Many businesses rely on third-party companies to produce software to carry out certain business functions. It is important you have a well-drafted software development agreement to ensure that provisions are laid out validly and legally.
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About Software Development Agreements
A business that requires a bespoke piece of software may enlist the services of a third party to develop it. It is critical that there is an agreement in writing for such work because copyright in the developed software will not belong to the customer unless the software developer has correctly assigned it in writing, even if the customer has paid for the software.
It is also important that the parties involved in a software development contract are certain of their rights and responsibilities. A well-drafted agreement will ensure that each party is aware of the scope of the services that are to be provided, when they are to be provided (including milestone dates), what fees and when they are to be paid, as well as specific details on what expenses are included and excluded.
While the purchaser of software will want to ensure that is it able to receive the full benefit of what it has paid for by obtaining title to the intellectual property rights of the software, conversely, the software developer may wish to retain title until such a time as it has been paid.
Furthermore, the parties may wish to agree between them a limitation of their liability, or a procedure by which specific damages are to be paid should certain circumstances arise, such as a missed deadline or testing failure. These issues may only be adequately addressed in writing and should be considered fully before being agreed, as what may commercially appear to be a good deal may not always be legally enforceable.
Making a Software Development Agreement
An agreement for developing software will usually set out the process involved, including:
- Software specifications
- The stages of development
- A timetable of deliverables
- How progress will be reported
- What tests will be carried out, and when acceptance occurs
The development process can either be worded as absolute, meaning the terms of the contract should be complied with without exception, or as qualified, which allows for circumstantial changes.
Our team has extensive experience in drafting software development contracts for both businesses and developers. We recognise the need for balance between the technical aspects of an IT project and the commercial interests of a business, as well as ensuring each party’s rights and obligations are clearly set out.
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If you need help drafting a software development agreement, get in touch with our Yorkshire-based team today by using the details below.
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