How to protect the interests of the parties in the contract for the creation of software

  • Tutorial
Today we will consider the main issues that arise in practice when negotiating the terms of an agreement on software development. It is clear that in order to protect the interests of the customer or developer, various provisions can be introduced into the contract, on which its actual execution and the achieved result depend.

Before you begin discussing the terms of the contract for software development, you must determine its form. The previous post will help you with this: “How to choose a contract for software development” . You can familiarize yourself with the forms of contracts and explanations to them here .

After determining the form of a contract for software development, the parties usually have three questions:
1) How to place an order for software development in a simplified manner?
2) What software rights are transferred to the customer and stored by the developer?
3) How to document the transfer of customer software rights?

Below we will consider these issues in more detail.

Placing an order under a software development agreement

For setting tasks for creating software, planning and monitoring their implementation in the environment of developers, various project management systems or e-mail are often used. These tools are understandable and familiar to developers, however, they do not fully provide the necessary legal guarantees in case of disputes under the contract.

This is due to the strict requirement of the law on concretization in the contract for the creation of software for the work performed, including the timing of their start and end. In the absence of such conditions, the contract is not considered concluded with all the ensuing consequences.

Therefore, to give legal force to electronic document management, an agreement on the use of electronic signatures must be included in the considered contract for software development, at a minimum. However, it must be borne in mind that in this case the parties will use a simple electronic signature, which does not protect against the possibility of distortion of information in the electronic document after its signing. For more details, see our material. Legal value of electronic documents .

The best way to ensure the interests of both parties is to sign, as a separate appendix to the contract, the terms of reference, fixing the general requirements for the software being developed, the approximate deadlines for their work and their cost. This will make it possible to recognize the transaction at any possible future conflict. With this approach, detailed work, making refinements and additions within the framework of the approved terms of reference for software development are already possible within the framework of electronic document management.

Software rights under the contract for its creation

In most cases, the customer is interested in obtaining the exclusive right to the software created under the contract in full. To do this, the contract must clearly stipulate a condition on the alienation of rights and a ban on the developer of its independent use. In addition, it is necessary to stipulate the possibility of using the software under any name without reference to the authors and making any changes to it at the discretion of the customer.

When creating software for an order, a developer often uses his own developments (for example, a software kernel or “engine”) that he wants to replicate in the future. In this case, we recommend that you include in the contract for the creation of software the conditions for transferring to the customer only the rights to the software version created under the contract, while retaining the exclusive right to previous and subsequent development by the developer.

Registration of transfer of rights under a software agreement

In order to reduce the risks of the customer’s refusal to accept the work after its adjustment or in the case of a long implementation period, it is in the interests of the developer to include in the contract conditions for the delivery of work at intermediate stages based on acts. Such acts record the amount of work and their cost. Therefore, in the interests of the customer, on the contrary, acceptance of work under the act after their full completion. The exception is the case when the customer finances the development for a long period of time and he needs acts to write off expenses.

In the interests of the developer, agreement in the contract on a clear procedure for transferring the results of work to the customer, including an indication of the transfer procedure (on physical media or via the Internet), the timing of testing and acceptance, the consequences of detecting defects or lack of objections.

The rest of the contract details are like force majeure, confidentiality, and so on. common places are not so important.

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