Software Development Agreement Template

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A software developer agreement is a legal document that specifies the software services to be performed or delivered, stating all the main requirements, terms and conditions of the project being developed by the vendor for you as a client. Download this legal form in PDF or Word format and create a concise legal document for your business needs.
Software Development Agreement

This Software Development Agreement (the "Agreement") is entered into on   (the "Effective Date") by and between

 , an individual having their usual place of living at   (the "Client") and  , an individual having their usual place of living at   (the "Developer"), collectively referred to as the "Parties" and individually the "Party".

WHEREAS the Developer has experience and expertise in the IT business and in providing IT-related services required by the Client;

WHEREAS the Client wishes to procure specific IT-related services from the Developer;

NOW, THEREFORE, in consideration of the mutual covenants and representations set forth in this Agreement, the Parties hereby agree as follows:

Subject of the Agreement

The Client orders and the Developer shall render the software development services (the "Services"):

The scope of Services which shall be provided by the Developer under this Agreement will be as follows:  .

"Software" in this Agreement refers to source code, object and boot code/modules, a set of instructions in the form of words, numbers, schemes, symbols, or any other form suitable for reading by a computer as well as computer programs, databases (compilation of data), screen forms generated by the programs of graphical user interface and its functions, programming application interfaces, improvements, enhancements and changes to existing programming code and specification, external design, technical specifications, programmers' comments, instructions for use, and other documentation relating to such objects of intellectual property rights.

Development tools. The Developer agrees to use the software development tools integrated into development environments, software development kits, and other development aids specified by the Client and set forth in this Agreement.

The Developer shall keep the Client reasonably informed of the progress of services and, in particular, shall notify the Client of any substantial obstacles or likely delays in the performance.

Relationship of the Parties

The Parties to this Agreement are independent contractors. Nothing in this Agreement or in the course of its performance shall be interpreted to create an employment, agency, joint venture, or partnership relationship between the Developer and the Client. Both Parties acknowledge that the Developer is not an employee of the Client for tax purposes or any other purposes. The Developer is not entitled to or eligible for any benefits the Client may make available to its employees. The Client will not withhold or make payments for social security, make unemployment insurance or disability insurance contributions, or obtain workers' compensation insurance on behalf of the Developer. The Developer is solely responsible for filing all tax returns and submitting all payments as required by any federal, state, or local tax authority arising from the payment of fees to the Developer under this Agreement and agrees to do so in a timely manner.

Non-solicitation. During the term of this Agreement and for a period of   thereafter, each Party shall not in any way, directly or indirectly including via entities which the Party owns or controls, employ, solicit to employ, or otherwise engage, or attempt to do so, the employees, contractors, or consultants of the other Party.

Services policy. The Developer should provide the Services in compliance with the technical and functional specifications received from the Client as agreed in this Agreement.

Delivery and acceptance of the Services, rejection notice. The Developer shall provide the Services following the time frames specified in this Agreement or agreed upon by the Parties in any other way. 

Upon delivery, acceptance tests shall be conducted to ensure the results of the Services conform to the requirements of this Agreement.

The results of the Services provided shall be subject to acceptance by the Client. Such acceptance shall be at the Client's good faith discretion and not be unreasonably withheld.

The results of the provided Services will be presented to the Client for acceptance in accordance with the scope of Services specified in this Agreement. Within   days of receipt from the Developer, the Client shall either notify the Developer via email of acceptance of the results of the provided Services or notify the Developer via email of rejection of the Services detailing the deficiencies of the Services under this Agreement. If the Client rejects the Services, the Client may grant additional time to the Developer to correct any defects, inaccuracies, inconsistencies, and/or program errors, and upon correction thereof, the Developer should resubmit the Services to the Client for acceptance testing as provided above.

If the Developer fails to make the required corrections within the granted additional time, the Client has a right either to accept the Services as nonconforming, in which case the fees shall be reduced equitably, or to deem the failure to be a material breach of this Agreement and terminate this Agreement unilaterally.

Payment terms and procedure

Fixed price. The Client shall pay the Developer a flat fee of  . Unless otherwise expressly agreed by the Parties, the Developer will submit invoices to the Client upon completion of the milestones specified in this Agreement or upon completion of the Services. 

All payments to the Developer will be due   business days following the Client's receipt of the invoice for such fees. 

All payments should be made by cash.

All objections regarding the fees to be paid for the provided Services shall be submitted in writing to the Developer within   business days after the Client receives the invoices.

