02/02/2024, 10:49 Software Development Agreement - Priori

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Software Development Agreement

Lawyers within our network have agreed to share some of the documents they regularly use in the course of
their practice along with annotations explaining different provisions and outlining decisions you might need
to make. You can contact our lawyers and download a copy of this document.

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Software Development Agreement

Priori Legal

This Software Development Agreement (sometimes referred to as a Master Services Agreement) sets out the
terms on which a developer sells and transfers customized software to a client that will incorporate the
software into its products, services, or processes. A scope of work (also called a statement of work) is
generally added as an appendix, exhibit or rider to the agreement in order to specifically describe what
software is to be developed under the agreement.

A lawyer is available for free consultations through Priori to discuss this document and much more.
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Talk to a Lawyer

This Software Development Agreement (this “Agreement”) is entered into as of

1
[___] (“Effective Date”) by and between
2
______________________________ (“Developer”), a[n]
3
[_________]
4
[________], having a principal place of business at
5
__________________and]
6
_________________ (“Client”), having a principal place of business at
7
______________________. Developer and Client are sometimes referred to in this Agreement individually
as a “Party” and collectively as the “Parties.”

8
WHEREAS, Developer is engaged in the business of computer application development and possesses
certain technical expertise in designing, developing, and testing software and related materials used in web
and mobile applications; and

WHEREAS, Client wishes to engage Developer to deliver certain unique and proprietary software
developed and/or customized specifically for Client (the “Software”) and Developer is willing to accept the
engagement to develop such Software on the terms and subject to the conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein and intending
to be legally bound, the Parties hereto agree as follows:

1. ENGAGEMENT OF DEVELOPER

1.1 Scope of Engagement. Subject to the terms and conditions of this Agreement, Client hereby retains the
services of Developer to design, develop, and implement the Software
9
in accordance with the specifications, requirements, and deliverables (“Specifications”) and the time schedule
described in Exhibit “A” attached hereto and incorporated herein by reference (collectively, the “Work”).
Developer may use employees and/or contractors capable of designing and implementing the Software.
Client will cooperate with Developer’s reasonable requests for information necessary to accomplish the tasks
and objectives for completion of the Work.

1.2 Developer’s Duties and Responsibilities. Developer and Client will jointly define the Specification and
Developer will: (a) Perform the Work in accordance with the Specification; (b) use reasonable efforts to
deliver the Software to Client by the delivery deadline set out in the time schedule described in Exhibit “A”
or as soon as commercially practicable in accordance with the Specification; and (c)
10
assign a project manager who is responsible for managing the day-to-day activities, reporting and resource

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allocation. Developer shall be responsible for delivering and performing only those professional services
specifically identified in Exhibit “A”.

1.3 Changes to Scope. In the event Client wishes to make any modification to the Work, Client must
provide a detailed proposal to Developer in writing specifying the desired changes (“Change Request”).
Developer will evaluate each Change Request at its standard rates and charges. Developer shall submit to
Client a written response to each Change Request within
11
____ (__) business days following receipt thereof (“Change Request Response”). Developer’s Change
Request Response shall include a statement of the availability of Developer’s personnel and resources, as
well as any impact the proposed changes will have on the price, delivery dates, deliverables, or warranty
provisions of this Agreement. Client shall use its reasonable efforts to accept, reject, or propose
modifications to each such Change Request Response within
12
_______ (__) business days following receipt thereof. Upon acceptance by Client of a Change Request
Response and its corresponding Change request, the Work shall be amended by means of a written, jointly
executed, addendum to Exhibit “A” of this Agreement.

1.4 Support and Maintenance. Any support and maintenance services, updates, versions, or new releases
shall be contracted under a separate agreement between the Parties. Maintenance and support rights or
obligations for any third party products or equipment that are used in the Software and are available through
the respective vendors or manufacturers of such content and equipment shall be assigned by Developer to
Client.
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Developer shall not use any intellectual property of any third party in the Software without Client’s written
consent.

1.5 Marketing. Client grants Developer the right to use Client’s name, service marks, and a description of
its services in Developer’s marketing materials or other written promotional campaigns. Either Party may
elect to issue a press release related to this Agreement with prior approval from the other Party, which
approval shall not be unreasonably withheld.

