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Software Development Agreement

Software development agreement comes into play when a software developer agrees to develop a software, application, or website for someone else, as per the requirements of such other person.

Parties involved:

  • First party or client

    First party is the client who appoints a software developer. This can either be an individual or a company.

  • Second-party or developer

    Second-party is the developer or a company with such a developer who is willing to create a software, application, or website based on the concept and requirements of the client.

Essentials of a software development agreement

Duties of the developer

The software development agreement should mention all expected responsibilities and duties of the developer. If the software is being developed by a development company then the agreement should also place the responsibility of fulfillment of obligation by the developer(s) on such company.

Delivery details

It should lay down the details like timeline for development completion, acceptance period i.e., the number of days after delivery that the client can take to monitor and assess the software, application, or website before acceptance or rejection, support to be provided by the client, etc.

Onboarding and maintenance

It should also include the responsibilities of the developer post-delivery, like training and onboarding of the client and its employees, if any, duration of support and maintenance to be provided by the developer, etc.

Developer’s warranties

It should include the developer’s warranties or guarantees like the software, application, or website developed does not violate any third party rights and/ or agreements,e especially in case of any third-party API integrations, they are free of any bugs, defects, or errors and would be rectified by the developer if identified.

Confidentiality and IP-Protection

It should include a confidentiality clause where the developer promises not to disclose any information regarding the client, its operations, or customers to a third party. The developer should also agree not to create copies of the software or to publish the same. Moreover, it should specify that any Intellectual Property owned by the developer regarding the software, application, or website being developed for the client like the design, including the UI/UX, code, etc. shall be assigned to the client.

Dispute resolution and governing laws

It should explicitly mention the State and jurisdiction of courts and applicable laws in case of any dispute arising out of this agreement. It can also include an option for arbitration to amicably settle any disputes without having to go for litigation.


Why do you need a software development agreement?

  • Clarity and transparency
    A software license agreement clearly lays down the roles and responsibilities of both parties. This helps in a clear expectation setting and thus helps enhance the productivity of the parties.
  • Safeguards the interests of both parties

    It ensures that the developer works as per the terms and requirements of the client and also ensures that the client does not exploit the developer, beyond the scope of work as defined in the agreement 

  • Accountability

    It lays down a redressal mechanism in case of any dispute arising out of the engagement and the agreement. This thus increases accountability and motivates both parties to stick to the terms of the agreement.

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Are you one of these?

  • Someone looking for developers to execute your unique software or application idea
  • A business owner wanting to create a website
  • A young business in need of hiring developers
  • A developer looking to create software, applications, or websites for someone else

Do you relate to any of these statements?

  • Your requirements as the client are unique to your software concepts and business
  • You want to protect yourself from future losses and liabilities

Then you definitely need a customized software development agreement and not just a standard template.