Providing virtual reality services to consumers can be equally challenging and rewarding. While being the first to market is a priority, ensuring you fulfil your legal obligations is equally important. One such consideration is the agreement you have in place with your clients. Getting your client agreements right from the beginning means that you save yourself a headache in the future by avoiding potential disputes or financial losses. If you are providing augmented reality and virtual reality services, then protecting your technology and intellectual property are key inclusions in your contracts with your customers. The terms and conditions attached to using your services should be clear and easy to understand. This is good from a legal and commercial point of view.
This article will take you through the key details to include in your augmented reality and/or virtual reality service agreements.
Services
While it might seem obvious, not having a clear scope of work is often the first issue to arise from poorly drafted client agreements. Hence, you should make sure that your customers understand what you are providing.
Software development can often be a complex process with the potential for inclusions to be outside your customers’ technical expertise. This means that understanding when the work is complete or whether the customer can request a certain amount of changes can sometimes be a point of contention.
Payment and Cost Limits
Customers are always looking for cost certainty. Thus, it may be beneficial if you can provide a fixed-fee price. However, this is not always possible for software development and implementation. If you cannot offer fixed-fee pricing, ensure your payment terms are based on a schedule of rates and that the payment or invoicing process is clear.
On the other hand, you might provide the services on a milestone basis. For example, if you are developing augmented reality for your customer’s warehouse or store, consider including milestones for each environment you develop. Alternatively, your milestone may be finalising the software or each applicable delivery stage. This is a useful way to receive payment as you go, and the customer can see the progress in real-time.
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If cost certainty is the most desirable aspect of development services, time certainty is a close second. We have all heard stories of software taking years to develop or blowing way out of schedule. Customers may prefer if you include guaranteed delivery times but ensure you are realistic about it. As the service provider, you should protect yourself from unforeseen events or delays, so provide guidelines instead.
We recommend including clauses that outline what happens in the event of a delay. Furthermore, you should specify who is responsible for any additional costs.
Client Responsibilities and Obligations
Even though you are the service provider, you will inevitably require certain things from the client to provide the services. For example, you may require logins or codes from the customer to begin developing the virtual reality. Make any customer responsibilities clear, so the customer understands what they need to provide. It will save time and confusion if you begin the project and the customer has their backend login details ready to go.
Acceptance Testing
Suppose you have finished the project, but the client wants something different, or there is a bug in the code. As you will know, the tweaks and updates of the augmented or virtual reality software you have created could be endless. Accordingly, we suggest having an acceptance test clause that specifies the amount of time that the customer has to troubleshoot the software, after which time, the deliverable will be deemed as delivered.
Intellectual Property Rights
Whenever you are dealing with someone else’s brand, you need to have the correct licenses to use their branding and other intellectual property. In addition, you need to outline who will own the intellectual property in any of the materials created during the provision of the services. Often, clients will want to own any materials you create for their brand, but it is probably useful for you to have a licence to use their materials in your portfolio or on your website. If so, you will need a licence that gives you this ability.
Confidentiality
Since you will have access to important company information, you want your clients to feel comfortable sharing details about their business. This is most easily achieved through a confidentiality clause. There is no need for a separate confidentiality agreement or non-disclosure agreement.
Subcontracting
If you plan on subcontracting any portion of the services, then you should spell this out in your terms and conditions. It is not necessary to specify the subcontractors you will be using. However, some clients may require written approval before you engage any third-party contractors.
Dispute
A reality of operating a business is that you will encounter some kind of dispute at some point in your tenure. You can mitigate this risk by having a detailed dispute resolution process in your terms and conditions. The best dispute resolution clauses require mediation before either party can commence a claim in court. This is a significantly cheaper option for both parties, and most disputes are resolved in mediation.
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Key Takeaways
You will keep your customers happy by having a succinct and well-drafted client agreement for your augmented reality or virtual reality services. Additionally, you will minimise the risk of disputes or unforeseen costs to your business.
If you need help with your client 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
Your IP clause should clearly outline concepts for the developer’s pre-existing IP, the client’s IP (such as their logo or branding materials), and the developed IP. From there, there should be clear licenses for the use of the respective types of IP.
You do not need an NDA as well as a client agreement. Typically, client agreements will include confidentiality clauses with the same protections that an NDA provides. However, if you share important information before entering the client agreement, you may consider signing an NDA.
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