There are many different scenarios under which a developer contracts with a client to create a piece of software. The developer may be an independent contractor creating software for an individual or a company under a one-time contract. In another setting, the developer may be an employee of the client, who either uses the software or sells it to third parties. In any case, a comprehensive software development agreement can help all parties clarify their rights and obligations. Whether you are a developer or a client, an effective agreement will assist you in avoiding disputes and in completing the project smoothly.
Ask Your Lawyer
Depending on the nature of your project and your relationship with the other party, your agreement may range from simple to extremely complex. You do not necessarily need a lawyer to come up with an effective document; however, it is a good idea to consult one to ensure that your contract covers all relevant points.
One major point that should be addressed by a software development agreement is the issue of copyright ownership. Unless otherwise specified, the owner of the copyright to a piece of software is the person who created it. The developer and the client may choose to assign ownership otherwise. If so, this must be clearly and specifically set out in the agreement.
Work for Hire
A common scenario is work-for-hire development, where the developer is the client’s employee. Work-for-hire employment agreements will typically assign all copyrights to the employer, and individual contracts are not needed for each project. In another case, the developer may be working on part of a larger project along with other independent developers. In such cases, the agreement will usually give copyright ownership to the client.
Transferring or Licensing Ownership
When both client and developer are independent business entities, agreements will vary according to their needs. While there are times when the parties will decide to let the client have complete ownership, most developers will not favor such an arrangement. It is more typical for the developer to retain ownership while allowing the client a license for software use. In each case, parties should agree on terms that are most suitable for both of them and customize their agreement accordingly.
Copyright Warranties
If you are contracting with a developer to create your software, you will also want a comprehensive warranty that includes potential copyright issues. In addition to assurances that your software will work as promised and that problems will be fixed, you will want to know that the developer actually does own the software copyrights and is therefore authorized to license or transfer them to you. You also do not want to receive software that may turn out to potentially infringe a third party’s copyright or other type of intellectual property. If you wish these concerns to be addressed, make sure your agreement contains title and non-infringement warranties.
Dispute Resolution
If copyright disputes do arise, it is best for your contract to set forth provisions for resolving such disputes. Intellectual property issues are tried in federal court, which can entail a lengthy and costly process. For this reason, many software development agreements contain provisions for alternative dispute resolution such as arbitration or mediation, which can cut down on expenses and formal procedures.
When it comes to software development contracts, both client and developer are interested in ensuring that the project goes well and is completed to everyone’s satisfaction. In order to avoid misunderstandings and future disputes, it is important to address all relevant points in detail. Among the issues that your agreement should include, copyright ownership is highly important. There are many options for assigning copyright ownership for software, including temporary or partial ownership. The parties should decide which is best for them and be sure that their agreement is clear on this point. As with any contract, the client and developer should each have an attorney review the proposed document and address any problematic areas.
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