The Dos and Don’ts of a Software Development Contract

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Every great software development outsourcing relationship begins with one critical component: a contract. This document acts as a means of establishing the terms of your work, you and your partner’s expectations and requirements, and other details about the development process and business arrangement.

Sure, it may seem like a hassle to create a software development contract, but it’s important to have as it will prevent hiccups, confusion, and disputes down the road. How do you write one that will make both partners comfortable and confident? We’ve laid out some essential dos and don’ts below.

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Do Define Requirements

Requirements are the backbone of your contract and the entire project. Simply put, requirements are the core features that products absolutely must-have. The business leader or person signing the contract should specify essential requirements in the contract after ensuring the development team is committed to meeting them and deems them feasible to implement. 

It’s a good idea to outline as many major requirements as possible in your contract to avoid confusion and disagreements about expectations later on. Additionally, make sure the procedures regarding potential changes to requirements down the line are put forth in writing. By signing the contract, both parties are agreeing to these terms.

Do Outline Communication Methods

Whether you’re working with an outsourcing partner in the same city or a different country, clear, effective communication plays a crucial role in the success of your venture. Unfortunately, it can also be a problem when you don’t plan out how and when you’re going to communicate, particularly when you’re dealing with language barriers and time-zone differences.

To prevent communication problems from interfering with your project, you should outline the procedures and practices you’ll use to connect with your partner. Describe the tools that will be implemented, the frequency of contact, and other expectations. List point people on each team to field questions and serve as the general project contacts, too.

Do Be Specific

Specificity — from requirements to plans to communication to other concerns — will serve you well in your partnership. If you leave anything up to doubt or interpretation, you’re bound to run into conflict, later on, should issues arise, as they often do. Be as thorough as possible when laying out the terms of your project because you don’t want to have any misunderstandings or confusion afterward.

Do Address Timelines and Milestones

While it’s important to address timelines in your contract, remember that they are often disrupted as requirements change and issues arise. To help avoid problems, you should also establish benchmarks and milestones when certain parts of the project will be completed. This should allow both parties to better monitor the project.

Do Prioritize Requirements and Features

We’ve discussed the importance of laying out clear requirements. But in addition to establishing the requirements, you should also prioritize them. Not all features have equal weight, after all. While you’ll want to include as many critical requirements as possible — and be specific about them — you don’t want to include so many that the project will never be finished.

Do Cover Intellectual Property

Intellectual property (IP) is something you’ll need to cover in your contract. This concerns who actually owns the rights to the product you create. Typically, without a contract stating otherwise, these rights would go to the team that built the product, meaning the software developers.

Before you immediately specify that the business owns the IP rights, make sure you consider multiple angles, such as if you need the team to make alterations, which could cause confusion. It’s a good idea to consult an attorney about what the best course of action is, and use their advice to inform your contract.

Don’t Ignore the Possibility of Complications

It’s very rare that no complications will arise over the course of the project. That’s why it’s important to account for multiple scenarios in your contract to avoid these complications becoming a larger issue that adversely affects the entire product. 

This will help protect both the business and the developer if and when things go wrong. Make sure you include plenty of “if” and “then” clauses — in other words, “If such-and-such happens, then this is what we’ll do.”

Don’t Allow Scope Creep to Derail Your Project

Defining the scope of the project is a crucial step. This is to avoid scope creep, which is when requirements and other aspects of the project change and grow beyond what is feasible to accomplish within the given timeline. If parameters aren’t clearly structured at the outset of the project, scope creep can threaten to destroy your hard work.


To prevent this all-too-common scenario from occurring with your project, include a statement of scope in the contract, clarifying that the project can’t expand outside of reasonable boundaries. Make sure to define the parameters and deliverables clearly, too.

Don’t Leave It Open-Ended

Along the same lines, it’s absolutely imperative that you don’t leave any aspects of the project or contract open-ended. Don’t assume anything of your partner that you haven’t clearly stated and outlined in the contract. 

For example, if you as a business leader want continued maintenance and support from your software development team in the future, you’ll need to make sure your contract says so and that they agree to these terms. Otherwise, this isn’t something you can expect from your partner.

Don’t assume any terms or consider them implied, either by verbal agreement or your own belief that something is automatically included — doing so could come back to haunt you later on.

The software development process is an intricate one. A large part of ensuring that things run smoothly is getting everyone on the same page. A specific, clearly defined, detailed contract is integral to making this happen.

If you’re looking for a partner to help you build superior products, contact BairesDev today. We’ll work with you through every stage of the software development process, ensuring we’re able to meet your goals.

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