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Custom Software Development Agreement Template for England and Wales

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Key Requirements PROMPT example:

Custom Software Development Agreement

"I need a Custom Software Development Agreement for a mobile banking app project starting in March 2025, where we'll retain all IP rights and require strict data protection provisions due to handling sensitive financial information."

Document background
The Custom Software Development Agreement is essential for businesses commissioning bespoke software solutions under English and Welsh law. It defines the relationship between developer and client, establishing clear expectations for project delivery, ownership of intellectual property, and quality standards. This agreement is particularly crucial in today's digital economy where custom software solutions are increasingly vital for business operations. It addresses key areas including development methodology, acceptance testing, warranties, and liability limitations, while ensuring compliance with UK legislation including data protection and intellectual property laws.
Suggested Sections

1. Parties: Identification and details of the contracting parties (developer and client)

2. Background: Context of the agreement and high-level objectives

3. Definitions: Key terms used throughout the agreement

4. Scope of Services: Detailed description of the software development services to be provided

5. Project Timeline: Development phases, milestones, and delivery dates

6. Payment Terms: Fees, payment schedule, and invoicing requirements

7. Intellectual Property Rights: Ownership and licensing of developed software and materials

8. Acceptance Testing: Testing procedures and acceptance criteria

9. Warranties: Standard warranties regarding service quality and performance

10. Confidentiality: Protection of confidential information

11. Term and Termination: Duration and termination provisions

Optional Sections

1. Change Control: Procedures for managing changes to requirements - recommended for complex projects with likely requirement changes

2. Source Code Escrow: Arrangements for source code protection - recommended when client requires access to source code in specific circumstances

3. Service Levels: Specific performance metrics and remedies - recommended for ongoing maintenance or support arrangements

4. Data Protection: GDPR and data protection obligations - required when personal data processing is involved

5. Third Party Rights: Rights of third parties under the agreement - recommended when third parties may need to enforce rights

Suggested Schedules

1. Schedule 1 - Project Specification: Detailed technical specifications and requirements

2. Schedule 2 - Acceptance Test Criteria: Detailed testing procedures and pass/fail criteria

3. Schedule 3 - Charges and Payment Schedule: Detailed breakdown of costs and payment milestones

4. Schedule 4 - Service Levels: Detailed performance metrics and measurement methods

5. Schedule 5 - Third Party Software: List of third-party software and associated licenses

6. Schedule 6 - Data Processing Agreement: GDPR-compliant data processing terms and details

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Copyright, Designs and Patents Act 1988: Primary legislation governing intellectual property rights in software, including copyright protection for source code, documentation, and related materials

UK General Data Protection Regulation (UK GDPR): Regulations governing the processing and handling of personal data, including requirements for data protection in software development

Data Protection Act 2018: UK's implementation of data protection standards, working alongside UK GDPR to regulate personal data processing

Contracts (Rights of Third Parties) Act 1999: Legislation governing how third parties may enforce terms of a contract, relevant for software licensing and end-user rights

Supply of Goods and Services Act 1982: Sets out implied terms for contracts involving the supply of services, including quality and fitness for purpose

Computer Misuse Act 1990: Legislation covering unauthorized access to computer systems and software, relevant for security provisions

Electronic Commerce (EC Directive) Regulations 2002: Regulations governing electronic transactions and online business practices

Trade Marks Act 1994: Legislation protecting branding and marks used in software and related services

Database Rights Regulations 1997: Protects the structure and content of databases, relevant for software involving database creation or manipulation

Unfair Contract Terms Act 1977: Regulates terms that exclude or limit liability in contracts, crucial for warranty and liability clauses

Competition Act 1998: Regulates anti-competitive behavior and agreements, relevant for licensing and distribution terms

Network and Information Systems Regulations 2018: Sets security requirements for network and information systems, relevant for software security obligations

Export Control Act 2002: Controls the export of technology and software, particularly relevant for international software distribution

Privacy and Electronic Communications Regulations (PECR): Specific rules for privacy in electronic communications, relevant for software with communication features

Consumer Rights Act 2015: Protects consumer rights in contracts, relevant if the software is being developed for consumers rather than businesses

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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