A Software Development Agreement reduces the possibility of risk and exposure by defining the expectations and obligations of the parties (including project scope and milestones. Using our free template lets you clearly state the intellectual property rights, confidentiality, change order and handling of changes, testing and acceptance of deliverables, and dispute resolution and termination provisions.
Software Development Agreement Template
Draft a custom software development contract in minutes. Edit our free sample online, export in Word or PDF, and sing digitally with e-signature.
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About This Template
This Software Development Agreement template is built to formalize custom software projects from the ground up. The agreement establishes a legal contract which defines all software development phases starting from design until delivery and including maintenance services.
- The template works for bespoke development work instead of standard service delivery operations.
- Requires the transfer of intellectual property ownership and complete rights on the product to the Client.
Customize this agreement template to match the exact requirements of your software project. Edit it online or download it in Word or PDF format. Add electronic signatures to finalize and make the contract legally binding.
Who can use this template
The Software Development Agreement template functions as a legal contract which organizations can implement to manage their custom software delivery. It fits outsourced engineering teams, development agencies who handle client work, and consulting firms execute technical solution deployment services.
Our free template helps you protect your investments when using external developers’s services to create software. Yet, if you’re hiring an individual freelance developer, consider using an Independent Contractor Agreement template. Contractor agreements are better tailored to solo service providers and fully cover the independent contractor status.
When to use this template
Use our Software Development Agreement template to establish an agreement at the start of custom development work, before any programming begins, and payment deposits become due.
Typical scenarios
- Building a web or mobile application
- Developing a SaaS platform
- Creating CRM or ERP integrations
- Designing internal automation tools
- Migrating legacy systems
- Building AI or analytics dashboards
Software Development Agreement Sample: What’s Included
This is an example of a Software Development Agreement that covers the full commercial and legal framework of a software development process for a custom developed software product and contains all necessary clauses to avoid misunderstanding and protect all parties.
Scope of work and developer obligations
The template defines the Developer's scope, so clear expectations are set. It connects that scope to specifications (Exhibit A) and timelines (Exhibit B). Most software disputes stem from a vague scope definition at the outset.
Delivery and acceptance terms
The contract further specifies delivery deadlines and defines a review period during which the Client can test the product against the agreed specification. If the product is not conformant, the Developer must make corrections. It also prevents Clients from signing off too early, while giving Developers a clear acceptance process.
Compensation structure
Payment terms determine billing rates, maximum project costs, and invoicing cadence to achieve predictable Client budgets and cash flow transparency for the Developer.
Intellectual property ownership
The Client holds all rights, title, and interest in the Software and Source Code, essential for companies delivering proprietary software, seeking investment, or intending to monetize their products.
Change management process
The contract needs to state how changes to the specification are to be requested, evaluated and priced. It is important to do this in practice because it reduces scope creep, scheduling disagreements, and uncontracted "quick additions".
Confidentiality protections
The Developer agrees to protect business information, technical details and source code. Alternatively, you can also embed an Non-Disclosure Agreement (NDA) to prevent discussing trade secrets, product strategy, functionality, operation and internal organization without the Developer's permission during and after its production.
Warranties and defect liability
The Developer warrants that the software will work to specification and will fix defects during the warranty period. This gives a Client protection after launch and makes the Developer accountable for their work after delivery.
Indemnification and legal risk allocation
If the Software infringes third-party intellectual property rights, the Developer will indemnify the Client. This is particularly important for enterprise Clients, who are at risk of being sued.
Legal governance and enforceability
The final elements in the contract itself are clauses regarding jurisdiction, modification, and execution, which state the governing law and stipulate that modifications must be in writing.
How to Fill in This Software Development Agreement Template
1. Enter Party Information
Enter the full legal names, company names, and registered business addresses of both parties. Use official entity details.
2. Describe Software
Give a concise, high-level description of what is being built. Keep this summary directional (e.g., platform type, purpose, primary users). You may attach the full functional and technical specifications in Exhibit A, and thus document all the needed features, integrations, and performance requirements in detail.
3. State Delivery Terms
Specify milestone phases, interim deliverables, and the final delivery date. The best practice is to align the acceptance timelines with the project’s QA and testing plan. Make sure to reflect this in your agreement.
4. Review Support & Training
State the post-launch support period and what it includes. Specify the number of training days available to the Client and any knowledge-transfer obligations. Define hourly rates or fees for additional support that falls outside the included scope.
5. State Compensation
Document the full pricing structure. Indicate whether billing is hourly, fixed-fee, or milestone-based. Include maximum project cost caps, payment schedules, and invoice frequency. Clarify when payments are due and what triggers invoicing.
6. Define Warranty Period
Specify the duration of the warranty window following delivery. Define the Developer’s responsibility to fix bugs, defects, or performance issues that arise during this period, provided they relate to the agreed specifications.
7. Attach Exhibits
Add all supporting documentation that operationalizes the agreement. At minimum, include:
- Exhibit A: Detailed software specifications
- Exhibit B: Milestone schedule and delivery timeline Ensure these exhibits are complete before sending the agreement for signature, as they define the measurable scope of work.
8. Final Review & Signature
Complete the remaining legal fields. Once finalized, both parties should sign and date the execution blocks through authorized representatives.
FAQ
Use a Software Development Agreement for custom software and whenever you deliver software to clients. Unlike other contracts, this template covers specifications, milestones, IP ownership, warranties, and your obligations once the software is live. It particularly suits projects where scope, cost and delivery risk need to be closely controlled.
Yes. The template grants the Client all Intellectual Property Rights to the software once the work is completed, including source code and associated assets. This allows you to commercialize, modify or expand the product after delivery without ownership issues.
The template makes it possible to work with freelancers, yet it’s best-fit for development agencies and in-house vendors. It thus works for custom web applications, mobile apps, SaaS applications, integration services and other custom builds where services are to be provided as per specification.
The agreement incorporates a change management clause, giving Clients the right to request changes to specification. The Developer assesses impacts to the timeline and cost, preventing scope creep and ensuring that authorized changes are documented appropriately.
The acceptance review period will commence upon delivery of the software. Client shall review the software and shall report to Developer any defects or deficiencies. Developer shall resolve the defects or deficiencies so that the software complies with the Documentation.
