Business Terms & Conditions

1. Agreement Overview

These Terms and Conditions ("Agreement") govern your use of services provided by CAAQIT ("Company," "we," "us," or "our"). By engaging our services, you ("Client," "you," or "your") agree to be bound by these terms.

1.1 Scope of Services

• Custom AI solution development with fixed-price model
• Machine Learning model development and initial training
• Subscription-based software access and long-term rental
• Usage-based AI services (API calls, model inference)
• Digital transformation consulting
• Web development and cloud solutions
• Ongoing technical support and maintenance

2. Service Delivery and Timeline

2.1 Project Timeline

• Timelines are estimates based on project scope and requirements
• Delays due to client feedback, scope changes, or external dependencies may extend delivery
• We will notify clients promptly of any anticipated delays
• Force majeure events may affect delivery schedules

2.2 Project Phases

1. Discovery & Planning: Requirements gathering and project scoping
2. Development: Implementation according to approved specifications
3. Testing: Quality assurance and user acceptance testing
4. Deployment: Live implementation and go-live support
5. Support: Post-launch maintenance and support (if contracted)

2.3 Client Responsibilities

• Provide timely feedback and approvals
• Supply necessary content, data, and access credentials
• Participate in testing and acceptance procedures
• Ensure adequate infrastructure for deployment

3. Payment Terms

3.1 Payment Schedule

• Development Phase: Fixed price for custom AI solution development and initial ML model training
• Project Deposit: 75% upfront payment before project commencement
• Milestone Payments: As defined in project agreement for development phases
• Final Development Payment: Due upon project completion and delivery
• Subscription Services: Monthly payments based on usage (API calls, model usage) and support
• Long-term Software Rental: Subscription-based access to software solutions

3.2 Payment Methods

• Card payments via PayHere.lk
• Bank transfers (local and international)

3.3 Late Payments

• Grace Period: 5 business days after due date
• No Late Fees: We do not charge interest or late fees on overdue payments
• Service Suspension: Services may be suspended after 15 days overdue
• Account Cancellation: Accounts will be cancelled after 1 month of overdue payment
• Collection: Legal action may be taken for severely overdue accounts

3.4 Disputes

• Payment disputes must be raised within 30 days of invoice
• Undisputed portions of invoices remain payable
• We will work collaboratively to resolve billing disputes

4. Intellectual Property Rights

4.1 Custom AI Development

• Development Deliverables: Custom AI solutions become client's intangible assets upon completion and payment
• Service Delivery: Ongoing access provided via web-based subscription platform
• Usage Rights: Client receives perpetual usage rights to developed AI solution
• No Source Code: Source code is not provided; all solutions are accessed via web-based platform
• Subscription Access: Long-term software rental via subscription model
• No Physical Assets: All solutions are cloud-based digital services
• Third-Party Components: Subject to original licensing terms
• CAAQIT Frameworks: Core AI tools and frameworks remain our proprietary assets

4.2 Subscription Software Services

• Right of Use: Subscription provides right to use software, not ownership transfer
• Usage-Based Billing: Monthly charges based on API calls, model usage, and support level
• Continuous Updates: Software improvements and security updates included
• Data Processing: Client retains ownership of data processed through our AI models
• No Source Code Access: All software accessed through web interface; source code remains proprietary

4.3 Licensed Software

• Software licenses granted according to specific license agreements
• Client receives usage rights, not ownership
• Restrictions on modification, redistribution, or reverse engineering
• Source Code Restrictions: No access to source code under any circumstances

4.4 Confidential Information

• Both parties agree to maintain confidentiality of proprietary information
• Non-disclosure obligations survive contract termination
• Client data and business information kept strictly confidential

5. Warranties and Disclaimers

5.1 Service Warranties

• Professional Standards: Services performed with professional skill and care
• Functionality: Software will perform according to documented specifications
• Bug Fixes: 90-day warranty on defects in custom-developed software

5.2 Disclaimers

• Third-Party Services: No warranty for third-party integrations or services
• Performance: No guarantee of specific business outcomes or ROI
• Compatibility: Client responsible for adequate internet connectivity
• Web Service Access: Service availability subject to internet connectivity and browser compatibility

5.3 Limitation of Liability

Our liability is limited to the total amount paid by client for the specific service. We are not liable for:

• Indirect, consequential, or punitive damages
• Loss of profits, revenue, or business opportunities
• Data loss or corruption (client responsible for backups)
• Third-party claims or damages

6. Data Protection and Security

6.1 Data Handling

• Client data processed according to our Privacy Policy
• Industry-standard security measures implemented
• Regular security audits and updates
• Compliance with applicable data protection laws
• Web Service Security: We maintain security and backups for all web-based services

6.2 Client Responsibilities

• Ensure legal basis for data processing
• Provide accurate and complete data for service delivery
• Notify us of any specific data security requirements
• Comply with applicable privacy laws

7. Project Changes and Scope

7.1 Change Requests

• All scope changes must be documented and approved in writing
• Additional work charged at agreed hourly rates
• Timeline adjustments may be necessary for scope changes
• No unauthorized work will be performed