1.6 Independent Contractor. Developer is not an employee of Client. Developer shall not be eligible for
any benefits given by Client to its employees. The Parties are and remain independent contractors. At its
own expense, Developer may use employees or subcontractors to develop the Software or otherwise
complete the Work. Nothing in this Agreement will be deemed to create an agency, partnership, or joint
venture between the Parties. Neither Party has authority to bind the other or incur any liability or otherwise
act on behalf of the other Party.

2. CLIENT RESPONSIBILITIES

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2.1 Assigned Tasks. [Client agrees to perform all of the tasks assigned to Client as set forth in this
Agreement and to provide all assistance and cooperation to Developer in order to complete timely and
efficiently the Work and execute all Change Requests. Client shall be responsible for making, at its own
expense, any changes or additions to Clients’ current systems, software, and hardware that may be required to
support operation of the Software.]

2.2 Acceptance Testing. [Client shall make available such personnel as necessary for testing the Software
and training users of the Software and prepare complete acceptance test data for testing the Software.]

2.3 Lawful Purpose. Client will only use the Software for lawful purposes.

3. ACCEPTANCE OF SOFTWARE

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3.1 Acceptance Test Plan. Client shall, in cooperation with Developer, prepare and be responsible for a plan
for the Client acceptance test (“Acceptance Test Plan”), with acceptance test procedures suitable for verifying
that the Software meets the agreed requirements of the Specification. The Acceptance Test Plan shall
describe how the Client acceptance test will be carried out, and shall contain a detailed description of the
tests to be performed, as well as the acceptance criteria.

3.2 Acceptance Period. Client will have the specified number of days following the date of delivery of the
Software, as set forth in the Specification to inspect, test, and assess the Software and determine whether it
satisfies the acceptance criteria in accordance with the procedures set forth in the Specification. Client
acceptance test shall be performed in accordance with the Acceptance Test Plan.

3.3 Approval. If Client approves the acceptance test, then Client shall give Developer written notice to such
effect without undue delay. The acceptance test is deemed to be approved unless Client has notified
Developer in writing, within
15
_____(__) business days after the test was to be completed according to the Acceptance Test Plan, stating that
it is not approved. The acceptance test is also deemed to have been approved if Client elects to put the
Software into operation before the test has been approved by Client.

3.4 Rejection. If Client refuses to approve the acceptance test, such rejection shall be explained in writing.
If Developer wishes to argue the rejection is unjustified, written notice shall be given to such effect, which
notice shall be given within
16
______ (___) business days.
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If Client still refuses to approve the acceptance test, the dispute shall be resolved pursuant to Section 11.1 of
this Agreement. If Developer does not dispute the rejection, then Developer shall have
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_____(__) business days to send Client a timetable for repairing the errors associated with the Software.
Developer shall give written notice to Client when the repairs have been completed and Client shall promptly
resume its acceptance test. The approval period may only commence when the acceptance test has been
approved by Client.

3.5 Commissioning. The Software shall be put into regular operation after Client acceptance test has been
successfully completed and approved.

4. COMPENSATION AND PAYMENT

4.1 Fees and Expenses.

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Client will pay Developer a fixed fee for the Work according to the payment schedule described in Exhibit
“B” attached hereto and incorporated herein by reference (“Payment Schedule”). A deposit of
20
__________ percent (___ %) of the total amount is required to commence the Work. All payments made to
Developer under this Agreement must be in United States currency. When travel is necessary to perform the
Work, compensation will include reimbursement of all reasonable and necessary travel, living, and out-of-
pocket expenses incurred by Developer in performing the Work. Developer will obtain Client’s approval for
billable travel prior to incurring any expense for such travel. Client will reimburse Developer for the cost of
any development software or commercial software libraries that Developer deems necessary to complete the
Work, subject to approval by Client.

