What Is a Development Contract?

A development is a business contract where two or more parties enter into an agreement to create a common goal and/or output. The output may be anything from a product to an event. The development process is then outlined and detailed explicitly in the contract.    

In a 2019 article published by Rasmussen University, web development jobs are seen to increase 15% all the way through 2026. Web developers can be offered various job positions and roles such as front-end developer, back-end developer, user experience designer, user interface developer, and software developer. 

Examples of Development Contracts

Development is a broad subject that can cover various subtopics. Many are familiar with web or software development in the IT industry; but that is only one possible interpretation of development. The following examples below are forms of development that may also require an official contract:   

Website Development: Whether you’re a small, medium, or established business, websites are a crucial requirement to keep businesses competitive and afloat these days. If a company does not have the manpower or in-house specialists to create an official website, the most practical thing to do is to outsource the service. A company can tap another company that specializes in web design; or it could also engage the services of a freelancer. For instance, a small pizza parlor chain decides to put up a website to organize their information and improve their customer relations. They hire a freelance web designer to do everything. Everything that is required is covered and detailed in the development contract between the pizza chain and the freelancer. Career Training: Professional development is a conscious choice for some people. Not all workers and yuppies actively work on or are intentional when it comes to their career growth. Others believe professional development is not only a goal to be achieved, but it’s a lifestyle that must be constantly fed. Career development and training as a trade is becoming popular because it addresses the needs of various people who seek improvement and development in their chosen fields and careers. A person may engage the services of a trained or licensed career coach. A development contract is needed not only to manage each party’s expectations and goals, but to safeguard the interests of both client and coach. Visual Artist: Museums and galleries sometimes contract independent artists and sculptors. Art installations and exhibitions are often billed as highlights of various art shows and galleries. The visual artists behind these works of art usually are tapped as the developer that helps the client (e.g., art gallery) produce a showcase or event. The duration of the exhibit, show dates, scope of work and its limitations are all included and noted down in a development contract. Musical Artist: Much like a visual artist, the musician’s talent is the service to be rendered and the overarching subject of a contract agreement. When a company or client sees the potential of a musical artist and decides to sign the individual or group for their talent, the latter can be subject to all kinds of development programs and training to boost or help refine their talents. A development contract can cover all kinds of stipulations for a musician; these may include but are not limited to fixed record deals, regular training and boot camps, roadshows and tours, vocal lessons, etc. Product and Business Development: In many corporations, having a business development department or team is quite common. These teams are in charge of brainstorming new product ideas, coming up with alternative strategies, tapping new markets, fostering new deals, and all kinds of tasks just to propel the company or business forward. However for some people, they may not have the luxury or resources to have a product development team of their own. Others may choose to outsource their business development needs. In these cases, the company or client engages an external party to develop products, refine business practices, or simply contribute to the company’s expansion and growth. For instance, a young and upcoming entrepreneur wants to develop her own organic and cruelty-free makeup line. She lacks the machinery and resources to actually create the products. The entrepreneur can contract the services of a manufacturing company that specializes in hygiene and personal care products. Because both parties are basically entering into a business deal, a contract is needed to establish the development of the makeup line.

Features of a Development Contract

Depending on the type of development, a contract can contain several parts. Some are applicable across the board; while other features are specific to a certain field. The following are basic examples of components or features that are usually found in a development contract:

