Software Development Contract Checklist for Business Owners

This is general information to help you read a contract, not legal advice. For any significant project, have a qualified lawyer review the agreement, especially if the parties are in different countries.

1. The parties and the structure

Using a master agreement with separate statements of work makes it easy to add phases later without renegotiating everything.

Key points

  • Full legal names and addresses of both sides
  • Which documents make up the agreement, for example a master agreement plus a statement of work for each project
  • Which law governs the contract, and where disputes are resolved
  • The order of priority if documents conflict

2. Scope of work

This is the heart of the contract.

If it is not written down, it is not in scope. Most disputes come from vague scope.

Key points

  • A clear description of what will be delivered: features, screens, user roles and integrations
  • An explicit list of what is not included
  • The platforms and technologies to be used
  • The assumptions made, such as "client provides all content" or "two rounds of design revisions"
  • The tools the team will use, and who pays for them
  • Reference to the designs, specifications or prototype that define the work

3. Timeline and milestones

Dates in a contract are targets that depend on both sides doing their part.

Key points

  • Start date and target delivery dates
  • Milestones with clear deliverables
  • What happens if either side causes a delay
  • Dependencies, such as "the client will provide access to X by date Y"
  • A process for adjusting the schedule when scope changes

4. Price and payment

See our guide on pricing models.

Key points

  • The pricing model: fixed price, time and materials or monthly retainer
  • Total price or estimate, and what it covers
  • A cap or a budget alert, for time-and-materials work
  • Payment schedule tied to milestones or delivered work
  • A reasonable upfront deposit, not a large share of the total
  • Invoice terms: due dates, currency, taxes and payment method
  • Late payment terms
  • How expenses and third-party costs are handled
  • Rates for extra work

5. Acceptance and quality

Without acceptance criteria, "finished" becomes a matter of opinion.

Key points

  • How each deliverable is reviewed and accepted
  • A defined review period, for example 5 to 10 working days
  • Criteria for "done," such as meeting the written requirements and passing agreed tests
  • How defects are reported and fixed during acceptance
  • What happens if the work fails acceptance repeatedly
  • Standards for testing and quality

6. Changes to scope

A simple, fair change process protects you from surprise invoices and protects the team from endless extras.

Key points

  • A written change request process
  • Each change is described, estimated for cost and time and approved by both sides before work begins
  • Who has authority to approve changes on each side
  • How changes affect the schedule and payments

7. Intellectual property and ownership

This is the clause that matters most when something goes wrong.

If a contract says you only get a license to the code you paid to build, question it.

Key points

  • You own the custom code, designs, documentation and other deliverables, from the moment you pay or on completion, as agreed
  • The vendor assigns rights in writing, rather than merely licensing them
  • Third-party and open-source components are identified, with their licenses
  • The vendor keeps rights to its pre-existing tools and general know-how, with you receiving a license to use anything of theirs that is embedded in your product
  • Repositories, hosting, domains, app store and cloud accounts are in your name
  • You receive source code, documentation and credentials at handover

8. Confidentiality and data protection

Both sides keep each other's confidential information private. Rules on how your data and your customers' data are handled and stored. Security practices the vendor will follow. Compliance with laws that apply, such as GDPR (the EU's data protection law). A data processing agreement, where personal data is involved. What happens to your data when the contract ends. Requirement to notify you promptly of any security incident

9. Team and subcontractors

Key people named, with their roles. Notice and handover if a key person is replaced. Approval needed before the work is passed to subcontractors. The vendor remains responsible for subcontractors' work. Exclusivity or non-solicitation clauses are reasonable, if present

10. Warranty and support

A warranty period, often 30 to 90 days, during which defects are fixed at no charge. A clear definition of a defect versus a new feature request. Ongoing support and maintenance terms, if any: response times, hours and cost. Service levels for critical issues. What is excluded from the warranty, such as problems caused by third-party changes

11. Liability and insurance

Liability terms are an area where legal advice is worth the cost.

Key points

  • A limit on each side's liability, commonly linked to the fees paid
  • Exclusions for things such as breach of confidentiality or intellectual property infringement, which are often treated separately
  • The vendor holds appropriate professional and cyber insurance
  • The vendor confirms the work will not infringe third-party rights

12. Termination and exit

A good exit clause is a sign of a confident, fair partner.

Key points

  • How either side can end the contract, and how much notice is needed
  • Rights to terminate for serious breach
  • What you pay for if the contract ends early: work done to date
  • You receive all work completed so far, including code and documentation, even on early termination
  • A handover process, including a walkthrough and access to all accounts
  • Return or deletion of data and confidential material

13. Dispute resolution

A first step of talking things through between senior people. Mediation or arbitration before court, where suitable. The governing law and the location of any proceedings

14. Practical checks before signing

You understand every clause, or you have asked for it to be explained. The scope matches your brief and the proposal. The price and payment terms match what you were told. The names and dates are correct. A lawyer has reviewed it, for projects of meaningful size. Both sides sign, and you keep a full copy

Warning signs

The vendor keeps the code until the final payment, or only licenses it to you. Large upfront payments with no milestones. No acceptance process. Unlimited fees for changes with no approval step. No exit or handover clause. Vendor-owned accounts for your hosting and app stores. Unusually broad non-compete or exclusivity terms. A refusal to adjust anything

Next step

Want to know how we structure our agreements, including ownership, milestones and exit terms? Ask us. We'll share a plain-language outline before you commit to anything. Talk to DECHY.