In addition to standard payment terms and procedures, the IT sector has its own specifics that the development agreement should take into account. There are a few nuances, but it’s better to discuss them in detail. After all, software development is a resource-intensive task, and unforeseen circumstances can lead to significant financial losses.
1. Transfer of exclusive rights
The contract should specify that the developer transfers to the client all rights to the software. This means that the client can use, sell, modify the software, etc. However, make sure that the developers do not retain such rights for themselves.
The developer and the employees involved in the development process retain the right to be referred to as the authors of the program. This is because, by law, copyright is inalienable.
2. Intellectual property of third parties
Sometimes it happens that in the application or on the website, it is necessary to use images, icons, or video clips owned by third parties. Often, these materials are available in the public domain and free for personal use. However, for commercial use, licensing usually differs significantly. Therefore, the development contract should have a separate clause regarding the use of materials belonging to third parties.
3. Warranties
The development of an IT product is a complex process. Errors always occur, and this is a fact. But there is no need to worry if your contractor adequately responds and corrects their mistakes. Make sure that the contract specifies a warranty period; otherwise, unscrupulous contractors may refuse to correct their mistakes for free (for example, we provide a 12-month warranty).
Important: We are talking about real errors here, not about “wishes” that were not specified in the technical specifications but came to your mind after some time.
4. Delivery procedure
Find out the approval procedures for interim work or refusal to accept, in case you disagree with the result. Also, verify that the project delivery process is described and how exactly it will be handed over to you.
For example, the application becomes yours after you sign the relevant acceptance certificates.
Such points are better discussed in detail because it is not a physical product. Make sure you understand the acceptance procedure and agree with it.
5. Confidentiality of Information
During the work, you may transmit a lot of important information, including financial indicators. Developers will have access to lists of employees, salary information, your clients, and more. Sometimes, even the fact of software development should remain a trade secret. Therefore, make sure the contractor is responsible for the unauthorized dissemination of this data.
Also, clarify whether freelance employees or freelancers will be involved in the development. And also, whether their contract includes a clause on non-disclosure of client information and work on the project.
6. Additional services
In addition to the main services, sometimes additional services may be provided. For example, software installation on a server may be required. It is better to discuss in advance who will do this, which hosting company will be chosen, the cost of hosting services, etc.
7. Company logos in software
It is normal for the contract to specify that the developer installs their logo/link to the website in the application or on another web resource. This is one of the marketing tools for the development team, and the cost of work is calculated with this in mind. That is, if you ask not to include the logo and link, the overall cost of the work may increase.
The same applies to placing information about the developed product in the developer’s portfolio.
Conclusion
A development agreement is not only legal protection but also a guarantee that the developer and the client understand each other correctly. Do not treat the contract as a mere formality. You are discussing possible nuances and resolving them immediately, which will help avoid misunderstandings and save time and effort in the future.