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Important Points to Consider When Creating a Software Development Agreement

The agreement not only protects the client ensuring that they get the software they need, it also ensures that the developer gets fairly paid once the project is complete and works as a way of resolving any disputes should they arise.

There are a number of important points you should consider when drafting your software development agreement. Firstly, ensure that you include specific development stages or ‘milestones’ as they are often called. This way all parties know what to expect at each stage of the development process and there is a clear timeline for completion. Adding milestones to a software agreement is also advantageous for the developer as the client has to sign off each stage of the development. This means that there can be no unfounded claims of unsatisfactory work and it also helps the developer keep up with the changing needs and wants of the client.

It is important to define software specifications when creating the development agreement. This stops any misunderstandings occurring as both parties are aware of the functions that need to be fulfilled by the software. It is a good idea to initially create a functional specification using non-technical language that can be understood by all parties and then a more detailed and precise specification that will contain all of the necessary technical information.

The transfer of copyright ownership and intellectual property should be a priority within your software development agreement and is often one of the most debated issues during the development process. Whilst the software is being created the developer will own the copyrights, however upon completion these should be transferred to the client. Once the client has ownership of the IP rights they can use and modify the software as much as they need to without the restraints often associated with licence agreements.

The developer will usually want to retain the background technology used to create the software and just licence this out to their clients so they are still able to use it in conjunction with the software. It should be clearly laid out in the agreement that the developer will not be transferring ownership of the background technology to the end user of the software.

Finally, adding warranty information to your software development agreement is a good way of reassuring your clients that the software they are paying for will work as intended. It is also good practice to add in a non-infringement warranty that guarantees the software being developed will not infringe on anyone’s copyright or other intellectual property.

Have any questions about creating a software development agreement? Tweet us @leas29.

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