4.2 Overdue Invoices. Developer’s invoices for fees and expenses, if any, shall be due and payable in full
immediately upon receipt by Client. All such fees shall be fully earned when due and non-refundable when
paid. Invoices not paid within
21
________(__) days from the invoice date shall bear interest from the invoice date until paid at a rate of
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____percent (__%) per day or the maximum rate permitted by applicable law, whichever is less. Developer

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may suspend all Work on

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______ (__) days written notice until the amounts outstanding are paid in full. Time is of the essence for all
payments under this Agreement, and
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in the event any payment due to Developer is collected at law or through an attorney-at-law, or under advice
therefrom, or through a collection agency, Client agrees to pay all costs of collection, including, without
limitation, all court costs and reasonable attorney’s fees.

5. TERM AND TERMINATION

5.1 Term. This Agreement is effective as of the Effective Date and will continue in full force and effect until
complete payment for the Work is received by Developer, unless earlier terminated as provided in this
Agreement.

5.2 Termination. Each Party may terminate this Agreement upon material breach by the other Party of one
or more of the terms and conditions of this Agreement, provided that the breaching Party is notified in
writing of the material breach and such breach is not cured within
25
______(__) days after receipt of such written notice. Client’s termination of this Agreement will not relieve
Client of its obligations to pay for any Work performed. If Developer terminates this Agreement due to
Client’s default: (a) Client shall, within
26
_____(__) days of such termination, deliver to Developer all copies and portions of the Software and related
materials and documentation in its possession furnished by Developer under this Agreement; and (b) all
amounts payable or accrued to Developer under this Agreement shall become immediately due and payable.
Termination for breach will not alter or affect the terminating Party’s right to exercise any other remedy for
breach. Client may terminate this Agreement without cause upon
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_______(__) days advance written notice. In the event of termination without cause, Client agrees to pay
Developer for all Work performed up to the date of termination.

6.
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CONFIDENTIALITY

6.1 Client’s Confidential Information. All information relating to Client that is known to be confidential or
proprietary, or which is clearly marked as such, will be held in confidence by Developer and will not be
disclosed or used by Developer except to the extent that such disclosure or use is reasonably necessary to the
performance of the Work.

6.2 Developer’s Confidential Information. All information relating to Developer that is known to be
confidential or proprietary, or which is clearly marked as such, will be held in confidence by Client and will
not be disclosed or used by Client except to the extent that such disclosure or use is reasonably necessary to
the performance of Client’s duties and obligations under this Agreement.

6.3 Survival. These obligations of confidentiality will extend for a

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period of ______ (__) years after the termination of this Agreement, but will not apply with respect to
information that is independently developed by the Parties, lawfully becomes a part of the public domain, or
of which the Parties gain knowledge or possession free of any confidentiality obligation.

7. INTELLECTUAL PROPERTY RIGHTS

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7.1 Work Made for Hire.

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Developer agrees that the development of the Software (but excluding Developer Tools) is “work made for
hire” within the meaning of the Copyright Act of 1976, as amended from time to time, and that the Software
shall be the sole property of Client. “Developer Tools” means the materials, information, trade secrets,
generic programming codes and segments, algorithms, methodologies, processes, tools, data, documents,
notes, programming techniques, reusable objects, routines, formulae and templates that: (a) are developed
prior to the Software and utilized by Developer in connection with the Software; (b) are designed to perform
generalized functions not specific to the particular requirements of Client or the Software; (c) do not contain
any of Client’s Confidential Information or other information or items provided by Client; and (d) cannot
reasonably be expected to provide Client an advantage over its competitors.

7.2 Assignment.
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To the extent any Work performed by Developer does not qualify as a “work made for hire” under applicable
law, Developer hereby irrevocably and unconditionally assigns to Client, without further compensation, all of
its right, title and interest in and to the Software and any and all related patents, copyrights, trademarks, and
trade names in the United States and elsewhere. This assignment is conditioned upon full payment of the
compensation due to Developer under this Agreement. To the extent any of Developer’s rights in the
Software, including without limitation any moral rights, are not capable of assignment under applicable law,
Developer hereby irrevocably and unconditionally waives all enforcement of such rights to the maximum
extent permitted under applicable law. Developer will assist Client in obtaining and enforcing patent,
copyright and other forms of legal protection for the Software in any country. Upon request, Developer will
sign all applications, assignments, instruments and papers and perform all acts necessary or desired by Client
to assign the Software fully and completely to Client and to enable Client, its successors, assigns and
nominees, to secure and enjoy the full and exclusive benefits and advantages of the Software at no charge to
Client; however, Client shall reimburse Developer for reasonable out-of-pocket expenses.

