A Customer Software Development is an agreement between a company/individual and
a software developer that outlines terms and conditions in which a software developer
develops a piece of software for a company/individual. This agreement provides for
payment provisions, the developer transferring all of his/her/its rights to the software
developed and a dispute resolution clause. This document in its draft form contains
numerous of the standard clauses commonly used in these types of agreements;
however, additional language may be added to allow for customization to ensure the
specific terms of the parties’ agreement are addressed. This document is useful for
individuals or entities entering into agreements with software developers.
CUSTOMER SOFTWARE DEVELOPMENT AGREEMENT
THIS CUSTOMER SOFTWARE DEVELOPMENT AGREEMENT (the
“Agreement”) is entered into this ______ day of ________________, 20______, between
_________________ (the “Client”) and __________________ (the “Developer”).
WHEREAS the Client wishes to obtain the services of the Developer to provide software
development services to the Client according to the following terms, provisions and conditions:
1. As requested by the Client and agreed to by the Developer, from time to time, whether in
writing, by purchase order, or verbally, the Developer shall provide consulting and software
development services on a time and expenses basis to the Client according to the terms of this
2. The primary purpose of this Agreement is to continue the computer programming
development of a _____________________ software application (the “Project”).
3. The total solution being developed includes:
(i) a _________________ software application that will enable the Client to
(ii) a ___________________________ application server that processes
_________________ transactions to and from __________ aggregators.
4. Once the Developer agrees to commence the Project for the Client, the Developer will
plan its activities and staffing according to the hours required for the Project.
5. If the Client wishes to reduce the hours required for the Project after the Project has been
commenced, the Client must elect that the reduction will not take effect for at least _____ (__)
days from the date of notice to the Developer.
6. For the period commencing ____________, 20_____, and continuing until either party
has terminated this Agreement in writing, the Client will pay to the Developer a monthly/bi-
weekly sum of _____________ ($________) dollars .
7. At the end of each month, the Client may request additional payments for the following
month based on estimated work efforts required to meet time-sensitive deliverables.
8. The Client will potentially make continued commitments for further work and additional
compensation if additional resources are required.
9. The Client will reimburse the Developer for any reasonable expenses incurred by the
Developer on behalf of the Client.
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10. Within _____ (__) days after services are provided by the Developer to the Client, the
Client shall pay to the Developer for invoiced services rendered and reasonable expenses
incurred on behalf of Client.
11. If at any time following the commencement of the Project by the Developer, should the
Client desire a change in the Developer's performance under this Agreement, the Client shall
submit to the Developer, a written proposal specifying the desired changes.
12. The Developer will evaluate each such proposal at its standard rates and charges. The
Developer shall submit to the Client a written response to each such proposal within ____ (___)
business days following receipt thereof. The Developer's written response shall include a
statement of the availability of Developer's personnel and resources, as well as any impact the
proposed changes will have on the payment to the Developer as set out in Section 6 above, the
delivery date or warranty provisions of this Agreement.
13. The Client shall have ________ (__) days from the date of delivery of the software in
final form to inspect, test and evaluate it to determine whether the software satisfies the Client, or
as established by the Developer and approved by the Client prior to testing.
14. If the software does not satisfy the Client, the Client shall give the Developer written
notice stating why the software is unacceptable. The Developer shall have _______ (___) days
from the receipt of such notice to correct the deficiencies. The Client shall then have _____ (___)
days to inspect, test and evaluate the software. If the software still does not satisfy the Client, the
Client shall have the option of either repeating the Project or terminating this Agreement
pursuant to this Agreement. If the Client does not give written notice to the Developer within the
initial _______ (___) day inspection, testing and evaluation period or any extension of that
period, that the software does not satisfy the Client, the Client shall be deemed to have accepted
the software upon expiration of such period.
15. The Client warrants that the Developer will have the appropriate right, title, and interest
to the software development tools used, and the work product will not infringe any rights of third
parties due to such software.
16. The Developer will assign to the Client, the Developer’s entire right, title and interest in
the Project and anything created or developed by the Developer for the Client under this
Agreement, including but not limited to, all patents, copyrights, trademarks and other proprietary
rights. This assignment is conditional upon full payment of the payment(s) set out in Section 6 of
17. The Developer shall execute and aid in the preparation of any documents necessary to
secure any copyright, patent, trademark or other intellectual property rights in the Project at no
charge to the Client; however, the Client shall reimburse the Developer for reasonable out-of-
18. The Developer does not warrant that its designs or programming will be error free;
however, the Developer will use all reasonable efforts to attempt to correct any reported design
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or programming errors as a service to be provided under this Agreement.
19. The Developer shall have no liability for design decisions made wholly or in part by the
Client or any other consultant for the Client.
20. There are no other warranties, expressed or implied, and no warranty of merchantability
or fitness for a particular purpose.
21. Any liability by the Developer to the Client shall be limited to amounts received from the
22. The Developer shall not be liable for any claim or demand, either directly or as a result of
a third party claim against the Client, for lost profits, or for indirect, special or consequential
23. During the term of this Agreement and for ________ (____) months/years after the
termination of this Agreement, the Developer will use all reasonable care to prevent the
unauthorized use or dissemination of the Client’s confidential information. Reasonable care
means at least the same degree of care the Developer uses to protect its own confidential
information from unauthorized disclosure.
