Terms & Conditions of Business

1. Introduction and Scope

These Terms and Conditions ("Terms") govern the provision of software development, consulting, and systems architecture services by Aethonix Ltd ("Aethonix," "we," "us"), a company registered in England and Wales, to the entity engaging our services ("Client," "you").

1.1 Service Area Business

Aethonix operates as a Service Area Business specializing in technical architecture for the North of England. While we operate remotely, our legal domicile and jurisdiction remain within the United Kingdom.

1.2 Nature of Services

We provide specialized software architecture, database consulting, and AI integration services. We do not provide generalist web design or "brochureware" services. Our services are technical in nature and intended for business use.

2. Intellectual Property Rights (The "Mutual Freedom" Model)

2.1 Definitions

• "Background IP" means all Intellectual Property Rights owned by Aethonix prior to the Effective Date, including but not limited to code libraries, frameworks, developer tools, algorithms, generic SQL schemas, and architectural patterns, and any improvements thereto developed during the term of this Agreement that are not specific to the Client’s business logic.
• "Foreground IP" means the Intellectual Property Rights in the specific code, user interfaces, and deliverables created specifically for the Client under this Agreement, excluding Background IP.
• "AI Outputs" means the text, code, images, or other content generated by Artificial Intelligence models via the Services.

2.2 Assignment of Foreground IP

Upon full payment of all Fees due, Aethonix hereby assigns to the Client, with full title guarantee, all Intellectual Property Rights in the Foreground IP. This assignment explicitly excludes Background IP and Third-Party IP (including Foundation Models).

2.3 License Back to Aethonix (The "Freedom to Innovate" Clause)

In consideration of the assignment in Clause 2.2, the Client hereby grants to Aethonix a perpetual, irrevocable, worldwide, royalty-free, non-exclusive license to use, reproduce, modify, display, and create derivative works of the Foreground IP for the purposes of: (i) providing services to the Client; (ii) Aethonix’s internal research and development; and (iii) incorporating generic coding structures, algorithms, and architectural patterns derived from the Foreground IP into Aethonix’s Background IP library for future commercial use, provided that such use does not disclose the Client’s Confidential Information or replicate the unique "look and feel" of the Client’s product.

2.4 Retention of Background IP

Aethonix retains all right, title, and interest in the Background IP. Aethonix grants the Client a perpetual, non-exclusive, royalty-free, non-transferable (except in connection with a sale of the Client’s business) license to use the Background IP solely as integrated into the Deliverables for the Client’s internal business operations.

2.5 Residuals

Nothing in this Agreement shall preclude Aethonix or its personnel from using any general knowledge, skills, ideas, concepts, know-how, or techniques ("Residuals") retained in their unaided memory related to the Services, provided that Aethonix does not breach its confidentiality obligations.

2.6 Rejection of Joint Ownership

The Parties explicitly agree that no Intellectual Property created under this Agreement shall be held in "joint ownership" or as "tenants in common." Any rights not expressly assigned to the Client are reserved by Aethonix.

3. Artificial Intelligence and API Usage

3.1 Third-Party Providers

The Services may integrate APIs from third-party AI providers, including but not limited to OpenAI, L.L.C. and Anthropic, PBC ("AI Providers"). The Client acknowledges that the use of these features is subject to the AI Providers’ respective Terms of Service and Usage Policies. Aethonix passes through these obligations to the Client.

3.2 Ownership of AI Outputs

As between Aethonix and the Client, the Client owns all rights, title, and interest in the AI Outputs to the extent permitted by applicable law and the terms of the AI Providers. Aethonix makes no representation regarding the copyrightability of AI Outputs.

3.3 Compliance with EU AI Act (Article 50 Transparency)

If the Client deploys the Deliverables within the European Union or to EU citizens, or if UK law aligns with EU standards:

• (a) Machine-Readable Marking: The Client acknowledges that AI Outputs may contain machine-readable metadata (e.g., C2PA credentials) indicating their artificial origin. The Client agrees not to remove, alter, or obfuscate such markings.
• (b) Human Interaction Disclosure: If the Deliverables involve a chatbot or conversational agent, the Client must ensure the interface prominently informs natural persons that they are interacting with an AI system.
• (c) Synthetic Media/Deepfakes: If the Deliverables generate synthetic audio, image, or video content resembling real persons ("Deepfakes"), the Client must clearly disclose the artificial nature of the content to the viewer.

3.4 Prohibited Uses

The Client shall not use the AI Services to: (i) generate content for high-risk decision-making (e.g., credit scoring, medical diagnosis) without human oversight; (ii) train other AI models using the AI Outputs; or (iii) reverse engineer the AI models.

4. Liability and Disclaimers (The "Hallucination" Defense)

4.1 General Disclaimer

EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SERVICES ARE PROVIDED "AS IS." AETHONIX DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

4.2 AI Hallucination and Accuracy Disclaimer

THE CLIENT ACKNOWLEDGES THAT ARTIFICIAL INTELLIGENCE SYSTEMS ARE PROBABILISTIC AND MAY GENERATE OUTPUTS THAT ARE INACCURATE, INCOMPLETE, OFFENSIVE, OR MISLEADING ("HALLUCINATIONS"). AETHONIX DOES NOT WARRANT THE ACCURACY OR RELIABILITY OF ANY AI OUTPUTS. THE CLIENT AGREES THAT IT IS SOLELY RESPONSIBLE FOR VERIFYING ALL AI OUTPUTS BEFORE RELYING ON THEM FOR ANY BUSINESS, LEGAL, OR MEDICAL PURPOSE. AETHONIX SHALL NOT BE LIABLE FOR ANY LOSS OR DAMAGE ARISING FROM THE CLIENT’S RELIANCE ON UNVERIFIED AI OUTPUTS.

4.3 Human-in-the-Loop

The Client agrees to maintain a "Human-in-the-Loop" workflow for any critical business processes involving the Deliverables. Failure to do so constitutes a material breach of the Client’s duty to mitigate loss.

4.4 Limitation of Liability

Subject to Clause 4.5 (UCTA Compliance), Aethonix’s total liability under this Agreement shall not exceed the total Fees paid by the Client in the twelve (12) months preceding the claim.

4.5 UCTA Compliance

Nothing in this Agreement excludes or limits liability for death or personal injury caused by negligence, fraud, or fraudulent misrepresentation, as prohibited by the Unfair Contract Terms Act 1977.

5. Data Protection (UK GDPR)

The Parties agree to comply with the terms set out in the Privacy Policy and Data Processing Addendum (DPA), which are incorporated by reference.