Software Contracts
Licensing
Most software is licensed and not owned. It defines:
- Duration
- Transferrable
- Scope
Pricing
- The license fee plus additional costs, such as training.
- If requirements change, how much should modifications cost?
- Terms of payment: may apply interest for later payment.
Specifications
- Drawn up by systems analysts / architects.
- Covers the software functionality, hardware platform and performance.
- When the desired specification changes mid-development, we typically follow novation.
- We may want to also build prototypes to figure out what the customer wants.
Due date and penalties
- Penalties attached to late completion.
- Starts from the agreed date of completion.
- Usually money is paid as parts of the software is completed.
Maintenance and enchancements
- Need to figure out who fixes bugs.
- Maintanace contracts provide support beyond bug fixes, such as adding new features or supporting new platforms.
- Depends also on who owns the source code or otherwise the intellectual property.
Escrow
If the supplier goes out-of-business mid-contract:
- We need to consider who owns the code.
- Can other supplies be used to complete / maintain the products?
- Design documents could be held by a third party.