8. WARRANTIES AND DISCLAIMERS

8.1
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Software.
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The Software furnished under this Agreement is provided on an “as is” basis, without any warranties or
representations express, implied or statutory, including without limitation, warranties of quality,
merchantability or fitness for a particular purpose. Nor are there any warranties created by a course of
dealing, course of performance or trade usage. Developer does not warrant that the software will meet
client’s needs or be free from errors or that the operation of the software will be uninterrupted. The foregoing
exclusions and disclaimers are an essential part of the Agreement and formed the basis for determining the
price charged for the Software.

8.2 Performance Standard. Developer warrants the Work will be performed in a workmanlike manner, and
in conformity with generally prevailing industry standards. Client must report any material deficiencies in
the Work to Developer in writing within
34
______(__) days after Client receives the Work. Client’s exclusive remedy for the breach of this warranty
will be the re-performance of the Work within a commercially reasonable time. THIS WARRANTY IS
EXCLUSIVE AND IS IN LIEU OF ALL OTHER WARRANTIES AND ANY ORAL OR WRITTEN
REPRESENTATIONS, PROPOSALS, OR STATEMENTS MADE ON OR PRIOR TO THE EFFECTIVE
DATE OF THIS AGREEMENT.

8.3 No Infringement.
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Developer warrants the Software will not infringe on any copyright, patent, trade secret or other intellectual
property interest of any third party. Developer will indemnify and hold Client harmless from and against all

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such infringement claims, losses, suits and damages including, but not limited to attorney’s fees and costs.
Following any bona-fide claim of infringement, Developer shall promptly correct the Software so as not to be
infringing, or secure (at its own expense) the right of Client to use the Software without infringement.

8.4 No Third Party Warranties. Developer makes no warranty of any kind, whether express or implied,
with regard to any products, software, content, equipment, or hardware obtained from third parties.

8.5 No Other Warranties. THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE ONLY
WARRANTIES GRANTED BY DEVELOPER AND DEVELOPER DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9. LIMITATION OF LIABILITY

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NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES ARISING AS A RESULT OF
OR RELATED TO PERFORMANCE OF THE WORK, REGARDLESS OF THE TYPE OF CLAIM AND
EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, SUCH
AS, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF REVENUE OR ANTICIPATED PROFITS OR
LOST BUSINESS. TO THE EXTENT ALLOWED BY LAW, CLIENT WILL INDEMNIFY AND HOLD
DEVELOPER HARMLESS AGAINST ANY CLAIMS INCURRED BY DEVELOPER ARISING OUT OF
OR IN CONJUNCTION WITH CLIENT’S BREACH OF THIS AGREEMENT, AS WELL AS
REASONABLE COSTS, EXPENSES, AND ATTORNEY’S FEES INCURRED THEREIN.

10. NON-SOLICITATION

During the period of this Agreement and for

37
_________ (__) months thereafter, regardless of the reason or cause for that termination, neither Party will
directly or indirectly engage in any conduct that will substantially diminish the value of the other Party’s
business including, without limitation: (a) solicit or attempt to solicit any business from any of the other
Party’s customers, clients, or prospects; or (b) offer employment to or hire any employee or subcontractor of
the other Party.

11. GENERAL CONDITIONS

11.1
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Governing Law. This Agreement is governed by the laws of the United States and the state of [STATE],
without reference to rules governing choice of laws. If any dispute arises concerning this Agreement, venue
shall be laid exclusively in the state and federal courts of [COUNTY] County, [STATE] which shall have
exclusive jurisdiction over such dispute and the Parties consent to the personal jurisdiction of such courts.
39
If legal action or other proceeding of any nature whatsoever is brought in connection with any dispute arising
out of this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party all
attorneys’ fees and costs incurred by the prevailing Party in connection with such dispute.

11.2 Excusable Delays. Developer shall not be responsible for delays or failures in performance resulting
from acts beyond the control of Developer, including, without limitation, acts of God, strikes, riots, acts of
war, epidemics, fire, communication and power line failures, earthquakes, and hurricanes.

