Software Development Agreement

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What is

Software Development Agreement

 

A software development agreement is an instrument by which the business and the software developer come to a common understanding as to the specifications and functionality of the software, further it sets out the ownership of the software clearly thereby protecting the business from the use of their business model. Therefore, it is very important for a business to protect their business models and trade secrets, which might be incorporated in a software program, through a software development agreement.

FAQs

1. What all should be incorporated in a software development agreement?

A few clauses that require special attention in a software development agreement are:

  1. Scope of work
  2. Timeline
  3. Client information being provided
  4. Ownership
  5. Payments
  6. Confidentiality
  7. Warranty
  8. Support and maintenance

 

2. Which laws regulate software development agreements?

Website development agreements are governed by

  1. Indian Contract Act, 1872
  2. Sale of Goods Act
  3. Copyright Act of 1957
  4. Information Technology Act, 2000
  5. Trademarks Act 1999
  6. Other sectors- specific act depending on the content

 

3. Does entering into a software development agreement automatically transfer ownership of the software program?

Entering into a software development agreement doesn’t automatically grant ownership over the software program. It is however in the best interests of the client that the contract stipulates the transfer of ownership to the client.  However, the software developer may exercise a lien over the software till the payment of the consideration.

 

4. How long do warranties last in software development agreements?

Warranties of software performance are typical in many contracts, in which the developer promises that the software will work the way the developer said it would and will fix it free of charge if it doesn't. Such warranties typically last from 90 days to one year after the software is delivered.