24. Confidential information is limited to information clearly marked as confidential, or
disclosed orally that is treated as confidential when disclosed and summarized and identified as
confidential in writing delivered to the Developer.
25. Confidential information does not include information that:
(i) the Developer knew before the Client disclosed such information;
(ii) becomes public knowledge through no fault of the Developer;
(iii) information the Developer obtains from sources other than the Client who have no
duty of confidentiality to the Client; or
(iv) any information the Developer develops on its own.
26. This Agreement commences on the date it is executed and shall continue until full
performance by the Client and the Developer, or until earlier terminated by one party under the
terms of this Agreement.
27. The Client and the Developer shall each have the right to terminate this Agreement by
written notice to the other if a party has materially breached any obligation herein and such
breach remains uncured for a period of _______ (___) days after written notice of such breach is
sent to the other party.
28. Should the Developer terminate this Agreement due to the Client’s default of any of the
terms, provisions or conditions contained herein, then all of the following shall apply:
(i) the Client shall immediately terminate its use of the Software;
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(ii) the Client shall within _______ (___) days of such termination, delivered to the
Developer all copies documents related to the software developed in its
(iii) any and all amounts payable to the Developer under this Agreement shall
immediately become due and payable;
(iv) any and all rights and licenses granted to the Client under this Agreement shall
29. The Client and the Developer hereby commit to good faith negotiations for a period of
_______ (___) days from the date of notice by one party to another that there is a dispute
between the parties arising out of or relating to the validity, construction, meaning, performance
or effect of or the rights and liabilities of the parties hereto with respect to this Agreement (the
“Dispute”), prior to referring the dispute to arbitration.
30. If after the _______ (___) day negotiation period, the Dispute persists, the Dispute shall
be determined by arbitration pursuant to the Rules of Commercial Arbitration of the American
Arbitration Association, by a panel of three (3) arbitrators, one to be appointed by each disputing
party within ________ (___) business days after the end of such _______ (____) day negotiation
period, and a third to be appointed within _________ (___) business days thereafter by the two
arbitrators appointed by the parties.
31. If one of the parties fails to appoint their arbitrator within a ____________ (____)
business day period, the arbitrator which has been appointed shall conduct the arbitration with no
right for the other party to subsequently appoint its arbitrator. The award rendered by the
arbitrator or arbitrators shall be final and binding and not subject to appeal. The arbitrator or
arbitrators shall be empowered to determine all questions of law and fact, and may grant interim
injunctive relief. The prevailing party shall be entitled as part of the arbitration award to the
reasonable costs and expenses (including legal fees and disbursements) of investigating,
preparing and pursuing such claim or defense, and the party enforcing an award shall be entitled
to reasonable costs and expenses (including legal fees and disbursements) incurred in connection
32. The Client hereby acknowledges that the Developer is an independent contractor, and
that none of the Developer’s employees or sub-contracts shall be deemed the Client’s employees.
33. The Client hereby acknowledges and agrees that, in the Developer’s capacity as an
independent contractor, the Developer has the right to perform any of its services for others
during the term of this Agreement and that the Developer has the right to perform the services
for the Project at any place or location the Developer sees fit.
34. This Agreement shall inure to the benefit of, and be binding on each of the Client and the
Developer, and their respective successors and permitted assigns. The Client and the Developer
may not assign or transfer all or any part of their respective rights or obligations under this
Agreement without the prior written consent of the other.
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35. This Agreement (together with all other agreements or documents executed by the Client
and the Developer as may be contemplated by this Agreement) constitutes the entire agreement
between the Client and the Developer pertaining to the subject matter of this Agreement and
such other agreements and documents and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written including, without limitation, any
confidentiality agreements which may have been entered into between the Client and the
Developer prior to the date hereof. There are no conditions, warranties, representations or other
agreements between the Client and the Developer in connection with the subject matter of this
Agreement (whether oral or written, express or implied, statutory or otherwise) except as
specifically set out in this Agreement or in such other agreements and documents.
36. This Agreement together with all exhibits, appendices or other attachments, which are
incorporated herein by reference, is the sole and entire Agreement between the parties. This
Agreement supersedes all prior understandings, agreements and documentation relating to such
subject matter. In the event of a conflict between the provisions of the main body of the
Agreement and any attached exhibits, appendices or other materials, this Agreement shall take
37. Any provision of this Agreement which, as it may relate to the Client or the Developer,
is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to
the extent of such prohibition or unenforceability and shall be severed from the balance of this
Agreement, all without affecting the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
38. This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which taken together shall be deemed to constitute one and
the same instrument. Counterparts may be executed either in original or faxed form and the
parties adopt any signatures received by a receiving fax machine as original signatures of the
parties; provided, however, that any party providing its signature in such manner shall promptly
forward to the other party an original of the signed copy of this Agreement which was so faxed.
39. This Agreement shall be governed by and construed in accordance with the laws of the
State of ________________.
IN WITNESS WHEREOF the Client and the Developer have executed this Agreement
as of the date set forth above.
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