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Software Development Outsourcing Agreement Template for England and Wales

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Key Requirements PROMPT example:

Software Development Outsourcing Agreement

"I need a Software Development Outsourcing Agreement for a 12-month project starting January 2025, where we're outsourcing the development of our new healthcare app to an Indian development company, with specific requirements around data protection and source code ownership."

Document background
The Software Development Outsourcing Agreement is essential for businesses seeking to engage external software development services while maintaining legal protection under English and Welsh law. This agreement is particularly relevant in today's digital economy where companies increasingly rely on specialized software development expertise. It covers crucial elements such as project scope, intellectual property rights, confidentiality, payment terms, and delivery schedules, while ensuring compliance with relevant UK legislation including data protection and employment laws.
Suggested Sections

1. Parties: Identification of contracting parties, including registered addresses and company numbers

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 software development services to be provided

5. Project Timeline and Deliverables: Key milestones, deadlines, and deliverable specifications

6. Payment Terms: Pricing, payment schedule, and invoicing procedures

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

8. Confidentiality: Protection of confidential information and trade secrets

9. Term and Termination: Duration of agreement and termination provisions

Optional Sections

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

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

3. Service Levels: Performance metrics and service level agreements - recommended for ongoing maintenance or support services

4. Business Continuity: Disaster recovery and business continuity provisions - recommended for business-critical applications

5. Source Code Escrow: Source code deposit and release conditions - recommended when client requires source code security

Suggested Schedules

1. Schedule 1 - Service Description: Detailed technical specifications and requirements

2. Schedule 2 - Charges: Detailed pricing breakdown and rate cards

3. Schedule 3 - Project Plan: Detailed timeline, milestones, and resource allocation

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

5. Schedule 5 - Key Personnel: Key personnel and their roles/responsibilities

6. Schedule 6 - Data Processing Agreement: Detailed data protection obligations and procedures

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

Data Protection Act 2018 and UK GDPR: Primary legislation governing the processing of personal data in the UK, essential for defining data handling obligations and responsibilities in software development

Copyright, Designs and Patents Act 1988: Governs intellectual property rights, crucial for determining ownership and protection of software code, designs, and related IP

Consumer Rights Act 2015: Relevant if the client is a consumer, setting out quality standards and consumer protection measures

Supply of Goods and Services Act 1982: Establishes implied terms for service contracts, including requirements for reasonable care and skill

Contracts (Rights of Third Parties) Act 1999: Determines how third parties may enforce terms of the contract, relevant for subcontractors or end-users

Employment Rights Act 1996: Important for proper classification of contractors and avoiding disguised employment relationships

IR35 Legislation: Tax legislation affecting contractors, crucial for determining employment status for tax purposes

National Minimum Wage Act 1998: Ensures compliance with minimum wage requirements for any workers involved in the project

Working Time Regulations 1998: Governs working hours and conditions, relevant for project scheduling and resource allocation

Computer Misuse Act 1990: Addresses cybersecurity and unauthorized access to computer systems, important for security obligations

Electronic Commerce Regulations 2002: Regulates electronic business and online service provision, including software delivery

Privacy and Electronic Communications Regulations: Governs electronic communications and privacy, relevant for software with communication features

Late Payment of Commercial Debts Act 1998: Sets rules for payment terms and interest on late payments in commercial transactions

Unfair Contract Terms Act 1977: Regulates unfair terms in contracts, particularly important for limitation of liability clauses

Competition Act 1998: Ensures compliance with competition law, relevant for exclusive arrangements or market restrictions

International Data Transfer Regulations: Governs the transfer of data across borders, crucial for international software development projects

Export Control Regulations: Controls the export of certain technologies and software, particularly those with dual-use capabilities

EU Retained Law: Post-Brexit legislation retained from EU law that remains relevant to software development and service provision

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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