4 Keys To Successful Software Development Agreements

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software development agreementsWhether you are a software developer, or your business outsources app development, you’ll need software development agreements to protect your legal interests. Many business owners think they can simply copy and paste agreements they find online, but this is a recipe for disaster.

Why is it risky to “borrow” a Software Development Agreement Template?

Borrowing an agreement drafted by and for another company can lead to serious legal repercussions. App development contracts are considered intellectual property and can only be used under license from the copyright owner (usually the lawyer or firm who drafted the contract). If you have not paid for the right to use the agreement (or worse, if the legal form generator you are using doesn’t explicitly own the forms), you could face hundreds of thousands in legal damages.

Also, legal agreements are unique and will vary depending on your (and the other party’s) needs. Even if you download a template with legal permission, you could unintentionally omit clauses which you require or subject yourself to unnecessary obligations.

There are four essential things you should know before creating a software development contract:

  1. the standard items you need to include in your agreement;
  2. how to handle ownership of intellectual property;
  3. when you’ll need additional contracts; and
  4. how you will handle maintenance of the app after development.

1. Standard Items You Must Include in Your Software Development Contract

While your contract should be tailored to your unique situation, there are some common issues you’ll want to address in any Software Development Agreement. Be sure to discuss the scope of work you will be performing for the agreed-upon cost and how you will handle change orders. You also want to outline key milestones and deliverables.

If the client is not satisfied with a deliverable, will you agree to any edits? If so, describe how much time your client has to request a change and how many changes you will make.

If you plan on outsourcing work to third-party coders or programmers, make that clear in your contract.

Also, detail payment expectations and any warranties you are willing to provide for your client.

2. Intellectual Property Ownership: How to Balance Competing Interests

One of the most important aspects of your contract will be defining ownership of the intellectual property you are creating. Consider whether you or the client will maintain ownership rights or if you will be granting a license to use your software.

Software developers often want to keep ownership of the code used to create a client’s software so they can recycle the code for future projects. Clients, on the other hand, often want to own the intellectual property subject to a software development agreement to prevent the developer from re-selling the software to potential competitors.

Fortunately, there are creative ways to balance these two competing interests by creating a software license with non-competition provisions. This enables the developer to retain ownership over intellectual property while also restricting the purposes for which the code can be recycled.

3. If You Are Developing Multiple Apps for a Client, You Need a Master Service Agreement

A Software Development Contract is typically utilized for a single project only. However, if you are anticipating an ongoing relationship and multiple projects for a single client you will also want to execute a Master Services Agreement.

This Agreement should outline the essential terms that apply to all apps being developed and additional agreements for each project should be attached as “work orders.”

Related Article: How To Modify A Software Development Agreement

With each work order, you can reference the key terms used in the Master Agreement or you can make exceptions to certain provisions based on the unique needs of each project.

4. You Need to Plan for Maintenance, Support, and Upgrades

Virtually any form of software application will require bug fixes and upgrades to keep the program up-to-date and functioning properly. A well-written software development agreement will detail who is responsible for maintenance of the application, additional costs involved (if any), and how to request support for bugs and glitches.

Developers who maintain ownership over the intellectual property and merely license the software to the client often take responsibility for ongoing maintenance, support, and upgrades: but it is imperative that these details are clearly outlined in your contract. Ironing out all of the details of your agreement will go a long way toward preventing disputes, ensuring a good working relationship, and keeping clients satisfied.

Software development agreements are highly detailed, unique legal documents. It is wise to seek the counsel of an experienced software attorney to prepare development contract templates that you can use repeatedly while still protecting your best interests.

Our software attorneys prepare app development agreements on a flat fee basis. To learn more, check out our Software Development Legal Protection Package.

Software Licensing Agreements

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software licensing handbook

The book “Software Licensing Agreements – What You Need To Know About Software Licenses” by Software Lawyer Mike Young has just been released.

How The Software Licensing Agreements Guide Helps You

Part of the Quick Legal Guides series, this new guide reveals…

  • What is a software license (the answer may surprise you).
  • How to define the scope of a license to get what you want.
  • 11 common software licenses (and when you should use them).
  • What is open source licensing.
  • 7 popular open source software licenses.
  • One license you should never use for open source software.
  • What is public domain software.
  • How to create software licenses that are right for you.
  • And why you should never “borrow” a license.