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11.3 Assignment. The rights, duties, and privileges of a Party to this Agreement shall not be transferred or
assigned by it, in whole or in part, without the prior written consent of the other Party. If Client sells its
business to a third party, such consent by Developer will not be unreasonably withheld.

11.4 Entire Agreement; Amendment. This Agreement constitutes the entire agreement between the Parties
concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings
with respect thereto. This Agreement may not be amended except by a writing signed by an authorized
representative of both Parties.

11.5 Severability. In case of any one or more of the provisions of this Agreement should be held invalid,
illegal or unenforceable, each such provision shall be modified, if possible, to the minimum extent necessary
to make it valid and enforceable, or if it cannot be so modified, then severed, and the remaining provisions
contained in this Agreement shall not in any way be affected or impaired.

11.6 No Waiver. Neither Party’s failure to enforce strict performance of any provision of this Agreement will
constitute a waiver of a right to subsequently enforce such a provision. No modification, extension or waiver
of this Agreement shall be valid unless made in writing and signed by an authorized representative of the
Party to be charged. No written waiver shall constitute, or be construed as, a waiver of any other obligation
or condition of this Agreement.

11.7 Notices. All notices, demands or other communications required or permitted to be given under this
Agreement by either Party to the other may be effected
40
either by personal delivery in writing or by U.S. mail, registered or certified, postage prepaid with return
receipt requested. Mailed notices shall be addressed to the other Party at the address appearing in the
introductory paragraph of this Agreement, but each Party may change such address by written notice in
accordance with this paragraph. Notices delivered personally will be deemed communicated as of actual
receipt. Mailed notices will be deemed communicated as of two (2) days after mailing.

11.8 Counterparts. The Parties may execute this Agreement in multiple counterparts, each of which
constitutes an original as against the Party that signed it, and all of which together constitute one agreement.
The signatures of all Parties need not appear on the same counterpart. The delivery of signed counterparts by
facsimile, email or other electronic transmission that includes a copy of the sending Party’s signature is as
effective as signing and delivering the counterpart in person.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized
representatives, as of the Effective Date.

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Exhibit “A”

Specification

1. Description of Software
2. Preliminary Requirements for Software

a. Technical Requirements

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b. Phases in Software Development

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The software development work will consist of the following three phases:

Phase I - Preparation and approval of a software requirements specification document.

Phase II - Development and installation of the software

Phase III - Acceptance and delivery of the software

c. Test Protocols

d. Technical Acceptance Criteria

3. Acceptance Test Plan.

a. [Reserved for a description of how the acceptance test will be carried out by Client]

b. Acceptance test will include the following specific tests:

Function test
Robustness test
Integration test
Capacity and response time test
Review of all documentation
Installation test
Test of operating procedures

c. [Reserved for a description of the acceptance test criteria]

d. The acceptance test will be based on the following definition of errors:

LEVEL CATEGORY DESCRIPTION

A Critical Error Error that results in the loss of data or

other functions of critical importance
to Client not being delivered or not
working as agreed.
Documentation is incomplete or
misleading, which results in Client
being unable to use the Software.

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B Serious Error Error that results in functions of

importance to Client not working as
described in Specifications, and which
it is time-consuming or costly to
avoid.
Documentation is incomplete or
misleading, which results in Client
being unable to use functions that are
of importance to Client.

C Less Serious Error that results in individual

Error functions not working as intended, but
which can be avoided with relative
ease by Client.
Documentation is incomplete,
imprecise or easily misunderstood.

Time Schedule and Milestones

Milestones Description Milestone Planned

Criteria Date

M0 Start Project Budget Release <dd-mm-

yyyy>

<milestone description> <dd-mm-

yyyy>

M1 Start Planning <dd-mm-

yyyy>

<milestone description> <dd-mm-

yyyy>

M2 Start Execution <dd-mm-

yyyy>

<milestone description> <dd-mm-

yyyy>

M3 Confirm Execution <dd-mm-

yyyy>

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Milestones Description Milestone Planned

Criteria Date

<milestone description> <dd-mm-

yyyy>

M4 Start Introduction <dd-mm-

yyyy>

<milestone description> <dd-mm-

yyyy>

M5 Release Product <dd-mm-

yyyy>

<milestone description> <dd-mm-

yyyy>

M6 Close Project <dd-mm-

yyyy>

Exhibit “B”

Delivery and Payment Schedule

1. Charge for Software Development Work. The fixed price for the design, development, and
implementation of the Software is $ ______ USD.

