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What You Need to Know: Software Development Agreements

Monday, March 24, 2014/Categories: computer-programmers

Congratulations!  You’ve been chosen to do a software development project, and you’re almost ready to get started. But before you jump in, you need both your and your client’s signatures on a contract that clearly defines all aspects of the project.

A good software development agreement governs the relationship between you – the custom software developer – and your client. It also protects your intellectual property rights when you are hired to develop software and applications on behalf of a client, and sets the terms of use, price and payment for your work.

Your contract will be a good document to fall back on if things don’t go quite as planned. Your software development agreement can clearly state that if your client should terminate the agreement, you have the right to collect payment for work performed to date. It can also limit warranties and guarantees related to your work, and cap your total liability should anything go wrong.

A good software development agreement will often also have wording that prevents your client from hiring your employees away from your firm.

New Project, New Contract

You need a new contract every time you develop and implement new software and applications projects for a client. A great starting point is to buy a high-quality software development contract template, and then customize it again and again with the specifics for each new project.  If you need a highly customized agreement, you can save a lot on attorney's fees by having a basic contract as a starting point.

To save money over the long-term, many software developers invest in template software development agreements that come packaged with other handy legal documents. These may include templates for custom software maintenance and support agreements, employment contracts, software customization agreements, and subcontractor/independent contractor agreements.

Template software packages often include convenient contract examples and samples, and your software license ensures unlimited use of all components.

What a Quality Software Development Contract Often Includes

To help you clearly define the scope of services you’ll perform for your client, you probably want a software development contract that includes a statement of work template. This portion of the contract will clearly define exactly what this project will involve, and establishes each party’s rights and responsibilities under the agreement. It can also cover the project background and scope, key tasks and milestones, deliverables, price and payment, organization and personnel requirements, expenses, and any supporting documentation.

Your software development contract template may also cover term and termination, ownership of intellectual property, confidential information, warranty and disclaimer, limitation of liability and indemnification and relation of parties. Other necessary clauses may include non-assignment, arbitration, attorneys’ fees, severability, force majeure, and waiver and modification.

Clear Expectations Make for Happy Customers

Using a contract to define expectations at the outset of a software development project protects your business and gives your client a clear picture of what will be involved in the work. It also gives you a road map to follow if the project scope changes or any part of the project gets off-track.

With your client’s signature on a comprehensive contract, you have peace of mind that both you and your client have a legally binding agreement. And with that protection in place, you’re much more likely to end up with a satisfied client.

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