Software & I.T. Development Agreements
Why Does My Company Need a Comprehensive I.T. Agreement?
Whether you are a Massachusetts software developer creating custom applications or a Boston company hiring a vendor to build a website or software custom-designed software, the I.T. development process can be very complex. The development process is rarely problem-free. Problems come in all shapes and sizes. These can include delays, cost overruns, re-designs, personnel retention, intellectual property, and payment. If not handled properly, you may find yourself heading for the courtroom and a lengthy and expensive legal battle.
Only 9% to 16% of software projects are completed on-time and within their original budgets. A study by the Standish Group estimated that 31% of I.T. projects were canceled before they are ever completed. Almost 53% of I.T. projects will cost almost twice their original estimates. These numbers do not surprise anyone in the I.T. industry.
The costs of delay and cancellation include lost opportunity and the loss of capital invested in the project. The larger the I.T. system, the greater the chance that the project will fail. In another study, researchers found that as I.T. project size increased (100,000 lines of code or more) the failure rate was greater than 65%. It’s not surprising that I.T. development projects often lead to litigation when things go wrong.
How Do I Protect My Company from the Risks of I.T. Development?
Recognizing what these risks are at the outset is key. You must carefully determine the rights and responsibilities between the developer and company in advance to avoid problems during the development process. Some common concerns to address with your attorney include:
- Should the project be a time & materials or deliverables contract?
- What is the proper scope of the project?
- How and when will money be spent?
- What are the payment schedules and milestones and what contingencies affect them?
- When is performance considered to be complete?
- What are the issues surrounding ownership and licensing of intellectual property?
- What are the indemnification and warranty obligations?
- How can the use of open source affect the project?
- How can the contract be terminated if the project doesn’t go well?
Engaging qualified legal counsel before development starts is key to anticipating and avoiding problems. As your attorney, we will help you take all relevant risks and factors into consideration and present you with options and alternatives.
Frequently, litigation is a breakdown of the parties’ relationship due to failed or unresolved expectations. Those expectations could have been explored carefully before the contract was signed. Once litigation begins, disentangling yourself from the contract, if possible, is much harder, more time-consuming, and expensive. While there is no such thing as a perfect contract, engaging qualified legal counsel can help ensure that your contract is better suited to meet your needs.
Our focus on software and I.T. development means that, whether you are a developer or are hiring a developer, we can help you better protect your interests at all stages of the development process. We know where the difficulties lie before the contract is signed. You cannot wait until the project fails to learn that your company has limited or no recourse. Of course, if litigation becomes unavoidable, rest assured that your interests will be protected and that we will represent you at every stage in the proceeding.
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