If you develop software which is bought or licensed by a purchaser, you enter into an agreement with them. The agreement will detail the Terms and Conditions of the transaction between the App purchaser and App developer. If the transaction is made on the basis of both parties agreeing to these Terms and Conditions, then both parties are bound to these terms.

This article provides an introduction to what an App Design Agreement is, and explains the terms and conditions contained in typical App design agreements.

Software Ownership

Ownership is one matter which you will need to get sorted out before any agreement is finalised. The terms and conditions of the App design agreement need to specify what happens to the rights, interests and title in the software when the buyer purchases the app. In some cases, there will be complete passing of title, whereas in other cases, a simple licence will be allocated with specific use restrictions attached.

This section should also address issues of copyright, patents and trademarks.

Program Materials

The agreement needs to lay out what is actually being provided to the buyer and explain what software, software development kits, documentation and programming interfaces are being sold under the deal.

Type of engagement

In most cases, the app developer is an independent contractor and not an employee. This means the buyer is not liable for the acts of the developer. It is important that you explain in the terms and conditions that you are not involved in a partnership, joint venture or business partnership.

Changes

Your App terms and conditions need to outline what will happen in the event of any changes and any additional expenses which you might incur as a result.

Compensation and Fees

The App terms and conditions should explain that fees will be paid subject to quote, and should also detail any other out-of-pocket expenses which might be covered.

Confidentiality

In terms of which party owes the other obligations of confidentiality, this will usually depend on who has title to the product. Confidentiality will need to cover the full range of information associated with the app including trade secrets, date, documentation, flowcharts, algorithms, marketing plans, program codes, budgets etc.

This section should also detail any consequences of a breach of the confidentiality provisions in the agreement.

Training

In some cases, the buyer will require that the developer provides their employees with training on the use of the software. The terms and conditions should outline whether training is included as part of the agreement, and whether the developer will be compensated for this training.

Prohibitions

Make sure your terms and conditions include any necessary restrictions on the use of the program – including reverse engineering, disassembling or decompiling.

Limit liability

It’s always good to make sure you have a liability waiver for any loss of content or data. This term should limit the amount which a developer will be liable for if there are problems with the software.

Conclusion

App terms and conditions contained within an App Design Agreement should cover a range of matters so they can best protect your interests. If you want to get App Terms and Conditions drafted or reviewed, then please contact an experienced business lawyer at LegalVision.

Lachlan McKnight
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