With the popularity of smart devices, if you have the requisite tech and creative skills, developing applications can be a great way to make money. But before you start developing applications for clients, you should make sure that they enter into a legally binding contract which clearly sets out the rights and obligations of each party. The type of document that you will need is what we call an App Development Agreement (AD Agreement).

A well-drafted AD Agreement will address all the following items.

Services and App Specifications

What services you will provide, and what the client needs you to do, need to be set out clearly in the AD Agreement. Applications can be complex. Your client’s requests should be noted to avoid disputes in the future. A clear scope will also help you determine the correct price for your services based on the complexity.

Development Phases

After you and your client have worked out what needs to be done, you need to set out a schedule for your client. The schedule needs to detail each development phase and milestone, and also the expected completion date or turnaround time for each phase. This should be done for any application, regardless of how simple or complex it is.

Alterations and Additional Services

As there could be changes throughout the application development process, it is important for you to set out a procedure in your AD Agreement if your clients require any alterations or additional services from you. It is wise to require your client to provide you with a written notice of what is requested. You will then have the option of accepting or rejecting this additional work. If you choose to accept it, you should also set out the variation in pricing and have your client sign off on it.

Acceptance Testing

You need to decide how acceptance testing of the application will be done. Will you test this app alone or will it be done under the supervision of the client? Will acceptance testing be performed for each phase or only towards completion of the development? It is important that acceptance testing is performed as the final application must, at the very least, meet the development specifications you’ve set out under the AD Agreement.

Payment

This is the most important clause for any business. In your AD Agreement, you need to clearly set out your payment terms and when you expect to be paid. Will you invoice your client each time a milestone is met? How many days will your clients have to pay their invoices? What steps can you take, e.g. engaging debt collection services, if payment is not made within a certain time frame? This clause needs to be well-drafted to ensure that you are able to enforce your rights to be paid for your services.

Intellectual Property

This is important in any creative business. If you develop an application for your client, your client will want the intellectual property rights of the final product. You should insert a clause into your AD Agreement which states that you agree to assign ownership to your client, but only upon full payment of your invoices. You can also indicate that any work that you create and produce to your client, but is rejected or does not proceed, remains your intellectual property.

Confidentiality

This a clause which benefits both parties. Developing an application for your client means that you will have access to confidential information, and throughout the process, you client may also gain access to some of your confidential information. This clause will prevent both parties from disclosing any confidential information about the other and to only use the confidential information for the purpose that it was disclosed.

Website Terms of Use

If your business has a website, you need a Website Terms of Use. These apply to every website visitor, protect your website and limit your liability for your website. The Terms claim your copyright and intellectual property rights, and set out permissible and prohibited uses of your website, including that competitors cannot use your website information.

Privacy Policy

If you collect, use and disclose personal information from customers, including using the information for direct marketing, you need a Privacy Policy, to assist you to comply with the Privacy Act.  The Privacy Policy is between you and each person that you collect personal information from. It sets out what personal information your business collects, how this information is used, and under what circumstances the information will be disclosed to third parties.

To conclude

App development is a complicated process. The AD Agreement is quite a complex document. To protect your rights as an app developer, it is important that you have an experienced business lawyer assist you with drafting the AD Agreement.

Ursula Hogben

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