What is a Software Development Agreement?

Before we get familiarized with the agreement document, we should define what is software development first. Well, software development simply refers to the process through which programmers create or develop computer programs. It also consists of various phases that provide a way for creating products that fulfill technical criteria as well as user needs. Any other activities that can result in software products can also be classified under software development. These activities include research and development, modification, maintenance, and re-use.

A software development agreement is a legal document that refers to an agreement made between software developers and their clients or end-users. The agreement provides the important terms and conditions to abide by in the midst of the performance of the software development agreement. Having this document is handy because it serves as a stepping stone for developing a great professional relationship between the parties involved and it also protects them from any type of legal repercussions.

Important Parts of a Software Development Agreement

Here are some of the key parts/clauses that should be included whenever drafting a software development agreement:

Complete Work Schedule. A complete work schedule should be included when making the agreement since it specifies when the software team will finish a body of work. It also sets to divide a project into separate milestones. They list deliverables as well as their deadlines. When you properly specify work schedules/stages in an agreement, you avoid customer dissatisfaction and undesirable implications such as breach of contract lawsuits.Terms for Payment. Why should this be included in the software development agreement? Simply put, establishing payment times and payment amounts ensures that you will not have to wait for payment. Paying attention to payment details will help you get paid faster.Ownership/Intellectual Property Rights. This can be a delicate issue to walk on when it comes to defining it in the agreement. Unless a contract specifies who holds the intellectual property, it would be assumed to be the inventor. It would be your development team in the context of software development projects. For example, owning the IP might pose problems to the customer because they do not own the copyright, and as a result, they may be unable to expand the scope of the product. It may cause problems if your customer has the copyright signed over to them. For example, you won’t be able to reuse any project-specific code in other, unrelated projects.Usage of OSS. OSS refers to open-source software. Most developers often take advantage of these whenever they develop applications. That being said, it also needs to be included in the document since your client may want a complete list of the libraries used during the application’s development. They may also want to know that the developer fulfills the standards for using that portion of open-source software. When it comes to audits or due-diligence checks, not having something properly written down might make things difficult for your client.Warranty and Indemnity. This clause is also a common element in any other type of agreement. Why should it be included here, you may ask? Well, in order to distribute risks in the event that something goes wrong, the developer and the customer should agree on warranties and indemnification in the software development agreement. Because technologies are continually evolving, developers should avoid making assurances that their programs will perform indefinitely.Confidentiality Terms. As is the case of all agreement documents, one of the most critical parts of a software development agreement is confidentiality. Because the customer must submit data or information to the programmer in order for the program to be created, rigorous confidentiality restrictions are required to secure the client’s sensitive information. In order to prevent future breaches, a liability clause for any breach of private information or requirements with a high penalty should be included.Testing. The needed testing should be included in the software development agreement. Testing is a separate part of development in certain software development approaches. If the client has sought a decrease in the testing phase, you should document it. Furthermore, you should also take notice of whether your customer has a special QA procedure that should be included in the testing. Your agreement should spell out the consequences should the customer fail to test something you’ve requested them to.Support Terms. If you intend to continue supporting the software project you’ve embarked on, your agreement must specify how you intend to do so. You should specifically describe what assistance channels are available. Phone and email are two of the most often used support methods. Your agreement should specify the kind of assistance you are ready to give. To summarize this section, a good software development agreement specifies where support ends and feature development begins.Maintenance. This clause can also prove to be an important one in a software development agreement. Maintenance services are concerned with keeping things up to date. If you include continuous maintenance, your agreement should specify what is considered regular maintenance and what is considered extra labor. Minor changes to program dependencies may be included, but not important upgrades. Sections may occasionally need to be reworked as part of a security upgrade. It would be preferable if you detailed how security upgrades may affect the project. After the project is completed, you may earn money by providing support and maintenance.Terms for Termination. This clause of the software development agreement should outline different terms in case both parties want to terminate the agreement. It also covers the way in which termination can happen, what will happen to any due balances, and any provisions of the agreement that can continue long after the termination date. Sure, no parties prefer to end an agreement earlier than usual but by outlining specific guidelines, confusion can be avoided.Guidelines for resolving disputes. The dispute resolution portion of a software development agreement, or any agreement, addresses how any party may initiate a dispute. It is critical to outline which laws apply in this case, as well as the nation of the legislation. The nation specified in the agreement will have a significant impact on which laws apply, which can be used or referred to when in a dispute. Keep in mind that taking the time and effort to fully describe the dispute resolution procedure can save you money and more trouble in the long run.

