You have come up with an excellent idea for a new virtual reality application and have found the perfect developer to assist with bringing your idea to fruition. However, before the developer begins providing the services, you want to ensure both of you understand what they are providing, how much it will cost, how long the project will take and who will own the deliverable. A strong development agreement can save you significant disagreements in the future. This article will run through the key points to look out for in a development agreement when engaging a developer to build your virtual reality application.
Services and Variations
If you are unclear about what the developer is building, you may end up with a virtual reality application that differs from what you wanted. The development agreement should clearly outline what is being made, including specifications of the intended functionality and design of the application. This is also an excellent way to guarantee that the developer has the necessary skills to provide the application within the specified timeline.
Furthermore, consider that what you envision may change. Thus, you should include the option to vary the scope or deliverables as the service progresses. However, the developer may not necessarily agree to this.
Timeline and Delays
Time is money, and knowing when the application will be ready to take to market is essential in readying all other aspects of your business. Development agreements often use the concept of “milestones” to set out key dates for the completion of each application development stage. For example, this might include a milestone for:
- finalising the design;
- the first version; or
- the completion of acceptance testing.
It is just as important to understand what happens if the developer fails to meet these timelines. The contract should outline who is responsible for any additional costs incurred. For example, consider whether you be liable to pay additional charges if it is due to a variation in the services. Alternatively, if the developer has committed to a fixed fee, determine whether they must absorb the costs of their delay.
Continue reading this article below the formCosts
Price certainty can be beneficial in the chaos of running a business and managing your expenses. If you can receive a fixed rate for the development of your virtual reality application, that is ideal. Otherwise, the costs might be charged at an hourly or daily rate, as required by the developer.
The next consideration is when the fees are payable. Ideally, you pay for the deliverables on completion or, if relevant, at each milestone. Alternatively, the developer may charge you weekly or monthly for the services provided in the preceding period.
Acceptance Testing
Acceptance testing takes a test run on the application before signing off on its completion or the completion of a milestone. This is an excellent way to guarantee that the virtual reality application meets your expectations before paying or finalising it.
Confidentiality
Your developer will likely have access to important data. Therefore, your development agreement should include obligations that the developer keeps all information that you provide them or that they access while building the virtual reality application confidential.
Intellectual Property
Since you are paying to create the virtual reality application, you should own the end product. Therefore, you should look out for the intellectual property clause in your development agreement and ensure that the intellectual property in the deliverables is assigned to your business. This allows you to exploit, sell, update and use the application in any way you see fit.
This fact sheet outlines your rights and obligations as an AI artist regarding intellectual property and copyright.
Termination
In the event that anything goes wrong, you want to know that you can exit the arrangement. First, review the termination rights provided in the development agreement and ensure they match your expectations. Determine whether you can terminate for breach of the agreement. Furthermore, clarify whether you can terminate at any stage for dissatisfaction.
Key Takeaways
When engaging a developer to build your virtual reality application, you must ensure your development agreement protects your commercial interests. This includes accounting for variation options, delays, costs, confidentiality, use of your intellectual property and a suitable termination clause. This is only a high-level list of some of the clauses you should look out for in a development agreement.
If you need help with development agreements, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The development agreement should specify the process in the event of a delay. This will depend on various factors, including the fee structure, the scope of the services, any variation to services that have been requested and acceptance testing.
A well-written development agreement will include a dispute resolution process. That process will cover steps for resolving any conflict in good faith and going through a mediation process before escalating the issue to litigation.
We appreciate your feedback – your submission has been successfully received.
