Fog Creek Software
Discussion Board

custom software development - contract template?

I have discussed doing some custom software development for a company. It's the first time I do this. All of my other work has been work for hire, and for my university.

At the end of the project I'm delivering to them both the binaries and the source code. However, they have limited rights to the source code: they may modify it themselves, or they may hire a company to modify the source for them, but they may not resell the product.

I keep the full rights to the source code, and I reserve the right to sell the application to other parties, make modifications, etc.

This is convenient for both parts, and we already discussed this.

However, what I need is the legal wording for this. I can't afford to hire a lawyer. I need to contract template or a contract sample for this.

Is there any web site with sample contracts for software development?

Also, they want to pay me a certain amount every year for maintainance. I have no idea how to deal with this.

I like getting paid every year, but it must be clear from the contract how much work am I expected to do for that amount.

What is your opinion on this? What is the best way to handle the situation?

Remember - I'm a first timer. :) Thank you!

Maniac Max
Tuesday, August 31, 2004

Hire a lawyer with experience of software contracts.  Add his fee to whatever you are charging.  If you don't do it right you could end up getting fleeced.

Actively Disengaged
Tuesday, August 31, 2004

Concur. It sounds like a lot of money, but even if it's a grand or two it gets you off on the right foot.

Tuesday, August 31, 2004

Your problem is not really getting a watertight contract so much as working out a good arrangement.

Businesses usually charge an annual maintenance fee of about 20 percent of the purchase price. That covers basic hand-holding and support stuff. If there's anything that needs development, you charge by the hour, on top of the maintenance fee.

Say they pay you $20,000 for the development, then charge them $4,000 per year for maintenance, up to 40 hours.

Also, if you really want to stop them competing against you, you should not let them have the source code. Alternatively, charge another $20,000 for that.

Tuesday, August 31, 2004

Cheap solution: get a copy of Nolo Contract's book: Consultant and Independent Contractor Agreements. The book comes with a CD of RTF documents.

They have several boilerplate contracts specifically for software development. They cover several variations of certain clauses and you can cut out the variations you don't need.

While do it yourself law is never advisable, these contracts seem to be pretty vanilla and safe and cover the most important issues: payment terms, licensing of deliverables, liability, etc.

Bored Bystander
Tuesday, August 31, 2004

*  Recent Topics

*  Fog Creek Home