Plus, there’s a Quick Start Checklist and a Resources section for you to take practical steps right away to get the software license(s) you want…whether you’re licensing your software to others to getting a license to use an application.

Where Can You Get This Software Licenses Guide?

This business law book is available at Amazon.com in print as a paperback and in Kindle electronic format. Claim your copy today.

Software Development Work Orders: What You Need To Know

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Software Development Work Orders: What You Need To KnowSometimes called a Scope of Work (SOW), software development work orders define project work.

Also important, a project’s work order excludes tasks. That’s essential to avoid misunderstandings between client and developer.

Master Services Agreements And Work Orders

Work orders are common when there’s a master services agreement. For example, the developer will do more then one app project in a year.

These master agreements are flexible. Because they allow either party to walk away with advance notice, for cause, etc.

And they’ll often renew for another term if there’s a good working relationship.

Of course, the underlying software development agreement will favor one party. If you hire the software lawyer to prepare the contract, it will favor you. Because terms and conditions make a difference.

Software Work Orders Versus Change Orders

It’s important to note that work orders are different than change orders.

  • A work order defines the original scope of work.
  • But a change order modifies that scope during the project.

Work Order Signatures

Of course, work orders (and change orders) should be in writing. And signed by authorized parties. Either on paper or electronically.

Now an experienced software attorney often prepares software development template work orders and change orders for client use.

Where To Get Software Development Work Orders

Are you a software developer? Or a business owner who retains them to develop applications?

Software Lawyer Mike Young can prepare a software development agreement that’s right for you. Plus software development work orders. And template change orders. Check out the Software Development Legal Protection Package to learn more now.


Software Maintenance Agreements: What You Need To Know

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Software Maintenance AgreementsFor software agreements, business owners think of development contracts and licensing. Yet software maintenance agreements play an important role.

Software application maintenance can be part of the original software development agreement. Or it can be a standalone contract. Either the developer or a third party agrees to update and maintain the application.

Beware Of The Disappearing Software Maintenance Provider

Of course, your agreement is only as good as the services provider.

For example, let’s say your business has an app developed by a small team in India. And the development agreement provided for one year of maintenance for a flat fee.

But if the team doesn’t respond to emails and other attempts to contact them, what are you going to do? You’ll need to find a replacement because you can’t enforce the maintenance agreement.

Scope of Work

Your software maintenance contract should define the scope of work. Will there be remote support? On-site support? Updates? Upgrades? How quickly will there be a response to a request for help?

And the related costs…

  • Will there be a flat fee?
  • Extra costs for working nights and weekends?
  • If support is on-site, will you pay for travel time?

Software Changes And Ownership

Intellectual property ownership is also a concern. A good app development agreement will make it clear what you own and what’s licensed.

Similarly, what if your provider modifies the application as part of maintenance? You’ll want to know the intellectual property rights you’re getting to the changes.

Where To Get Software Maintenance Agreements

Do you need a separate software maintenance agreement? Or maintenance provisions included in an app development contract?

An experienced software attorney can prepare the legalese to protect your rights. Set up a phone consultation now with Software Lawyer Mike Young to discuss what you need.

How To Modify A Software Development Agreement

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How To Modify A Software Development AgreementAmit wanted to modify a software development agreement to reflect requests his client had made to change the project’s scope of work (SOW).

Of course, Amit had told the client there would be more costs because of the extra work he’d have to do. And the client wanted a quick turnaround. So Amit charged a premium for working nights and weekends to meet the deadline.

Yet Amit never found the time to change the software contract to cover the new work and fees.

When the project ended, the client refused to pay for the extra work. It would have cost more for Amit to sue the client than the amount owed. And he didn’t have anything in writing to prove the client had agreed to pay more.

Now Amit could have avoided this problem.

Are you a software developer? Or do you own a business that outsources app development?

Then it makes sense to use an agreement that lets you easily revise the contract to reflect changes in the SOW.

Need help with your app development contract?

Or do you want to modify a software development agreement…but you don’t know how? It’s time to talk with Software Lawyer Mike Young. You’ll want to book a phone consultation today.