Intellectual property rights and work product ownership 

For the purpose hereof, "Intellectual Property" means any copyrights and related rights, database rights, patents, designs, trade secrets, confidential or proprietary information, know-how, code, documentation, formulae, specifications, trademarks, service marks, or other industrial or intellectual property rights, and any applications for any of the foregoing, whether registered or not and whether registrable or not, and all similar or equivalent rights or forms of protection in any part of the world.

All source code, object code, text, audio, visual content, and any other results of the Services produced, developed, or provided by the Developer in connection with the provision of Services to the Client (the "Work Product") shall fully belong to the Client and shall be included in the Client's Intellectual Property subject to the terms and conditions described in this Agreement. 

The Work Product shall be deemed "work made for hire" to the fullest extent permitted by law so that Intellectual Property rights to the Work Product are owned solely and exclusively by the Client since the moment of creation. The Developer further represents and warrants that the Developer shall not claim any Intellectual Property rights to the Work Product before, during, and after completion of the Services and transfer of the results of the Services to the Client. 

Warranties and representations

Each Party represents and warrants to the other Party that:

  • Each Party has the full right, power, and authority to enter into this Agreement, grant the rights and licenses granted hereunder, and perform its obligations;
  • This Agreement will constitute the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms.

Furthermore, except as set forth herein above, the Developer represents and warrants that:

  • The Developer has the ability, experience, and resources to fulfill all obligations under this Agreement and will perform all Services in a professional and workmanlike manner, following best industry practices for similar services;
  • The Work Product, excluding the Client's materials, will be free of any malicious code or any computer software routines or programming devices designed to permit unauthorized persons to access the Client's systems, data, or confidential information or disable, modify, destroy, or damage data, or make it inaccessible or delayed;
  • The Work Product will not infringe, misappropriate, or otherwise violate any Intellectual Property Right or other right of any third party and will comply with all applicable laws. 
Term and termination procedure

This Agreement shall commence as of the Effective Date and shall be valid until  .

Termination without cause. Either Party may terminate this Agreement for no reason upon  -day written notice to the other Party. 

Upon termination of this Agreement, the Client shall pay the Developer for all Services satisfactorily completed by the Developer through the date of termination.

Termination for cause. Either Party may terminate this Agreement in case of material breach by the other Party. 

For the purpose of this Agreement, a material breach shall include a failure to provide the Services in accordance with the requirements, schedule, and procedures specified in the Agreement; failure to make corrections to the provided Services; failure to consider corrections to the Services in good faith and within a reasonable time frame; violation of the non-solicitation and confidentiality clauses; violation of payment terms.

If the Developer materially breaches the Agreement, the Client shall have the right to terminate the Agreement by sending a written notice of the breach. If the Client fails to remedy such breach within   days, the Developer may terminate the Agreement immediately and demand reimbursement of damages.

If the Client materially breaches the Agreement, the Developer shall terminate the Agreement by sending a written notice on termination and demand reimbursement of damages.

Other conditions of termination. Either Party may also terminate this Agreement immediately upon written notice if the other Party is declared bankrupt, files for bankruptcy, ceases to function or conduct operations in the ordinary course of business or makes an assignment for the benefit of creditors.

Survival. Upon termination of this Agreement by either Party, each Party shall turn over to the other Party all of the other Party's material, property, and Confidential Information, in addition to any other results of the Services required upon termination of this Agreement. Termination of the Agreement shall not cancel accrued rights, remedies, or liabilities of either Party, including payments for the Services performed before termination . The following provisions shall survive termination: Non-solicitation, Payment terms and procedure, Intellectual property rights and work product ownership, Warranties and Representations, Survival, Governing law and dispute settlement, Liability and indemnification, Confidentiality, and Miscellaneous.

Notices 

All notices sent under or related to this Agreement will be deemed sufficiently given if sent by certified mail, return receipt requested, to the following addresses:

If to the Client:

Attn.  ,

 

If to the Developer: 

Attn.  ,

 

Governing law and dispute settlement

This Agreement will be governed by and construed in accordance with the laws of the State of  , except for its conflict of laws principles.

The Parties agree on the exclusive jurisdiction in the court of  .

Liability and indemnification 

Each Party agrees to indemnify and hold harmless the other Party against any damage, liability, and loss, as well as legal fees and costs incurred that may arise or otherwise relate to this Agreement. This clause shall not be read to provide indemnification for any Party if a competent court of law, rendering a final judgment, holds that the bad faith, gross negligence, or willful misconduct of the Party caused the damage, liability, or loss.

