Software development agreement

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  (2 Reviews)

An agreement governing the production of software by a developer for a client.


Author: Alasdair Taylor
Updated: 11 January 2021
Length: 13 pages (min.)
Notes: 14 pages (min.)
Format: MS Word (.DOCX)

Under this software development agreement, the developer agrees to create software on behalf of the customer, and to assign (ie transfer) some or all of the rights in that software to the customer. The agreement allows for the incorporation of third party materials into the software, and the premium version also includes licensing provisions relating to framework software used by the developer.

Basic agreement

The basic version of this agreement contains all those terms and conditions you might expect to find in any software development contract, but few bells and whistles. The core clauses cover the manner in which the development services will be provided, the transfer of intellectual property rights, licensing of rights in third party works, charges, payment terms and software-specific warranties. Standard short-form boilerplate clauses are also included.

Standard agreement

The standard version of the agreement includes everything in the basic version, plus provisions covering the following matters:

  • set-up services;
  • developer access to the customer's computers/networks;
  • acceptance testing of the software by the customer;
  • the protection of confidential information disclosed by the parties;
  • indemnity protection, for one or both parties;
  • time recording;
  • recovery of the developer's travel etc expenses; and
  • special acknowledgements relating to bugs, security, compatibility and legality.

The standard document also includes much more detailed and flexible boilerplate provisions.

Premium agreement

Again, the premium agreement contains all the terms and conditions that are in the standard agreement, with the following additions:

  • a short clause dealing with ongoing (ie post-delivery/acceptance) development services;
  • provision for customer-supplied materials to be incorporated into the software;
  • licensing provisions for framework software owned and used by the developer;
  • a formal change control procedure;
  • detailed data protection provisions;
  • a software escrow clause;
  • clauses covering project management and party representatives;
  • publicity rights and restrictions;
  • a clause prohibiting the soliciting of personnel; and
  • export law restrictions.

The contents of the software development agremeent depend upon the version that you purchase.

Basic software development agreement

  1. Definitions
  2. Term
  3. Development Services
  4. Assignment
  5. Third Party Materials
  6. Customer obligations
  7. Charges
  8. Payments
  9. Warranties
  10. Limitations and exclusions of liability
  11. Force Majeure Event
  12. Termination
  13. Effects of termination
  14. Further assurance
  15. Notices
  16. Subcontracting
  17. General
  18. Interpretation

Schedule 1 - Software development particulars

Standard software development agreement

  1. Definitions
  2. Term
  3. Development Services
  4. Set Up Services
  5. Acceptance procedure
  6. Assignment
  7. Third Party Materials
  8. Customer obligations
  9. Charges
  10. Expenses
  11. Timesheets
  12. Payments
  13. Developer's confidentiality obligations
  14. Customer's confidentiality obligations
  15. Warranties
  16. Acknowledgements and warranty limitations
  17. Indemnities
  18. Limitations and exclusions of liability
  19. Force Majeure Event
  20. Termination
  21. Effects of termination
  22. Further assurance
  23. Notices
  24. Subcontracting
  25. Assignment
  26. No waivers
  27. Severability
  28. Third party rights
  29. Variation
  30. Entire agreement
  31. Law and jurisdiction
  32. Interpretation

Schedule 1 - Software development particulars

Premium software development agreement

  1. Definitions
  2. Term
  3. Development Services
  4. Set Up Services
  5. Acceptance procedure
  6. Assignment
  7. Framework Software
  8. Source Code of Framework Software
  9. Escrow of Source Code of Framework Software
  10. Third Party Materials
  11. Additional Development Services
  12. Customer obligations
  13. Customer Materials
  14. Representatives
  15. Management
  16. Change control
  17. Charges
  18. Expenses
  19. Timesheets
  20. Payments
  21. Developer's confidentiality obligations
  22. Customer's confidentiality obligations
  23. Publicity
  24. Data protection
  25. Warranties
  26. Acknowledgements and warranty limitations
  27. Indemnities
  28. Limitations and exclusions of liability
  29. Force Majeure Event
  30. Termination
  31. Effects of termination
  32. Non-solicitation of personnel
  33. Notices
  34. Further assurance
  35. Subcontracting
  36. Assignment
  37. No waivers
  38. Severability
  39. Third party rights
  40. Variation
  41. Entire agreement
  42. Export control
  43. Law and jurisdiction
  44. Interpretation

Schedule 1 - Software development particulars
Schedule 2 - Form of change control notice
Schedule 3 - Form of escrow agreement

Is the developer's pricing information protected under this software developer agreement?

