Software development projects are often complex and whilst a good contract supports a project, it is also important to ensure that the project is robustly managed, especially in relation to scope creep (see 1 below).
1.Scope Creep
We’ve all been there. You are halfway through a project or a phase of the project, and the client emails or calls you for a change that often starts “can you just”. The word “just” suggests a simplicity in the client’s mind which often belies the actual complexity involved in the request.
In all fairness to clients, (I may have done it myself to suppliers), they may not always understand the significance of what they are asking. But this is the point at which the onus is on the software developer to communicate the impact of the change to the client, not only from a commercial expectation management point of view but also from a legal point of view (especially if it is going to cost more).
If the services are clearly defined, so it is clear the request is outside of scope, that is of course helpful. Similarly, if the contract has a clear process for managing change control too, that can always act as a backup to manage this type of scenario.
2.Acceptance
Acceptance in a software development contract is a key concept. Final acceptance by the client usually triggers the final payment by the client as well as the commencement of warranties given by the software developer about the application (if any!). Acceptance, however, is not a legally recognised term. It must be properly defined in the contract. Amongst other things, it is important to ensure the contract says that acceptance is deemed to have taken place in the absence of any communication by the client (common!) or use of the application in a live environment.
3.Intellectual Property
Clients of software developers quite often want ownership of intellectual property in the application they are having developed for them. The client feels because they are paying, then ownership ensues. However, that is not always possible, not least because it is often the case that the software developer’s core code comprises part of the application. It is often more appropriate to grant the client a licence rather than transfer ownership.
Also, it is now common for applications to comprise of software from third-party sources which may include open-source software or third-party plugins, none of which the software developer can transfer ownership of because they don’t own it themselves! Third-party software can only be licenced in accordance with the terms of the third-party owner’s licence!
We spend a lot of time helping software developers negotiate or training them to manage some of these difficult moments before and during contracts. If you would like to discuss this in more detail, please contact Tracey@law-point.co.uk or call 01202 729444.