Responsibilities: One of the basic requirements in any major contract is the definition of responsibilities. A contract is a binding agreement that two or more parties enter into. It is important to define the roles and functions of each party, like in any contract. The company or client engaging the services of a developer would need to specifically outline what is expected of the latter and what output is to be delivered. On the other hand, the developer would also need to get a clear picture of what kind of support the client is willing to provide or what costs need to be shouldered. All of these should be taken into consideration in any development contract, not just for website development. Termination: Conflict and disagreement are sometimes inevitable. Even if the development contract is written to ensure both parties are on the same page, it’s not unlikely some form of contention may come up somewhere along the process. In the event that this happens, the document needs to explicitly state what the grounds for cancellation or discontinuation of contract are. For example, if one party fails to deliver what is expected within the fixed time period, the other party may terminate the agreement altogether, if it is stipulated in the contract. The termination clause of the contract must also be able address the contingencies on what to do if and when either party is unable to hold their end of the bargain. Duration: A contract is rarely long-lasting. If it is, it’s mostly because the agreement is subject to renewal and modification. For this purpose, the duration and term of a contract must always be included. Both a clear beginning and an end must be firmly established. In the case of a software development contract, the client is able to dictate the deadlines and project term. The developer may be given only a year or two to finish the overall design and output. Setting a clear due date will not only help achieve goals more efficiently, but it may also help promote urgency and accountability. Services and Scope of Work: This component of a development contract delves deeper into the definition of responsibilities. It’s always best to include a comprehensive list of the services to be rendered and offer clarity regarding the deliverables. Dutifully delineating the scope of work will set proper boundaries and promote professionalism within the business relationship. For example, if a web designer is tasked to create a website for a small business owner, the agreement limits the developer’s role to merely designing, creating, and launching the website. Once the site is complete and launched, the owner cannot demand the web developer to constantly maintain and run the website. Schedule or Timetable: Aside from the term duration of the contract, it is also good to include a detailed schedule and time frame to serve as a guide for fulfillment of obligations. For instance, if an art gallery hires a freelance visual artist to install his works or paintings, the development contract should always indicate the date and time of ingress, as well as egress. This aids the fulfilment of deliverables in a more concrete and organized manner. It will not only serve as a general reminder to both client and developer, but it will help the project move forward smoothly. Fees and Terms of Payment: Compensation is a basic feature of any contract. Because it is a formal exchange between parties, one party may owe the other in exchange for services rendered. It’s important to break down the various fees and payment terms plainly and clearly. Identify and enumerate all professional fees, service charges, late fees, and other miscellaneous fees. Indicate the method of payment and guidelines for deposit. Some developers require a security deposit or a down payment before starting a project; they are then paid the full amount upon completion of service. Others allow quarterly or bi-weekly payments, depending on the fulfillment of deliverables. Ownership: When it comes to product development, the issue of ownership can sometimes be a contentious one. Who owns the final output once development is complete? Who gets to claim ownership once the job is done? Intellectual property can cover a multitude of areas such as design, names and trademarks, inventions, and other artistic or literary works. In some cases, the developer who does the actual work can turnover and sign the licenses or rights over to the client.

How to Create a Development Contract

The content of your development contract will vary depending on type, field, or needs. To make it simpler and more convenient, use an existing template and just input the necessary details. Follow the steps below to ensure a no-nonsense and straightforward contract.  

Step 1: Decide on the Type and Format of the Contract

What kind of development contract are you going to engage in? The format of the agreement will highly depend on the type of contract. In general, most legal contracts and official documents follow certain guidelines. Always give your contract a title. Assign the appropriate wording and make sure you are using the standard fonts, spacing and margins. If you’re unsure of the format and legal jargon, try using a sample template to get started.     

Step 2: Introduce the Parties

Like in any contract, always introduce the parties concerned. In the case of development contracts, the parties are normally labeled as the company (or client) and developer. Make sure to indicate the complete name and business address of each. Lastly, include the date when the pact was made and signed. 

Step 3: Enumerate the Terms and Conditions

In the same way the body of an essay contains the main points and key ideas, the body of a development contract contains the general terms and conditions of an agreement. A good way to state your stipulations is by numbering them or categorizing them into sections. For example, a subheading can be labeled ‘Payment Terms’ in bold characters; under this are your guidelines regarding compensation and each are numbered accordingly. You want your conditions to be as specific as possible. Avoid leaving any room for ambiguity because it can be a cause for future contention.   

Step 4: Have the Document Notarized 

The last step is optional. Once all parties have agreed to the terms and affixed their respective signatures, you can further certify the document by having it notarized by an attorney. This is to ensure authentication of both parties’ identities and their willing consent to enter into an arrangement.


What is included in a development agreement?

A development agreement can vary depending on the type of arrangement made. But generally, the agreement will contain the scope of work and an outline of roles and responsibilities. In order to manage expectations on both ends, specific deliverables must be indicated along with their corresponding timeline and due date. The usual legal clauses like confidentiality, termination, severability, and the like may also be inserted in the development agreement.

How does a development agreement work?

A development agreement is essentially a service contract between a client and a developer. The former engages the services of the latter to create a product, launch a website, build a brand, or even improve oneself and one’s career. Development can come in different phases and can cover various stages such as planning, testing, branding, reviewing, launching, and modification.

What is a software development contract?

A software development contract is a partnership agreement between a company and a software developer. A company may have an abstract idea but would need the expertise and resources of a software developer company to bring their ideas and plans to life. One popular example is mobile app development. A client company can outsource and engage the services of a software developer to help the former create an app for public and commercial consumption.

Whether it’s software development, product design, or visual concepts, most businesses seek out external help in order to achieve internal business goals. Development is an important phase in any field. Without it, growth and improvement can be rendered non-existent. Create and customize your own development contract by downloading any of the sample templates above!