It can be treated as confidential information in the standard and premium templates.

When does this software development agreement come into force? Can it be easily backdated?

It comes into force on the "Effective Date", which is defined as the date of execution of the agreement. However this can easily be changed so that the Effective Date pre-dates execution. If you plan to do this, you should check that the other provisions of the agreement make sense in your particular context.

What does the software development agreement include to help a developer where a project is delayed for reasons outside the developer's control?

The agreement includes a force majeure clause. This provides that obligations are suspended for the duration of a force majeure event. A force majeure event is defined as an event or serious of events outside the control of the affected party. Examples of force majeure events might include third party industrial disputes, terrorist attacks and environmental disasters. Where a developer's performance is affected by such an event, the developer may be placed under a duty to keep the customer informed, and also to take steps to mitigate the effects of the event. In addition, there is an express exclusion of liabilities arising out of a force majeure event.

How does the change control procedure in the premium agreement work?

Either party may request a change to the terms of the agreement or the specification of the software at any time, although in practice it is the customer that will usually make such requests. The requesting party must send a change control notice to the other party, outlining the impact of the change on the timetable under the contract, details of any additional resources that may be required, and details of any consequential variations of contract. The other party has a fixed period to consider such request. Before the end of that period, the other party should either accept or reject the notice, or request additional information, or propose changes to the notice. One obvious variation that may be needed in the case of requests from the customer is a change to the charges.

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A copy of this software development agreement is included in the following pack:

  • Software developer pack (all versions of this document are included in the premium version of the pack and the basic and standard versions of this document are included in the standard version of the pack)
Average rating (2 Reviews):  
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Rating:  
Not as useful as I would have hoped
Wednesday, 25 November 2020  | 

The content description for this product contains reference to three different versions of the agreement, however you only receive the basic version. Misleading.

Additionally it would be useful if the agreement contained the following:
- Waiver of moral rights
- Although there is a warranty that the software won't breach a 3rd party's rights, it makes sense to include a clause that includes an uncapped indemnity and right to a full refund.
- A warrant that the code doesn't use any open source libraries would be useful. Large investors sometimes seek this.
- Some clauses around an acceptance testing process. If the software doesn't pass after the xth test the customer has the right to a refund.
- Confidentiality clause.
- Provisions for security measures taken by the Developer.
- Non compete clause.

Once again, not that impressed by template products, but you get what you pay for I guess.


Response:

Thanks for your review.

Whilst the contents pages have always listed contents of the different versions (basic / standard / premium) separately, and I don't really see how the page could be characterised as misleading, I've nonetheless added some introductory text which might reduce the scope for confusion in future.

I've also looked at the main description, which clearly differentiates between the different versions of the contract, and can't see any way in which this might mislead.

Both the standard and premium versions of the template include clauses covering acceptance testing and confidentiality, along with indemnities which can be capped or uncapped.

Specific security obligations relating to the code produced by a developer would usually be part of the software specification, so are not included in the legal text.

I am aware that "no open source" clauses are common in purchaser-friendly development agreements issued by corporates. I haven't included one here because these documents are designed primarily for SME and in my experience most software development projects do use open source materials. Nonetheless, I will look again at adding such a clause to the premium and perhaps standard version of the document when the documents are next updated.

There are no moral rights in software itself: hence the ommission of moral rights waiver from these templates. Where software does incorporate other types of work, these may be provided by third parties, and in these cases a moral rights waiver would not usually be appropriate. Again, however, I'll look at the possiblity of adding a waiver relating to text and graphic works produced by the developer to the longer versions of this document (again, not the basic version) when I next review.

Lastly, I generally avoid non-compete clauses in templates used by non-lawyers, as these often are: they can be relied on too easily without consideration of the question of enforceability.


Rating:  
Very good!
Monday, 8 June 2020  | 

There are all things we needed.


Response:

Thanks for your review.