Sample Software Development Agreement1 DATE: [date]2 PARTIES:3 (1) [COMPANY NAME], a company incorporated in [England and Wales]

(registration number [number]) having its registered office at [address] (the Developer); and [COMPANY NAME], a company incorporated in [England and Wales] (registration number [number]) having its registered office at [address] (the Customer).

(2)

BACKGROUND: (A) (B) [Insert explanation of the background to this Agreement.] [For example, The Developer has expertise in the development of software, and the Customer has appointed the Developer to develop certain software, and to licence that software to the Customer, on the terms of this Agreement.]

AGREEMENT: 1. 1.1 Definitions and interpretation In this Agreement: Acceptance Criteria means the following criteria: (a) (b) (c)
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the Software [(excluding the Customer Works)] conforming in all [material] respects to the requirements of Schedule [1]; the Software [(excluding the Customer Works)] not exhibiting any Defects; and [other Acceptance Criteria];4

This standard Software Development Agreement includes provisions covering the development of the Software, acceptance testing by the Customer, and the licensing of intellectual property rights in the Software to the Customer. The template includes optional provisions relating to different licensing models. The software licence may be limited to particular users, particular premises, a particular number of concurrent users, a particular number of installations, or a particular computer system. You should take care to ensure that your edited agreement is internally consistent. If you simply include all of the optional provisions in this document, it will not be consistent.

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The date should be the date of signature; if the parties sign on different dates, it should be the date of the last signature. Where a party to the contract is a sole trader or partnership rather than a company, the following party descriptions may be used: sole trader: [INDIVIDUAL NAME] trading as [business name], which has its principal place of business at [address] (the [Developer/Customer]) partnership: [PARTNERSHIP NAME], a partnership established under [English] law having its principal place of business at [address] (the [Developer/Customer])

The Developer undertakes to deliver to the Customer Software that meets the Acceptance Criteria.

Acceptance Period means the period of [number] Business Days following the date of delivery of the Software to the Customer;5 Agreement means this software development agreement (including the Schedules) and any amendments to it from time to time; Business Day means any week day, other than a bank or public holiday in [England];6 Business Hours means between [09:00] and [17:30] [London time] on a Business Day; Charges means the amounts payable by the Customer to the Developer under or in relation to this Agreement (as set out in Schedule [3]); Customer Works means: (a) (b) the works and materials identified as such in Schedule [1]; and any other works and materials that: (i) (ii) the parties agree [in writing] shall be incorporated into the Software; and are provided to the Developer by the Customer, or by any third party acting for or on behalf of the Customer, for incorporation into the Software;

Custom Software means [those elements of the Software identified as such in Schedule [1] / all elements of the Software, excluding the Third Party Works and Customer Works, created by or on behalf of the Developer on or after the Effective Date] in executable format only; Defect means a defect, error or bug having [an / a material] adverse effect on the appearance, operation or functionality of the Software[, but excluding any defect, error or bug caused by or arising as a result of: (a) (b) an act or omission of the Customer, or an act or omission of one of the Customer's employees, officers, agents, suppliers or sub-contractors; or an incompatibility between the Software and any other system, application, program or software not forming part of the Environment or otherwise specified as compatible in Schedule [1]];

"Developer Software" means the Standard Software and the Custom Software; Effective Date means the date of execution of this Agreement; Environment means the computer hardware and software environment for use in which the Software will be designed, the requirements for which are set out in Schedule [1];

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This is the period during which the Customer must conduct any acceptance tests in relation to the Software. If a party is based outside the UK, you should consider whether to amend this.

"Escrow Agent" has the meaning given to it in Clause [12.1];7 Force Majeure Event means an event, or a series of related events, that is outside the reasonable control of the party affected (including [failures of or problems with the internet or a part of the internet, hacker attacks, virus or other malicious software attacks or infections,] power failures, industrial disputes affecting any third party, changes to the law, disasters, explosions, fires, floods, riots, terrorist attacks and wars); Intellectual Property Rights means all intellectual property rights wherever in the world, whether registered or unregistered, including any application or right of application for such rights (and the intellectual property rights referred to above include copyright and related rights, database rights, confidential information, trade secrets, know-how, business names, trade names, trade marks, service marks, passing off rights, unfair competition rights, patents, petty patents, utility models, semi-conductor topography rights and rights in designs); Milestone means a specific milestone, achievement, notification, action or other event identified as a milestone in Schedule [2]; Schedule means a schedule attached to this Agreement; Services means all the services provided or to be provided by the Developer to the Customer under this Agreement; Software means the software to be developed and delivered under this Agreement, including: (a) (b) (c) the Developer Software; the Third Party Works; and the Customer Works,

[and including where the context permits any authorised derivatives of the Software]; ["Source Code" means the source code of the [Standard Software / Developer Software][, together with all other technical information reasonably required to enable the maintenance, updating and modification of the [Standard Software / Developer Software][, and including where the context permits any authorised derivatives of the source code];] Standard Software means [those elements of the Software identified as such in Schedule [1] / the Software excluding the Custom Software, the Customer Works and the Third Party Works / all elements of the Software, excluding the Third Party Works and the Customer Works, created before the Effective Date] in executable format only; Target Delivery Date means the target date for delivery of the Software specified in Schedule [2];

If the source code for the Software is not being provided to the Customer, the Customer may want to enter into a separate escrow agreement in relation to such source code. Under a typical escrow agreement, a third party escrow agent will hold an (up-to-date) copy of the source code, and will release that code to customers if the Developer becomes insolvent or in other specified circumstances. See Clauses 10 and 12.

Third Party Works means: (a) (b) the works and materials identified as such in Schedule [1]; and any other works and materials that the parties agree [in writing] will be incorporated into the Software as Third Party Works; and

Term means the term of this Agreement. 1.2 In this Agreement, a reference to a statute or statutory provision includes a reference to: (a) (b) 1.3 1.4 2. that statute or statutory provision as modified, consolidated and/or reenacted from time to time; and any subordinate legislation made under that statute or statutory provision.

The Clause headings do not affect the interpretation of this Agreement. The ejusdem generis rule is not intended to be used in the interpretation of this Agreement.8 Term This Agreement will come into force on the Effective Date and will continue in force [until [date or event], upon which it will terminate automatically / indefinitely], unless terminated [earlier] in accordance with Clause [15].9

3. 3.1

Services overview The Developer will design and develop the Custom Software and integrate the Custom Software with the Standard Software, the Third Party Works and the Customer Works, in accordance with the terms of this Agreement. The Developer may sub-contract the provision of any of the Services without obtaining the consent of the Customer. OR ... This document contains the first few sections of a premium SEQ Legal template available for download from: http://www.template-contracts.co.uk

[3.2

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Where the ejusdem generis rule applies, the meaning of a general provision may be restricted by the listing of particular examples. This is usually undesirable. This agreement has been drafted on the basis that the licences of software will terminate upon the termination of the agreement. So, in almost all cases, the agreement should not terminate upon the completion of the development services.