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Software Agreement

Are You Selling Software Or Licenses?

By Software Agreements, Software Lawyer
software license agreement

When you (or your developer) creates a software application for a market, what exactly do you plan to sell to that market?

Chances are you’ll want to sell licenses to use the software, not the application itself. Because you want to retain intellectual property ownership of the application.

There’s a difference? Absolutely.

If you’re selling the application itself, you getting paid for the intellectual property ownership and probably retaining no rights to it.

That’s an awkward and dangerous legal situation…like selling the your home to 500 different buyers even though you own just the one house. What happens when all 500 buyers believe they own it?

The smart move is to sell multiple licenses to use the application while regaining ownership of the software.

Of course, there are many different types of licenses with various rights and responsibilities. For example, there’s an end user license agreement (EULA), resale license agreement, private label license, etc.

And if you do decide to sell ownership of the application to a buyer, that can be done with a software acquisition agreement. This is typically for a sales price much higher than each license you sell for the application’s use.

Regardless of what you plan to do, the first move should be to discuss it with an experienced software lawyer in order to identify the right software agreements to use. And if you need legal help now, set up a phone consultation with Attorney Mike Young.

Getting Paid For Software Development

By Software Agreements, Software Lawyer
software development agreement

When you’re developing a mobile app or other software application, you want to get paid for your work. However most developers screw up this important issue in the way they handle payment in their software development agreements with clients.

This is particularly true where there’s unequal bargaining power. For example, a solo app developer contracting to do a project for a large company may need the work to pay this month’s rent.

Yet if you don’t get paid timely, you won’t be in business for long.

And the dirty little secret is that some software developers aren’t in business…they have an expensive hobby because they rarely get paid on time or what they’re worth.

To prevent this from happening, you’ll want the payment terms in your software development to be clear and favor you as the developer.

Ideally, you’ll want to get paid as much up front as possible. This is more doable when the project is for a fixed price instead of on a time-and-materials basis.

And if you offer payment terms, those should be shorter rather than longer. After all, you’re not a bank in the business of lending money to earn interest.

So if a prospective client proposes payment NET 90 from receipt of invoice as the company’s “standard” policy, think seriously about countering with NET 30, NET 14, or even payable upon receipt.

And there should be penalties for late payments. This can include things like accrued interest and suspension of your services until payment is made.

Now one of the biggest weapons you have in your arsenal to ensure getting paid is intellectual property ownership. Because a properly crafted software development contract can specify that the client owns nothing until you’re paid in full.

Of course, one of the things you should do to ensure payment is to do perform due diligence on a prospect before agreeing to any software project. Because nonpayers leave clues.

For instance, you’ll find reviews on Google, Glass Door, and other sites that can reveal if a company has a pattern of cheating or nonpayment of customers, suppliers, workers, and others.

Note that I said “pattern.” Because a single negative review may have been posted by a crazy person or an unethical competitor. Yet a half dozen reviews complaining about the same misconduct is probably a pattern that should be a legitimate red flag.

Now if you need help with an existing software development agreement or getting a new one prepared that you can use for your client projects, it’s probably time to schedule a phone consult with Software Lawyer Mike Young.

Are You Using The Right Software Contract To Distribute Your App?

By Software Agreements, Software Lawyer

software licensing agreementWhether you’ve paid for an app to be developed or you’re a software developer who created one, it’s important to protect what you own by using the right software contracts when selling your application…or when giving it away if it’s a free app.

Why Borrowing A Software Agreement Is A Bad Idea

Unfortunately, some software application owners make the mistake of “borrowing” the wrong type of software agreement that they find online. More often than not, the contract isn’t designed to protect their rights. And, in fact, they’re probably creating a legal nightmare of intellectual property rights that could end up as an expensive lawsuit at any time.

Software Ownership

Although there are other important issues, the most essential one is who owns what.

For example, you probably don’t want to use a software agreement that gives all rights to the end user. That means you’d own nothing after selling/giving away the first copy of the application!

And it wouldn’t work well to try to have a reseller receive only an end user license.

Open Source Code And Your Rights

Yes, software intellectual property rights are a complex issue. And they get more complicated if the application uses a combination of custom and open source code. Because you can’t sell or give away more rights than you have in the first place.

Do you know exactly what rights you’ve got to your software application? Or what rights you’re granting others when distributing the software to them?

Perhaps it’s time to get the right software agreement(s) in place to protect what you own. And clean up any messes that have already been made before you end up in court over it.

How To Get Help

Do you need a new software agreement? Or help with an existing one? Set up a phone consultation with Software Lawyer Mike Young.

Does Your Software Development Agreement Let You Recycle Code?

By Software Agreements, Software Lawyer
custom software development agreement

If you’re a developer, one of the most important rights you’ll want to have in your software development agreement is the ability to recycle code for other clients’ projects.

And, if you’re not clear about how owns what, chances are each client will think they own the code and you can’t use it again for others or even your own clients.

Now an experienced software lawyer can craft a software development agreement that makes it clear what you own, what the client owns, what’s licensed, and the terms of the license granted.

Of course, the development agreement will also cover other important ownership issues, such as the parties’ rights to open source code used in the project.

If you need help putting together an app development contract that protects your legal rights, schedule a phone consultation with Software Lawyer Mike Young.

How Should You Pay For Software Development?

By Software Agreements, Software Lawyer

If you’re planning to pay for a software developer to create an app for you, how should you pay for it?

This is an important question because structuring the development contract the wrong way can cost you a fortune without even getting the app you paid for.

Ideally, the software development agreement should provide that you pay a fixed price for at least the minimum viable product (MVP) version. And that fixed price is split out into multiple payments made as certain milestones are achieved during the dev process.

It’s dangerous to pay for app development on a time and materials basis if there are no caps, deadlines, milestones, or other restrictions on the developer. In essence, you’re trusting someone to not overcharge you and to actually deliver as promised. And by the time you discover the developer is incompetent, inexperienced, or corrupt, you’ve paid out a lot with little or nothing in return.

Sometimes it makes sense to take a hybrid approach. For example, a fixed price for the MVP version of the app to be developed. And then certain improvements done on a time and materials basis.

Regardless of which method you pick, never pay all or most of a software developer’s fee up front. Chances are you’ll never get the app and there won’t be a refund either.

An experienced software lawyer can prepare an app development contract that’s designed to protect you from these and other dangers (loss of code ownership, your developer competing against you, etc.).

What if the developer insists on using his contract? Have a software attorney review it before you sign so that issues can be resolved now rather than cleaning up an expensive mess later.