7.2 Project Cancellation

• By Client: 30-day written notice required
• Work Completed: Payment due for all completed work
• Refunds: According to our Return Policy
• Deliverables: Client receives work completed to date

8. Support and Maintenance

8.1 Included Support

• Bug Fixes: 90 days of bug fixes for custom development
• Documentation: User manuals and technical documentation
• Knowledge Transfer: Training sessions as specified in project scope

8.2 Ongoing Support (Optional)

• Maintenance Plans: Available for ongoing support and updates
• SLA Options: Different service levels available
• Emergency Support: Available with premium support plans
• Updates: Software updates and security patches

9. Termination

9.1 Termination by Either Party

• 30-day written notice for ongoing services
• Immediate termination for material breach
• Payment obligations survive termination
• Confidentiality obligations continue indefinitely

9.2 Effect of Termination

• Client receives all work completed to termination date
• Final invoice for completed work and expenses
• Return or destruction of confidential information
• Transition assistance (if contracted)

10. Force Majeure

Neither party will be liable for delays or failures due to circumstances beyond reasonable control, including:

• Natural disasters, pandemics, or acts of God
• Government actions, regulations, or sanctions
• Internet outages, cyber attacks, or infrastructure failures
• Labor disputes, strikes, or supplier failures

11. Dispute Resolution

11.1 Resolution Process

1. Direct Discussion: Good faith effort to resolve informally
2. Mediation: Binding mediation if direct discussion fails
3. Arbitration: Final binding arbitration in Sri Lanka
4. Governing Law: Laws of Sri Lanka

11.2 Jurisdiction

• Disputes subject to jurisdiction of Sri Lankan courts
• Alternative dispute resolution preferred
• Legal proceedings in Colombo, Sri Lanka

12. General Provisions

12.1 Entire Agreement

These terms, together with project-specific agreements, constitute the entire agreement between parties.

12.2 Modifications

Changes to these terms must be in writing and signed by both parties.

12.3 Severability

If any provision is found invalid, the remainder of the agreement remains in effect.

12.4 Assignment

Neither party may assign this agreement without written consent of the other party.

13. Contact Information

14. Accounting Standards Compliance (LFRS/LKAS)

14.1 Revenue Recognition (LFRS 15)

Performance Obligations:

• Custom AI Development: Distinct performance obligation completed upon delivery of functional AI solution
• ML Model Training: Initial training constitutes separate performance obligation fulfilled upon model deployment
• Ongoing Software Access: Subscription-based access represents continuous performance obligation over contract term
• Usage-Based Services: API calls and model usage recognized as services are consumed
• Support Services: Technical support represents separate ongoing performance obligation

Revenue Recognition Timing:

• Development Revenue: Recognized upon completion and client acceptance of custom AI solution
• Subscription Revenue: Recognized ratably over the subscription period
• Usage Revenue: Recognized as usage occurs (per API call, per model inference)
• Support Revenue: Recognized ratably over support period

14.2 Software Asset Classification

• No Physical Assets: All software solutions are cloud-based digital services
• Intangible Assets: Custom AI solutions developed become client's intangible assets upon completion
• Subscription Access: Long-term software rental provides usage rights, not asset ownership
• Intellectual Property: Core AI frameworks and tools remain CAAQIT proprietary assets

14.3 Lease Considerations (LFRS 16)

Software Rental Model:

• Right of Use: Subscription provides right to use software, not ownership transfer
• Control Assessment: Client controls use of software during subscription period
• Lease Classification: Software subscriptions may qualify as operating leases under LFRS 16
• Lease Term: Initial subscription period plus reasonably certain renewal options

Risk and Rewards Transfer:

Concept Explanation: Risk and rewards transfer refers to when the client assumes the majority of risks (obsolescence, performance) and rewards (benefits, value) of asset ownership.

• Development Projects: Risks and rewards transfer upon client acceptance and go-live
• Subscription Services: CAAQIT retains technology risks; client receives usage benefits
• Performance Risk: Client assumes business performance risk; CAAQIT retains technical performance obligation
• Obsolescence Risk: CAAQIT retains technology obsolescence risk through ongoing updates
• Usage Benefits: Client receives full economic benefits from software usage during subscription

14.4 Contract Modifications

• Scope Changes: Additional development work treated as separate contract if distinct
• Subscription Changes: Usage tier changes modify existing contract performance obligations
• Support Upgrades: Enhanced support levels constitute contract modifications

14.5 LKAS/SLFRS Compliance

• Financial Reporting: All transactions recorded in accordance with Sri Lankan Accounting Standards
• Revenue Recognition: SLFRS 15 principles applied to all service contracts
• Lease Accounting: SLFRS 16 applied where software subscriptions meet lease definition
• Related Party Transactions: Disclosed according to LKAS 24 if applicable
• Fair Value Measurement: SLFRS 13 applied for contract asset/liability valuation

15. Acknowledgment

By engaging our services, you acknowledge that you have read, understood, and agree to be bound by these Terms and Conditions. These terms are effective as of the date of your first service engagement with CAAQIT.