Development Agreement

Why Should I use a Development Agreement?

Easy – so that the rights and obligations of both parties are clear. One common issue that developers face is how many times can a customer change their mind and yet the developer is still to be held to their fixed fee quote? It can become pretty unfair on the developer very quickly if the developer wears the risk of the client changing their mind multiple times when a fixed fee has been provided (as this means rework, and sometimes a significant amount of rework for no additional fees).

We aren’t saying that a client shouldn’t be able to change their mind, they should, because ideas develop and evolve as a development project goes forward, it’s more a case of being reasonable and contractually agreeing at what stage additional fees should be payable.

The Main Reason to Use a Development Agreement

Let’s cut to the chase on this one. The main issue you want to think about is intellectual property… who will own the intellectual property (we are talking about ‘copyright’ in 99% of cases) in your App or website.

You might be interested to know that the standard position in Australia is that the contractor or developer who created the copyright that is found in your Mobile App or Website owns that intellectual property. What the…?! Yes you read that right. The client who pays for the contractor or developer will have a right to use that IP created, but they won’t own it. Unless…. see below.

Agreement stating who owns the IP

The default position mentioned above, that the contractor/developer engaged by a client will own any IP created for the client can be altered or amended by agreement. Pheeeeew !!

But to change the default position under Australian law you must have a written agreement that clearly sets out that client owns the IP in anything created by the developer, or anything the developer will create (i.e. you can ensure that you own the IP in any future copyright work as well).

We would think that this alone is reason enough to put in place an agreement.

You will also want to deal with any moral rights that the developer has in the content they create, but that is another story of itself!

What do I do if I didn’t have an agreement and I want to own the IP in my App or Website?

If you have had a developer or contractor create something for you and you did not have an agreement in place that clearly said you own the IP in whatever was created for you, it’s not the end of the world. You can enter into a Deed of IP Assignment which transfers ownership of the IP in question from the developer to you. Just bear in mind that things can get problematic if the developer doesn’t want to sign the Deed of Assignment, or wants something (e.g. additional payment) for signing the Deed of Assignment.

Given that you App or Website could be your livelihood it pays to get it right. If you need a hand or want your contract reviewed for free get in touch with us.

MENU