Ahead of Glasgow Tech Week 2026, the city's thriving hardware and deep-tech community will once again be showcasing innovation across pitching, prototyping and scaling. From robotics and quantum computing to advanced sensors and clean energy, Glasgow is at the forefront of developing tangible, physical technologies and the contractual implications of that distinction can be decisive. In our experience advising on intellectual property, technology, media and commercial contracts, as well as corporate and startup matters, a recurring theme is that legal frameworks developed for software or SaaS businesses, which we so easily now associate with all things “tech,” do not translate directly to hardware ventures.
Why hardware and deep-tech supply chains carry different risks
A company whose main offering is software-based procures largely intangible things such as licences, SaaS subscriptions and development services. The core legal concerns are mainly usage rights, data, service levels and who owns the code. In quite stark contrast to this, a hardware or deep-tech business is by its very nature buying physical goods and manufacturing capacity. This results in quite a different layer of risk involving title (who legally owns the goods and when), risk of loss (who bears it if a shipment is damaged or lost), warranties on quality and fitness, delivery timing, and the reliability of component sourcing. One late shipment of chips or a faulty batch can derail an entire product launch - software bugs are rarely that unforgiving. The infamous wedging of the Ever Given across the Suez Canal I think paints this picture quite well. Global trade was halted for six days, blocking over 400 waiting vessels costing billions. You can hardly get your whizz kid tech support to dial remotely to fix such a problem.
What should a hardware supply contract cover?
Basic considerations like the price and term are obviously essential. It is also important to pin down and explicitly agree such issues as product specifications, quality standards, inspection and acceptance rights, lead times, and clear remedies if goods fail to conform. Your contract has to work in the bad times as much as it works in the good times. If there is a risk that something might happen (maybe a supplier discontinuing a part) then your contract should be agile enough to deal with such eventualities. Murphy’s law… right?
The important thing about due diligence/ supplier vetting is to know who you are getting into bed with before you become dependent on a supplier. Make sure you’ve scrutinised issues such as financial stability, ethical and regulatory compliance, and capacity within your contractors and suppliers. If they are going to go down, you don’t want to be dragged down with them.
Protecting IP in deep-tech partnerships
Deep-tech innovation often involves collaborating with partners who help design or build your product. So it is important to be explicit about who owns what and when. Without clear drafting, a manufacturer or developer may acquire rights you assumed were yours.
We can see these issues arising often in Proof of concept (POC) arrangements, where a potential customer or partner wants to test your technology before committing to a full commercial relationship. It is tempting to treat POCs as informal or preliminary, but Intellectual Property (IP) ownership should be addressed from the outset. Clarify who owns any IP created during the POC phase, how pre-existing IP (background IP) brought by each party will be treated, and what happens to newly developed IP (foreground IP) when the POC concludes — whether that leads to a full commercial arrangement or the parties go their separate ways. A well-drafted POC agreement will also specify any licences required to use background IP during the trial and confirm that each party retains ownership of what it brought to the table.
Building a resilient hardware supply chain
In order to build a resilient framework you need to be awake to the realities of operating in the physical world where worst-case scenarios can happen at scale. So make sure you have done your homework on those businesses you are looking to help grow your company. Clarify your terms, diversify your supply chain and lock down your IP from day one. If Glasgow Tech Week sparks your next big idea, make sure your supply chain is ready to deliver it.
We will be at Glasgow Tech Week’s “What VCs Won’t Tell You: Building Deeptech Companies That Scale” on Wednesday 10 September at Barclays Eagle Labs so please do say hello if you also plan on being there!
