rights to provide software, tools, documentation, deliverables and services, and that authorised use will not infringe third-party IP rights, subject to common supplier exclusions. Security, data and confidentiality warranties are increasingly central. Customers expect reasonable technical and organisational measures, no intentional malware or backdoors, confidentiality controls, data processing only under instructions, breach assistance, subprocessor control, deletion or return of data, and continuity or support commitments for SaaS, cloud and managed services. 4.4 Agile Methodology Agile methodology is increasingly used in Chilean IT projects, particularly in software development, plat - form implementation, systems integration, cloud migration, data analytics and AI-related projects. It is most useful where the customer does not have a fully fixed specification at the outset and the project requires iterative design, testing, feedback and adjust - ment. In practice, many contracts are not purely agile. Sophisticated projects usually combine agile deliv - ery with more traditional contractual structures, such as master services agreements, statements of work, governance committees, project plans, budget limits, service levels, acceptance criteria, change control and milestone or sprint-based payments. This hybrid approach preserves flexibility while giving legal cer - tainty on scope, price, responsibility and deliverables. Key drafting points include the agile framework, party roles, backlog, sprint planning, sprint duration, demos, testing, acceptance and escalation. Cus - tomer responsibilities are also important: appointing a product owner, prioritising the backlog, providing
timely feedback, making users available and approv - ing deliverables. Pricing is usually time-and-materials, capacity-based or sprint-based, sometimes combined with caps, tar - get prices, milestones or hybrid models. Acceptance is also adapted: rather than one final acceptance, con - tracts may include acceptance by sprint, user story, release, module or minimum viable product. For regulated or public-sector customers, agile requires more discipline around documentation, audit - ability, security, continuity, change management and procurement rules. Overall, agile contracting is pre - sent in Chile, but usually in a controlled hybrid form. The main legal challenge is to allow iteration with - out losing certainty on governance, IP, data, security, change control and termination. 4.5 Payment Models Payment models for IT services in Chile vary according to the type of service, project maturity, scope uncer - tainty, procurement rules and whether the service is software, SaaS, cloud, outsourcing, implementation, support or consulting. Hybrid models are common. Fixed-price models are used where scope, delivera - bles, timeline and acceptance criteria are sufficiently clear, such as defined implementation phases, migra - tions, integrations or discrete software developments. Suppliers usually require assumptions, exclusions, change control and customer-dependency clauses. Time-and-materials models are common in consult - ing, agile projects, support, troubleshooting, cyberse - curity, data analytics and evolving projects. They usu - ally include hourly or daily rates, rate cards, estimated budgets, monthly invoicing, approval workflows and sometimes caps or not-to-exceed amounts. Milestone payments are frequent in implementation and development projects, with payment linked to modules, testing, acceptance, go-live, migration, sta - bilisation or handover. Subscription and recurring fees are typical for SaaS, cloud, software maintenance, support and managed services. Usage-based pric - ing is increasingly relevant for cloud, APIs, AI tools, analytics and infrastructure services.
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