Confidentiality

The confidential information shall mean any information that is disclosed by one Party (hereinafter the "Discloser") to the other (hereinafter the "Recipient") in connection with the Agreement which is conveyed in written, graphic, machine-readable, or other tangible form and marked "confidential," "proprietary" or in another manner to indicate its confidential nature. This confidential information shall include, without limitation, trade secrets, know-how, inventions, techniques, processes, algorithms, software programs, semiconductor designs, schematics, designs, contacts, customer lists, financial information, sales and marketing plans, and business information. 

The Recipient agrees that during the term of this Agreement and   thereafter, the Recipient shall in no way disclose, use, or disseminate any confidential information that the Recipient has received from the Discloser to any person, corporation, association, or other entity for any purpose not expressly permitted or required under this Agreement and without obtaining the Discloser's prior written consent on a case-by-case basis.

Force majeure

Neither Party shall be liable for any failure to perform or delay in performing the obligations under this Agreement if such failure or delay is caused by events of force majeure, including but not limited to acts of God, war, terrorism, strikes, lockouts, labor disputes, pandemics, epidemics, governmental regulations, or any other similar causes beyond the reasonable control of the affected Party.

In the case of force majeure, the affected Party shall immediately notify the other Party in writing and provide the other Party with reasonable evidence of the reason for the delay or inability to perform the obligations. The Party affected by force majeure shall endeavor to mitigate the consequences of such circumstances and resume the performance of its obligations as soon as possible after the circumstances cease to exist.

If the force majeure circumstances last more than   days, either Party may terminate this Agreement by giving written notice to the other Party. In this case, neither Party shall be liable to the other Party for any damages arising from the termination of this Agreement.

Miscellaneous 

Severability. If and to the extent any provision of this Agreement is held illegal, invalid, or unenforceable in whole or in part under applicable law, such provision or such portion thereof will be ineffective as to the jurisdiction in which it is illegal, invalid, or unenforceable to the extent of its illegality, invalidity, or unenforceability. The illegality, invalidity, or unenforceability of such provision in that jurisdiction will not affect the legality, validity, or enforceability of such a provision or any other provision of this Agreement in any other jurisdiction. 

Entire Agreement. This Agreement is the complete and exclusive understanding between the Parties with respect to the subject matter hereof, superseding any prior agreements and communications, both written and oral, regarding such subject matter.

Amendments. This Agreement may only be modified, or any rights under it waived, by a written document executed by both Parties. 

Binding effect. This Agreement shall be binding for the Parties and their respective permitted successors and assigns. 

IN WITNESS WHEREOF, the Parties have signed this Agreement as of the Effective Date.

Details and signatures of the Parties

THE CLIENT

THE DEVELOPER

  ,

 

Email:  

Phone number:  

 

Banking Details

Bank name:  

Account number:  

______________________

(Place for signature)

  ,

 

Email:  

Phone number:  

 

Banking Details

Bank name:  

Account number:  

______________________

(Place for signature)

Written by Megan Thompson - Reviewed by Jonathan McGill

Template Description

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Paper titled "Software Development Agreement", man sitting at the computer and coding

Our daily lives revolve around software, which helps us with personal, recreational, and professional duties. Naturally, a pertinent question arises — what are the legal necessities when designing software for a client? Where can we define the terms and conditions of such a critical task?

This is where the utility of a software development contract comes in. If you're a business owner or involved in an IT department, and you're looking to collaborate with a skilled developer to meet your business needs, you'll need a software development agreement.

What Is a Software Development Agreement?

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A software developer contract is a binding contract that delineates both the detailed scope of work and the relevant terms and conditions for a software development project.

The software development contract template presents the platform for parties to have concise and clear documentation of their expectations, duties, and understandings about the project. The fundamental terms and conditions should generally be balanced, but can be adjusted to favor either the developer's or the client's interests as necessary.

Parties of the Software Development Agreement

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The symbiotic relationship between two crucial entities — the client and the developer — lies at the heart of any software development agreement template.

  • Client
    This could represent a single person, a small-scale enterprise, or even a massive corporation that's in need of software development services. The client provides the project's requirements, objectives, timeline, and the agreed fee for the developer’s services.
  • Developer
    Typically, this is a professional software creator, either a freelancer or a software development company. The developer is tasked with creating software as per the client's demands, within the stipulated timeline, and for a predetermined fee.

Components of the Software Development Contract Template

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Crafting a software developer agreement requires a keen eye for detail. Technicalities can be subtle yet critical to the project's success. Here are some salient points you might consider.