Types of Software

From time to time, you may encounter different types of software as an end-user or as a developer. This section of the article discusses some of the types of software you may see:

System Software. What does system software do? To put it simply, system software serves as a foundation for other software and comprises applications that administer the computer, such as the operating system, file management utilities, and disk operating system (or DOS). The system files include function libraries, system services, printers, and any other types of hardware drivers, system preferences, and other configuration files.Firmware. What does firmware refer to? It is a type of software that is stored on the motherboard or chipset of a computer. Its role is to guarantee that the equipment operates properly. When you turn on your laptop, for example, the motherboard BIOS (which stands for Basic Input Output System) starts everything up. It scans the disk for problems before determining whether or not the operating system is there. If this is the case, control is transferred to the installed operating system.Programming Software. Speaking of software development, programming software is needed. What is it? It is also often known as a programming tool or software development tool which is a program that helps software developers or programmers create, debug, and manage other programs and applications. System software is considered a subset of programming software.Shareware. Shareware is a sort of software that is open to use and distribute for a limited time. The limited-time period serves as an assessment period during which you can test any or all of the features before deciding to purchase. The most significant advantage of shareware is the restricted trial duration compared to immediate commitment to purchase.

Steps in Software Development

How is software usually developed? Well, here are the major steps that a developer usually uses as a guide whenever a new type of software enters development. There are usually steps that are unique to the type of software being developed, with the ones listed below is the general steps.

  • 1. Identifying the Needs

    This is always the first step when it comes to effective software development. It refers to the stage where the most amount of brainstorming takes place. Prior to developing software, the company involved must conduct a significant amount of market research with the purpose of assessing the feasibility of the product. In this initial step, developers must determine the capabilities and services the program should provide in order for its intended users to get the most out of it and find it essential and valuable.

  • 2. Analyzing the Requirements

    After identifying what is needed in the development process, it is now time to conduct an analysis of the requirements. In this step, the stakeholders of the parties involved in the software development agreement decide and agree upon the requirements and specifications (both on the technical side and the user side) with the purpose of achieving the goals that are set. This step also gives a clear explanation of each item, the scope, the activities that the developer should undergo, and the testing conditions required to provide a quality result. This is also the stage at which programmers decide on a software development strategy.

  • 3. Designing

    This is the step where the software architects and developers use a document called the design specification document to produce sophisticated technical specifications they need to construct software to requirements. The levels of risk, the composition of the development team, the appropriate technology to be used, time, money, project restrictions, technique, and architectural design will also all be discussed in this step.

  • 4. Developing and Implementing

    This is the step that happens after the designing phase of software development. In this step, the software developers begin to write the software code based on the product specs and needs that were agreed upon in the previous steps. Front-end developers design interfaces and back-ends in accordance with corporate policies and requirements, while database administrators produce necessary data in the database. The code is also tested and reviewed by the programmers. When the code-writing process is finished, the product is then deployed to an environment in the implementation step. This enables the developers to test a pilot version of the application to ensure that it meets the criteria they set.

  • 5. Testing

    After the implementation step, testing then happens. Before delivering the program to consumers or the end-users, the testing process inspects it for defects and ensures its performance. During this stage, specialist testers validate the product’s functionality to ensure that it meets the criteria that were agreed upon. Exploratory testing is used by testers who have prior expertise with the program or a test script to check the functioning of specific components of the product. As they detect valid flaws, debugging happens and the process repeats until the developed software is free of glitches and hiccups.

  • 6. Deploying

    As the debugging process concludes and the developers deem the software to be ready for release, the developers will be able to distribute it to clients. Following the release of a program’s commercial version, the software development business then proceeds to establish a maintenance team to handle any type of difficulties that customers may have while using the product. If the problem is small, maintenance can be performed as a hot-fix, but significant software problems will necessitate an upgrade for a fix to happen.


What is the role of a Software Developer?

The role of a software developer is essentially in the name itself. They develop different types of software from the favorite editing application you use down to the video game you spend countless hours on. Software developers can also focus on a massive number of networks, which makes them a Systems Software Developer. Generally speaking, a software developer will assess what the end-user or the customer needs and develop software according to what they need.

What is the difference between Software Development and Web Development?

The difference between software development and web development is that software development is concerned with the applications or programs used in computer systems, and the individuals in charge of this process are referred to as software developers. Web development, on the other hand, is concerned with the creation of interactive web pages via the use of coding and markup. Web developers are the individuals in charge of this procedure.

What is System Software?

System software is a type of software that refers to the program that is utilized by your computer for the purpose of translating the input commands into a language that the machine can accurately interpret or read. Also known as an operating system (OS), system software will take control of a computer’s hardware components once it has been booted up. Personal computers, web servers, and proprietary systems make use of this type of software for their operations.

Overall, while it may be generally frustrating to realize that both parties will have to contend with a heap of legal documents just to establish a working relationship, they should realize that having documents such as a software development agreement will only benefit their professional relationship in the long run. In this article, examples of well-constructed software development agreements are readily available for you to acquire in case you need an example.