Software and Website Development Agreement: How do I draft the Supplier Warranties and Indemnity clause?

Having a software and website developed can be very expensive. If you are looking to have your software and website developed, you should make sure that you enter into a Software and Website Development Agreement with your developer with a detailed warranties and indemnities clause so that you can rest assured knowing that the software and website produced will be of a particular quality.

Warranties clause

As a customer, you have rights to expect that the software and website provided to you will meet certain specifications.

The warranties clause in your Software and Website Development Agreement should cover standard requirements under the Australian Consumer Law, such as the developer warranting that the services will be provided with due care and skill and that the final product will be fit for its purpose. Additionally, the developer may also warrant that:

• the software and website created will not contain any viruses or bugs;
• the software and website will meet any agreed specifications;
• testing will be conducted at every development phase to ensure, to the best of its ability, that certain issues will be detected and rectified;
• creative work will be original work and will not infringe a third party’s intellectual property rights; and
• it has rights to use all third party intellectual property that will form part of the software and website.

Warranties are important, as you may be paying a significant sum of money to have your software and website developed. Having these warranties clearly set out in your Software and Website Development Agreement will help ensure that your developer is aware of your expectations and if the developer significantly breaches any of these warranties, you will be able to exercise your rights to either terminate the agreement or request a repair/refund.

Warranties in relation to intellectual property are especially important as you may not be aware of what intellectual property goes into the development of your software and website. It is the developer’s responsibility to ensure that it either owns or has the correct licenses to use the intellectual property which has been inputted into the software and website.

You should also make sure that the supplier undertakes and warrants to remedy errors post-completion of the software and website. This undertaking and warranty should be valid for a reasonable period after the launch of the website, generally 6 to 12 months. This provides you with the opportunity to address problems that come up.

Indemnity clause

The warranties and indemnity clause go hand in hand. As the developer is required to provide certain warranties, the developer needs to indemnify you against its breach of the warranties. This may include indemnifying you against all costs (including legal costs), expenses, damages, accounts or other losses or liability, including those from any actions, suits, proceedings, claims or demands, made against or suffered by you arising out of the developer’s breach of any of the provisions of the agreement.

Conclusion

Having well-drafted warranties and indemnity clauses in your Software and Website Development Agreement will help ensure that you are receiving quality products and services for the money you are paying! If you require assistance in drafting a Software and Website Development Agreement, or if you are entering into a Software and Website Development Agreement and want to have it reviewed, contact us on 1300 544 755 and speak with one of our experienced Contract Lawyers.