The first time you see a vendor’s contract shouldn’t be when you sit down to sign it. That’s why we’re posting a sample agreement on the site for your review.

Software Development Agreement

This Software Development Agreement is made on September 1st, 2018 (the “Effective Date”) between Capital Technology Services (Registered as Chapin Technology Service LLC), a Tennessee Limited Liability Company with its principal place of business located at 2401 Walnut Street, Suite 102 Philadelphia, PA 19103 (the “Developer”), and YOUR ORGANIZATION, a STATE OF XXXXX ENTITY TYPE with its principal place of business located at 123 Sample Ave. Nashville, TN 37212 (the “Customer”).

The parties agree as follows:

  1. Definitions. In addition to the terms defined above, the following definitions apply:
    1. “Confidential Information” means all non-public and business-related information, written or oral, that the Customer discloses or makes available to the Developer, directly or indirectly, through any means of communication or observation.
    2. “Software” means YOUR ORGANIZATION’s Ruby on Rails based web application., and all associated documentation and other instructions.
    3. “Specifications” has the meaning given to it in section 3.1.
  2. Software Development Services. The Customer engages the Developer, and the Developer agrees, to perform services for the Customer to develop, deliver, and install the Software in accordance with the terms of this agreement.
  3. Developer’s Duties and Responsibilities
    1. Specifications. The Customer shall define the specifications, requirements, and deliverables (the “Specifications”) with input from the Developer to make sure each specification conforms to the Developer’s INVEST+E guidelines. Each specification must be able to be worked Independently. The goals of all specifications must be Negotiable. Specifications must express why the proposed work is Valuable to the Customer. Every specification must be Estimable by the Developer. Scope of specifications should be Small for lowering the risk associated with changes to code. Tests must be defined for every functional requirement. Finally, Example cases and outcomes must be defined when possible.
    2. Development. The Developer shall design, develop, and install the Software in accordance with the Specifications.
    3. Delivery. The Developer shall grant the Customer access to the source code of the Software from the Effective Date of the agreement or as soon as practicable thereafter. The initial installation of the Software and any updates shall be installed as soon as is practicable and according to agreements between the Customer and Developer during weekly project management meetings.
    4. Installation. The Developer will be responsible for conducting at least one installation of the Software and producing documentation outlining the steps required for the Customer to install the Software.
  4. Acceptance
    1. Acceptance Period. The Customer will have 14 days following each date of delivery OR installation to assess and test the Software.
    2. Completion. If the Developer delivers the Software in accordance with the Specifications, then the Developer will be deemed to have completed its delivery obligations.
    3. Rejection. If the Developer fails to deliver the Software in accordance with the Specifications, the Customer shall detail in writing its grounds for rejection. In that case, the Developer shall use reasonable efforts to correct the Software, in which case upon delivery of the corrected Software, the process of acceptance testing will restart.
    4. Continued Failure. If the Developer’s corrections fail to deliver the Software in accordance with the Specifications, then the Customer may elect to terminate this agreement or adjust the Specifications accordingly.
  5. Change Orders
    1. Changes. The Customer may at any time request changes to the Specifications. Changes must be submitted in writing into the Developer’s issue tracking system, or to the Developer’s project management contact.
    2. Additional Time or Expense. If the proposed change will, in the Developer’s reasonable opinion, require a delay in the delivery OR installation of the Software or result in additional expense, then the Customer and the Developer shall confer. The Customer may in that case elect to either:
      1. withdraw its proposed change, or
      2. require the Developer to deliver the Software with the proposed change, subject to the delay or additional expense or both.
    3. Termination. If the Developer is unable to accept, or chooses not to accept, the change order, the Customer may terminate the agreement upon notice to the Developer.
  6. Training
    1. Scope. The Developer shall provide the Customer with training on how to use the Software during weekly project management meetings. Additional training can be requested by the Customer and provided on an hourly basis at regular billable rates.
    2. Dates and Locations. The Developer shall conduct the training on the dates and at the locations that the parties agree upon.
  7. Support and Maintenance
    1. The Customer may obtain support and maintenance services from the Developer from 9am to 6pm Eastern at regular hourly rates.
