Software development contract template: what the agreement should cover

Why this is a checklist, not a contract to copy

A software development agreement has to fit your state’s law, your project and how you are paying, and a generic contract downloaded from the internet rarely does all three. This page is not legal advice. Use it to understand what each clause is for, to spot what is missing from an agreement you have been sent, and to prepare questions. Then have a lawyer who handles technology contracts draft or review the final version before you sign.

Most agreements come in two parts: a master services agreement (MSA) with the legal terms, and one or more statements of work (SOW) that describe each project. The checklist below covers both.

The project: scope, deliverables and change requests

• Scope: a clear description of what is being built, usually in an attached SOW or requirements document. Look for an “out of scope” list. If the scope is one vague sentence, every disagreement later will be about what it meant.
• Deliverables: exactly what you receive, such as the working application, source code, design files, documentation, and access to hosting and accounts. Look for source code and credentials listed by name.
• Milestones and acceptance: how each deliverable is reviewed and approved, how long you have to test it, and what happens if it fails. Look for a defined review period and a way to send work back for fixes.
• Change requests: how new ideas or changed requirements are priced and approved. Look for a written process where any change to cost or timeline needs your sign-off before work starts. Monthly plans often absorb ongoing changes; fixed-price projects usually price each one.
• Your responsibilities: what you must provide (content, feedback, access, decisions) and by when. Delays on your side often move the timeline, which is fair if it is written down.

The money: payment terms

• Pricing model: fixed price, time and materials, or a monthly plan. Each shifts risk differently; make sure the contract matches what was quoted.
• Schedule: deposit, milestone payments or monthly billing. Look for payments tied to delivered, accepted work rather than dates alone.
• Rates for extra work, and whether they can change.
• Third-party costs: hosting, app store fees, paid APIs and licenses. Look for who pays them and whose name the accounts are in.
• Late payment and disputes: what happens if an invoice is disputed, and whether work can pause.

Ownership: IP and confidentiality (including the NDA)

• Intellectual property ownership: who owns the code and designs once paid for. Look for ownership transferring to you on payment, or a clear license if not. Watch for wording that keeps ownership with the developer until some unclear event.
• Pre-existing and third-party code: developers reuse their own tools and open-source libraries. Look for a license that lets you use, change and keep those parts as part of your product, and a statement that open-source licenses will be respected.
• Confidentiality: both sides protect each other’s business information, during and after the project. Many teams sign a separate software development NDA before sharing details of the idea, then fold confidentiality into the main agreement.
• Data protection: how customer or personal data is handled, stored and deleted, and any industry rules such as HIPAA. Look for this whenever the software touches real customer data.
• Non-solicitation: whether either side can hire the other’s staff. Common and usually reasonable if limited in time.

Quality and aftercare: warranties, liability and support

• Warranty: a period after launch during which bugs in delivered work are fixed at no charge. Look for how long it lasts and what counts as a bug versus a new request.
• Limitation of liability: caps on what either side can claim if something goes wrong. Nearly every agreement has one; look at whether the cap is reasonable for the project and applies to both sides.
• Indemnity: who covers the cost if a third party claims the software infringes their rights.
• Support and maintenance: what happens after the warranty, such as hosting, updates, security patches and response times. Look for this in writing; it is often the most expensive part over the years and the least discussed.

Ending it: termination and handover

• Termination for convenience: either side can end the agreement with notice. Look for the notice period and what you owe for work already done.
• Termination for cause: what counts as a serious breach and how long the other side has to fix it.
• Handover: on termination you should receive the code, data, documentation and account access you have paid for, in a usable form. This is the clause that protects you if the relationship fails.
• Disputes and governing law: which state’s law applies and whether disputes go to mediation, arbitration or court.

How to review a software development agreement

1. Check it against the quotePrice, scope, timeline and deliverables in the contract should match what you were sold.
2. Find the four critical clausesIP ownership, change requests, acceptance and handover on termination. If any is missing or vague, ask why.
3. List your questions in writingAsk the developer to explain any clause you do not understand. Good partners answer plainly.
4. Have a lawyer review itA technology lawyer can review a draft for a fraction of the cost of a dispute later.
5. Keep every change in writingOnce signed, record changes as written amendments or approved change requests, not phone calls.