Developer's duties

This section outlines the core obligations and functions the developer is obliged to fulfill. It covers the distinct services to be provided, milestones to achieve, and outcomes expected from the developer throughout the software development lifecycle.

In addition, the developer's duties specify that they must complete their work in accordance with industry best practices, keep open lines of communication, and give frequent updates. 

Client's responsibilities

The client's role in a software developer contract template is integral to its successful execution. Their key tasks include clearly articulating project needs and expectations, participating actively in discussions, and honoring financial commitments such as prompt payments. Moreover, they are required to uphold the agreement’s confidentiality clauses and intellectual property rights provisions.

Delivery

Adhering to stipulated time frames is paramount in the provision of software development services. As stipulated in this agreement, the developer commits to delivering the services within the agreed timeline, ensuring a seamless development process.

Following the completion of services, the developer is mandated to furnish the client with the results. This is in accordance with the scope of services stipulated in the contract for software development. After the presentation:

  • The client is given a specific time frame within which they can either accept by sending an email acknowledging the service results,
  • Or reject the services by specifically stating the deficiencies, inaccuracies, inconsistencies, or errors.

In case of rejection, the client may allow the developer additional time for rectification of services. Consequently, upon the correction of identified errors, the developer is tasked with the responsibility to resubmit the services for the client's acceptance testing.

Compensation

The compensation section provides a comprehensive overview of the payment terms. It elaborates on the agreed fee for the service provided by the developer, the method of payment, and the timing of such payments. It is geared toward ensuring an effortless and transparent financial exchange between the involved parties.

Additionally, it might include provisions related to contingent compensation, safeguarding the interests of both parties. Furthermore, it may detail potential penalties that may apply if the developer fails to adhere to the stipulated delivery timelines.

Intellectual property rights in the software

In the context of this software development agreement, all intellectual property — which encompasses copyrights, related rights, patents, trade secrets, proprietary information, code, design, and more — relating to the software is of utmost importance.

Any output produced, developed, or provided by the developer is considered a "work product." 

  • The work product, in its entirety, belongs to the client, thus, becoming the client's intellectual property.
  • Considered as "work made for hire," all intellectual property rights in the work product solely and exclusively rest with the client from the moment of creation.
  • The rights to the work product stay with the client before, during, and after the completion of services, and it is validated by the developer that no claims will be made on these intellectual property rights.

Change in specifications

The agreement must provide clear procedures for accommodating changes to the software specifications. These can be anything from small adjustments to large-scale redesigns, reconfigurations, or feature additions.

It's essential that any changes still align with the projected timeline, budget, and overall objectives of the project. Measures should be in place to evaluate the impacts of these alterations effectively and maintain transparent communication between the client and developer.

Confidentiality

Given the sharing of potentially sensitive information, this section serves to guard proprietary data. It requires the developer to keep trade secrets and other confidential information about the business and the project.

Terms and termination procedure

In every custom software development contract, it's crucial to lay out clear terms of engagement and termination procedures. This section addresses both the conditions that can trigger termination and what happens afterward.

Here are some key aspects of termination procedures in the software development agreement sample:

  • Termination without cause: The agreement should specify the legal requirements of the process for either party wishing to end the contract without a specific reason. This usually requires a notice period to allow for an orderly wind-down of services.
  • Termination for cause: This refers to an agreement being terminated due to certain breaches or violations. These conditions should be well defined, including material breach, failure to meet deadlines, or non-payment.
  • Other conditions of termination: The agreement may lay out unique situations leading to termination, such as bankruptcy, or regulatory changes that significantly impact the project.
  • Survival: This term refers to provisions that continue to remain in effect even after the termination of the agreement. These often include confidentiality, dispute resolution, and intellectual property rights.

Indemnification

The indemnification section outlines the detailed description of provisions dealing with any breaches of the contract, as well as any legal claims that arise from the use of the software developed under this agreement, thus shielding both parties from financial risks. This clause not only allocates responsibility for any legal issues, but it also dictates who handles associated costs. 

Governing law

The contract software development must specify the geographical jurisdiction and the set of laws under which the agreement will be interpreted and disputes resolved. In the event that a legal disagreement arises between the client and the developer, the choice of governing legislation may have a substantial effect on the results.

At Loio, we offer specific tailored contracts for your convenience. Creating and downloading software development contract template PDF allows you to get the required legal documentation for your company. Simply customize it with your unique details and preferred conditions, and you're all set.

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