  8. Fees and Expenses
    1. Fees. The Customer shall pay the Developer according to hourly rates specified in Schedule A, attached to this agreement.
    2. Expenses. The Customer shall reimburse the Developer for all reasonable expenses that the Developer incurs in developing the Software.
    3. Payment Due Date. All fees under this agreement will be due and payable in full to the Developer no later than 30 days after the date of the Developer’s invoice.
    4. Late Payments. Any amount not paid when due will bear interest from the due date until paid at a rate equal to 10.00% annually. or the maximum allowed by law, whichever is less.
  9. Term. This agreement will begin on and continue until the Developer has performed all its obligations under this agreement, unless terminated earlier.
  10. Representations. The Developer represents and warrants to the Customer as follows, acknowledging that the Customer is relying on these representations and warranties:
    1. Right to Assign. The Developer has, and will have, the authority to assign rights to the Software to the Customer under this agreement.
    2. No Infringement. The Developer’s use of the Software will not infringe upon the intellectual property, contractual, or other proprietary or personal rights of any person.
  11. Warranties
    1. Limited Media Warranty. The Developer warrants that, for a period of 90 days following the termination of this agreement the Developer will be able to provide the Customer with a copy of the Software’s source code via Internet file transfer as soon as practicable and when given written notice.
    2. Limited Support Warranty. For a period of 90 days following the delivery OR installation of the Software, the Developer shall perform its maintenance and support services consistent with generally accepted industry standards, but only if the Software is installed and operated in accordance with the Developer’s documentation and other instructions.
    3. Limited Performance Warranty. The Developer warrants that, for a period of 90 days starting on the date of delivery OR installation of the Software, the Software will perform in accordance with the functional Specifications set forth in the documentation, but only if the Software is installed and operated in accordance with the Developer’s documentation and other instructions.
    4. Disclaimer. The Developer does not warrant that the functions contained in the Software will meet the Licensee’s requirements or operate in the combination desired by the Licensee, or that the Software’s operation will be uninterrupted or error free. The Developer does not make and will not be liable for any warranties other than those expressly included in this agreement.
  12. Acknowledgments
    1. Independent Contractor. The Developer is an independent contractor. Nothing contained in this agreement creates a partnership, joint venture, employer/employee, principal-and-agent, or any similar relationship between the parties.
    2. Proprietary Rights. The parties acknowledge that the development of the Software is “work for hire” within the meaning of the Copyright Act of 1976, as amended on one or more occasions, and that the Software written under this agreement will be the Customer’s property.
    3. Consent to Use of Data. The Developer may collect and use technical information gathered as part of its support services, but may only use this information to improve its products and services. The Developer shall not disclose this any of this information in a form that personally identifies the Customer or it clients.
    4. Government End Users. If the Software and related documentation are supplied to or purchased by or on behalf of the United States Government, then the Software is deemed to be “commercial software” as that term is used in the Federal Acquisition Regulation system. The rights of the United States will not exceed the minimum rights set forth in FAR 52.227-19 for “restricted computer software”. All other terms and conditions of this agreement otherwise apply.
  13. Confidentiality
    1. Confidentiality Obligations. During the term of this agreement and for 1 year afterward, the Developer shall hold all Confidential Information in confidence in accordance with the terms of this agreement.
    2. Use Solely for Purpose. The Developer shall use the Confidential Information in accordance with, and solely for the purpose of providing its services under, the terms of this agreement.
  14. Source Code Management. Delivery and Update of Source Code. The Developer shall provide access to the source code to the Customer during the entire term of the agreement and maintain backups for a minimum of 90 days after the termination of the agreement.
  15. Assignment of Rights. Upon acceptance of the Software and payment of all compensation due to the Developer, the Developer agrees to grant and assign, and hereby grants and assigns, to the Customer its entire interest in the Software (including all intellectual and other property rights).
  16. Indemnification
    1. Developer’s Indemnity. The Developer shall indemnify the Customer and its officers, directors, employees, agents, and affiliates, against all claims, liability, costs, and expenses (including attorneys’ fees) arising from any third party claim or proceeding against the Customer