2. Terms of Payment. Client agrees to compensate Developer as follows:

Deliverable Description Percentage of Fixed Price

Deposit on signing this Agreement

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_____%

Payment on installation of Software

44
_____%

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Payment on Acceptance of Software

45
_____%

3. Delivery and Payment Schedule. Client agrees to compensate Developer for its efforts in accordance
with the following schedule:

Delivery and Payment Schedule

Deliverable Description Payment Estimated Delivery Payment Due

Amount Date Date

1
About This Document

Insert date of agreement.

2
About This Document

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Insert business name of software developer. This form assumes developer is a business entity. If developer
is an individual, it’s important be sure that the relationship you cultivate doesn’t result in an unintended
employer/employee relationship. Employment counsel can assist you on ensuring the developer’s
independent contractor status is protected.
3
About This Document

Insert the state in which developer’s company is organized.

4
About This Document

Insert type of entity (e.g. corporation).

5
About This Document

Insert business address of developer.

6
About This Document

Insert business name of company purchasing the software.

7
About This Document

Insert business address of client.

8
About This Document

Recitals like this are generally included to provide a basic description and context for the transaction. A
lawyer can assist you with drafting the appropriate “whereas” clauses for your specific facts and
circumstances.

9
About This Document

This form assumes the specific details of the work performed by developer will be set out in a schedule. A
lawyer can discuss whether including this information in an appendix or exhibit is appropriate for your
specific situation.

10
About This Document

The clause requires that only the developer appoint a project manager. Depending on the circumstances, it
might be advisable to have an independent project manager appointed by each party. A lawyer can help
determine whether both parties should use a project manager and whether additional duties, disclosures, and
terms should be included.

11
About This Document

Insert desired length of time.

12
About This Document

Insert desired length of time.

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13
About This Document

In this form, developer is directed not to use third party materials, which decision, in general, is made to help
avoid ownership complications. If the Parties wish to permit third party materials, a lawyer can help you
draft language that sets out the terms on which third party materials can be used and licensed.

14
About This Document

These paragraphs set out an example of the tasks and duties that may be assigned to the Client and will vary
depending on the Client’s technology expertise and staffing resources. A lawyer can help determine the
scope of the language necessary here based on the extent of the obligations the Client can perform.

15
About This Document

Insert desired length of time. Generally, these time periods are determined according to what is customary in
practice in situations similar to yours. A lawyer can help you determine a reasonable length of time before the
acceptance test is deemed approved.

16
About This Document

Insert desired length of time. Generally, these time periods are determined according to what is customary in
practice in situations similar to yours. A lawyer can help you determine a reasonable length of time before the
acceptance test is deemed approved.

17
About This Document

The Parties may want to identify a specific remedy for unsatisfactory software. A lawyer can help discuss
such remedies, discuss the implications, and draft the language describing the terms of the remedy.

18
About This Document

Insert desired length of time. Generally, these time periods are determined according to what is customary in
practice in situations similar to yours. A lawyer can help you determine a reasonable length of time before the
acceptance test is deemed approved.

19
About This Document

This section illustrates a fixed-fee arrangement. Consider discussing with a lawyer when a party wants
payment on a time-and-materials basis.

20
About This Document

Insert deposit amount as a percentage of the total price.

21
About This Document

Insert desired period of time for payment of invoices. While 30 days is a standard length of time, it can be
longer or shorter depending on the client’s credit history.

22
About This Document
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Insert desired interest rate. Many agreements use 2%; a lawyer can help you understand any restrictions or
limitations imposed by law.
23
About This Document

Insert desired notice period. Common notice periods are 10, 14 and 30 days. A lawyer can help determine the
length of time that will best protect your interests and the relationship with the Client.

24
About This Document

This is a unilateral prevailing party clause limited to actions for fees in order to make it financially feasible
for developer to attempt to collect unpaid amounts. A lawyer can help determine whether this clause is
advisable.

