White SW Computer Law
Intellectual Property, Information Technology & Telecommunications Lawyers
Melbourne Office - PO Box 452, COLLINS STREET WEST Victoria 8007 Australia
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developmentcontract

SOFTWARE DEVELOPMENT CONTRACTS

Steve White, Principal - White SW Computer Law

WHAT POINTS SHOULD BE COVERED IN YOUR AGREEMENT?

  • Full name, [registered] address, telephone number, facsimile number and ACN (if applicable) of supplier and customer
    This avoids confusion at a later date as to who the parties to the contract are - in many cases confusion may arise due to similar business and company names.
  • Recitals which give an overview of the roles of the parties to the agreement
  • Definitions
    Should include definitions of all important terms used in the agreement to avoid confusion or ambiguity, for example:
    • What you consider to be your confidential information
    • What is the Intellectual Property
    • What is to be designated as your library code
  • Scope of your agreement
    Have you considered the development timetable and acceptance tests?
    What is the duration of the agreement - fixed or deliverable?
  • Software Specification
    Is it agreed?
    Is installation, documentation and testing etc included
    Performance Warranty
    Variation procedure
  • Intellectual Property Rights
    Who is to be intellectual property owner?
    If intellectual property rights are to be retained by the supplier, what are the terms of the licence?
    • Non transferable
    • irrevocable
    • in perpetuity or fee per annum
      Are there any limitations on use of the product?
    • Seats
    • Machines
      Who owns the Tools used to build the product?
      Are you assigning the copyright in your library code or licensing the use of same?
      If licensing the use of your library code, designate how the library code is to be used.
  • What support do you have to provide to your customer?
    Usually developers will provide support services pursuant to a separate agreement which will include:
    • What is the duration of support?
    • Is renewal of the Agreement automatic?
    • What is the Supplier to provide?
    • What products are supported?
    • Is upgrade to new levels of products compulsory if requested by Supplier
    • What level of support is required - On Site and/or Off Site, telephone support, e-mail support
    • Hours of operation
    • Are any warranties offered?
    • Are there performance criteria which must be satisfied?
    • Time frames for support
    • Guaranteed running time?
    • Are Updates/New Releases of supported products included?
    • Training
    • What services are excluded from Support
    • Consumables?
    • What does the customer need to supply?
    • Source code?
    • Access to premises
    • Access to equipment/modem facilities
    • Method of request for support
    • Fees
    • Limitation of Liability
    • Termination
    • Right to subcontract
  • What access will you need to your customer's site, personnel, software and equipment?
  • What are the prerequisite platform requirements?
    Agree on the required hardware and software platform.
    Any additional software to be detailed and supplied at who's expense?
  • What are your fees
    Usually involves multiple calculations so they should be expressed in a schedule to the agreement
    On what notice can you increase your fees?
    Are your fees exclusive of taxes, duties, fees or other government levies or charges?
    What interest is to be paid on overdue amounts? Will you want to suspend further services or your remaining obligations to the customer if you are not paid?
  • What are the customer's obligations for security of the developed software to minimise the likelihood that there is unauthorised use of the software?
  • How is the customer allowed to deal with your confidential information?
  • Do you want a restraint period to avoid your employees or subcontractors being engaged directly by your customer?
  • Intellectual property right indemnities
    What warranties do you want to give with respect to Intellectual Property?
    How will you indemnify your customer if your software is found to infringe another party's intellectual property?
  • How will you deal with defects?
    No obligation to fix unless substantial
    Fixed without fee
    Period of defect correction
    Quality Standards
    Implied terms
    • Due care and skill
    • Fit for purpose
  • Limitation of liability - is it valid?
  • Indemnity for loss suffered by third parties
  • Financial Undertaking
  • Does your customer need to obtain appropriate insurance.
  • How are the parties able to terminate the agreement?
  • Which clauses do you want to survive the termination of the agreement?
  • Are you or your customer able to assign, novate or sub-contract your rights or obligations under the agreement?
  • What is the governing law for the agreement?

HOW DO YOU EXECUTE AN AGREEMENT?

Option A - Company Seal

The common seal of XYZ Pty Ltd, ACN 000 000 000 was affixed
to this document in accordance with its articles of association in the presence of :
affix common seal here
Director/Secretary sign here Director sign here
Name of Director/Secretary
Director/Secretary
Name of Director
Director

Option B - Duly Authorised Representative

Executed by XYZ Pty Ltd, ACN 000 000 000 by being signed by
Name: print here
Title: print here
Who warrants and represents that he or she is duly authorised
to execute this agreement in the presence of:
sign here
Witness Signature: sign here
Witness Name: print here
Witness Address: print here
Witness Occupation: print here
Date:

Suggested schedules to be attached to your agreement

  • Schedule 1 - General Contract Details
  • Schedule 2 - Work Order Request
  • Schedule 3 - Fees

STEVE WHITE
WHITE SW COMPUTER LAW
MAY 1998

www.computerlaw.com.au

© White SW Computer Law 1998

This article is a guide only and should not be used as a substitute for proper legal advice, readers should make their own enquiries and seek appropriate legal advice.


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