      1. based on any claim that the Software infringes or violates any intellectual or other property right, or
      2. that alleges any negligent act or omission or willful conduct of the Developer or its directors, officers, employees, agents, or affiliates.
    2. Notice of Claim. The Customer shall give prompt written notice to the Developer of any claim or potential claim for indemnification under this agreement.
  17. Limitation of Liability
    1. Neither party will be liable for breach-of-contract damages that the breaching party could not reasonably have foreseen upon entering into this agreement.
    2. Neither party will be liable to the other for any indirect, special, punitive, exemplary or consequential damages, or incidental losses or damages of any kind, including, but not limited to, lost profits, lost savings or loss of use of facilities or equipment, regardless of whether arising from breach of contract, warranty, tort, strict liability or otherwise, even if advised of the possibility of such loss or damage, or if such loss or damage could have been reasonably foreseen.
    3. Developer’s liability for any negligent acts, errors, or omissions is limited to the total fees paid by the Customer to the the Developer under this agreement.
  18. Termination
    1. Termination upon Notice. Either party may terminate this agreement for any reason upon 14 days notice to the other party.
    2. Termination for Cause. If either party
      1. commits a material breach or material default in the performance or observance of any of its obligations under this agreement, and
      2. the breach or default continues for a period of 30 days after delivery by the other party of written notice reasonably detailing such breach or default, then the non-breaching or non-defaulting party may terminate this agreement, with immediate effect, upon written notice to the breaching or defaulting party.
    3. Termination upon Insolvency. This agreement will terminate immediately upon the Developer’s insolvency, bankruptcy, receivership, dissolution, or liquidation.
    4. Effect of Termination
      1. Termination for Customer’s Breach. In the event of termination of this agreement due to a material breach or default committed by the Customer,
      2. the assignment of rights to the Customer in this agreement will terminate, and
      3. the Customer shall immediately stop using the Software and destroy or erase all copies in its possession or control.
      4. Termination for any other Reason. In the event of termination of this agreement for any other reason,
      5. the Customer will continue to exercise all rights to the Software that it has acquired under this agreement,
      6. the Developer shall immediately deliver to the Customer all Software, documentation, source code, and other Customer property in its possession relating to the Software and then destroy all copies in its possession or control, and
      7. the Customer shall pay the Developer for all services rendered and work performed up to the effective date of termination, unless the Customer has terminated for cause, in which case it will only be required to pay fair value. The Developer shall provide the Customer with an invoice for its fees within 30 days of the effective date of the termination, and the Client shall pay the invoice within 14 days of receipt.
  19. General
    1. Entire Agreement. This agreement contains all the terms agreed to by the parties relating to its subject matter. It replaces all previous discussions, understandings, and agreements.
    2. Amendment. This agreement may only be amended by a written document signed by both parties.
    3. Assignment. The Developer may not assign this agreement or any of its rights under it. The Customer may assign this agreement or any of its rights without notice or the need for the Developer’s consent.
    4. Remedies Cumulative. The rights and remedies available to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.
    5. Survival. Sections 13 (Confidentiality), 15 (Assignment of Rights), 16 (Indemnification), 17 (Limitation of Liability), and 18.4 (Effect of Termination), survive the termination or expiration of this agreement.
    6. Sever-ability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.
    7. Waiver. A party’s failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party’s rights.
    8. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of Tennessee, without regard to its conflict of laws rules.
    9. Waiver of Jury Trial. The parties waive their respective rights to trial by jury in any action or proceeding involving this agreement or the transactions relating to its subject matter.
    10. Headings. The headings used in this agreement and its division into articles, sections, schedules, and other subdivisions do not affect its interpretation.

This agreement has been signed by the parties.

Capital Technology Services (Registered as Chapin Technology Service LLC)

Signed : ________________________

Name : John Chapin

Title : President

Date :


Signed : ________________________

Name :

Title :

Date :

  • Both parts must sign above and keep a copy for their own records.