25
About This Document

Insert desired period of time for other party to cure a breach. While 30 days is a standard length of time, it
can be longer or shorter.

26
About This Document

Insert desired period of time for client to return software to developer in the event developer terminates
agreement based on client’s default. A lawyer can discuss options.

27
About This Document

Insert desired period of time for client to provide advance notice of termination without cause. A lawyer can
help determine whether this provision should be included and a reasonable length of time. Consider
discussing this provision with a lawyer when developer does not want client to terminate the agreement for
any reason or no reason.

28
About This Document

Confidentiality needs and concerns can vary significantly from company to company. This section illustrates
one approach to confidentiality clauses, but the clause you use should be tailored to your company’s specific
situation. In the event there is concern about privacy and security of confidential or proprietary information,
discuss with a lawyer whether to enter into a separate confidentiality and non-disclosure agreement.

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About This Document

Insert desired length of time for parties to keep each other’s information confidential. Discuss with an
attorney the categories of information that may need to be protected and whether the obligations of
confidentiality should survive in perpetuity or some other length of time.

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The developer’s agreement to this “work made for hire” clause does not necessarily mean a court would
agree. If the software does not fall within 1 of 9 categories listed in Copyright Act, it is not a “work made for
hire.” A lawyer can discuss whether the software is in danger of not being held as a “work made for hire”
and can advise on appropriate language for your situation.

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This provision is an assignment of the installed software and does not expressly include source code, which
raises the issue of how client will maintain the software if developer is no longer available to support the
software. A lawyer can discuss whether a source code escrow agreement is advisable and the specific terms
of such an agreement.
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The determination of whether software is a “good” or a “service” under the UCC varies by state and depends
on the facts in determining the extent that UCC warranties will extend to the sale of software in a legal
dispute. A lawyer can discuss the likelihood of enforcement of desired warranties and draft appropriate
language.

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No warranties in the software are provided by developer. A lawyer can discuss types of warranties typically
included and whether alternate language is appropriate to provide limited warranties.

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Insert a period of time in which client must report material deficiencies to developer. A lawyer can help
determine a reasonable length of time that meets the needs of the parties.

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This provision is the extent to which developer will guarantee that the software will not infringe on third
party IP rights. A lawyer can discuss whether these guarantees are sufficient based on the
circumstances. This provision will vary depending on the circumstances. Discuss with a lawyer when
developer does not want to indemnify client if the software does infringe on third party IP.

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This sample limitation of liability provision is for the benefit of both parties. In some instances only one
party’s liability is limited and in other instances, liabilities are not limited at all. A lawyer can help select the
best formulation of this provision based on the circumstances and help negotiate accordingly.

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Insert the desired period of time. Discuss with a lawyer enforcement of non-solicitation provisions under
applicable state law.

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Consult a lawyer as to which state’s laws to apply and the appropriate venue.

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This mutual prevailing party clause can be a double-edged sword. Without this clause, each party is
responsible for its own legal costs under the American Rule. Consult with a lawyer to determine whether this
clause is in the party’s best interest.

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Some parties elect to expand notice options to include email.

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Litigation often arises over perceived differences between what was delivered and what was promised.
Exhibit “A” (sometimes called an appendix, scope of work or SOW ) outlines specifications that may be
included in order to enhance clarity. The parties must determine the terms of the specification and timeline
with specific attention to scope, functionality, delivery dates, and price. A lawyer can help draft specifications
that clearly describe the work required to be performed under the contract.

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This subsection sets out an illustrative list of phases that may be included. The typical phases are: Analysis,
Design, Development, System Testing, Acceptance Testing, Stress Testing, Implementation, Post-
implementation, and Warranty.

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Many agreements include a deposit amount of 30%.

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Many agreements include a payment on installation of 40%.

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Many agreements include a payment on acceptance of 30%.

Disclaimer This form is a sample that has been prepared for general informational purposes only. Nothing
contained in the form is legal advice, nor does it create an attorney-client relationship with either the drafting
attorney or Priori Legal. You are encouraged to seek your own legal counsel to review the form, customize it
for your business and obtain advice on its general applicability prior to use.

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