Software Development Contracts 101

If you’ve decided to outsource a software development project and now need to sign a contract, here are a few basic things to keep in mind. This is not legal advice, rather it’s compilation of a few things I found helpful for my own experiences.

First, make sure your project is well-defined. If you are having an e-commerce application developed, see that your development contract clearly states all of the functionality and the user interface (UI) completely. It is also good to clarify what process your developer will use throughout the process. This way you can easily monitor your project’s progress. By explicitly detailing your project, you are more likely to have your project completed correctly and in a timely fashion. As part of this process, make sure you define the documentation process. Clear and accurate documentation is a necessity, and without it your project can easily become bogged down.

Secondly, you are going to want to cover the software’s licenses. Who owns the work product? Is the software completely proprietary? What, if any, open source software projects are going to be used to help piece your project together? If you do not completely understand all of the license issues for your software, make sure you retain legal counsel.

Thirdly, ensure that the payment process is clearly spelled out. Check into what assurances you will receive from your software developers as to their financial viability. I had a project that was completely lost when our development firm was sued by a prior client and subsequently went bankrupt. These are important topics that should be addressed with your developer before committing to a business agreement.

Confirm that you have a warranty on your product. Code breaks. Make sure you have some reasonable expectations that your product will be reliable for a reasonable amount of time.

If this is your first time getting involved with a software development contract, make sure you use professional assistance. I would not suggest writing a software development contract on your own. Best of luck on your project and remember: you’ve turned to the experts to create your software. You might as well use experts to make sure your contract is also done correctly too.

What To Do When a Breach of Contract Occurs

Material Breach?

Breaches of contract can often turn into a confusing maze of questions and legal concerns, leaving you feeling lost and full of questions: What can I do when a contract has been breached?  Who do I turn to?  Where do I go from here?

First off, you have to be sure that there is, in fact, a breach of contract.  Once you determine if there is a breach; you have to assess to what degree or extent the contract has been breached.  Is it a minor breach?  Is it a material breach?  Is it a fundamental breach?  Is it an anticipatory breach?

Who do you turn to?  Well, that depends on more factors that cannot be easily redressed in a simple blog post.  If you have a decent understanding of your principle contract and the matter is, at most, a few thousand dollars, representing yourself in small claims court might be the best course of action. An attorney can provide counsel to help you determine if small claims court is right for you. If the matter is for a larger sum of money, for a slander issue, or if the issue(s) pertain to intellectual property rights, your first course of action should be to retain counsel.

If you decide to go it on your own, here are a few simple suggestions.  Again, this is not legal advice.  Determine where in your contract breaches have occurred.  Call those breaches to the attention of the party in breach.  Be sure to create a paper trail.  Do not make any inflammatory statements or any statements lacking facts or proof.  The last thing you want to do is make slanderous statements or accusations and exacerbate the situation.  Keep a cool and level head and if you are not able to come to an amicable resolution, turn the issue over to professionals.

Remember if you have a well written, solidly binding contract you should never find yourself with any breach-of-contract issues.  Planning and forethought go a long way.  Finally, avoid legal battles whenever possible. Long legal battles will only hurt you in the end.