Software and Website Development Agreement: How do I draft the Services and Fees clauses?

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• Services clause
• Fees clause 
• Conclusion

A Software and Website Development Agreement is an agreement between a service provider who is creating the software and website and a client who will be using the software and website for a particular purpose. Development of software and websites can be a time-consuming and expensive process and it is important that there is a detailed services and fees clause in the agreement because you want to know exactly what you are getting for your money.

Services clause

The services clause needs to detail:

• what services are being provided by the service provider;
• the phases of development for the service provider to be able to create the final product; and
• the expected completion date of each phase.

Having a clear timeframe for services to be completed will help minimise the opportunity for disputes between the service provider and client.

If you are the client and you have special requirements for your final product, this should also be set out in the services clause so the service provider is aware of the specifications that the final product must contain. In the event that the final product does not have the specifications that you requested, it may be grounds for you to (i) terminate the Software and Website Development Agreement, and (ii) obtain a refund for the services under the Australian Consumer Law. Whether or not you are entitled to terminate or obtain a refund will be determined on a case-by-case basis.

Fees clause 

How fees are charged is important for both the service provider and the client. The service provider wants to get paid and the client wants to know what they have to pay.

Every service provider will have their own way of charging fees. Some service providers may provide a fixed fee package which includes an agreed set of services with anything outside the scope being an additional fee payable by the client, some service providers may charge on an hourly rate, and some service providers may charge specific fees for specific requests.

Just as every service provider has a different fee schedule, every service provider will also have a different invoicing/payment system. Some may require payment upfront, some require a deposit and the balance at completion, and some service providers may invoice on a weekly/fortnightly/monthly basis. Regardless of how each service provider wishes to invoice, their payment system should be clearly set out in the Software and Website Development Agreement so that clients are aware of when invoices will be issued and what the payment terms are.

If, after the software and website have been developed, and the service provider offers other services, such as hosting and/or maintenance, then if the existing agreement does not cover these items, a new agreement should be entered into by both parties.

Conclusion

Disputes often arise because service providers and clients are unclear on the services being provided and what fees will be charged for what services, and sometimes clients will dispute fees for additional services because from what they understood, such additional services should have been included.

If you are entering into a Software and Website Development Agreement, whether as a service provider or a client, we recommend that you have this reviewed by an IT lawyer. At LegalVision, we have lawyers who are experienced in IT law, and will be able to provide you with timely and accurate legal advice.