What Is A Software Development Agreement? (2025 Updated)

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Have an online business or online presence? In 2025, if your business requires an app, website, or other custom software solution, you’ll most likely need to hire a developer to bring your vision to life.

This is where a Software Development Agreement comes in. Put simply, a Software Development Agreement is a specialised contract between your business and the developer tasked with creating your software, ensuring that both parties understand their roles, responsibilities, and expectations.

A comprehensive Software Development Agreement not only protects your intellectual property and confidential information but also establishes clear guidelines regarding deliverables, costs, and timelines. In today’s fast-moving digital landscape, it’s essential to have a robust agreement that adapts to emerging trends – from AI integration and cloud-based solutions to enhanced cybersecurity measures.

When Do I Need A Software Development Agreement?

Any time you engage a developer – whether they are a freelancer or part of a dedicated agency – to create software for your business, it is smart practice to secure a Software Development Agreement. This document ensures you receive what you’re paying for on schedule, whilst clearly defining the scope of the developer’s services.

Given that articulating the final product can be challenging – especially with evolving technology – a detailed agreement prevents misunderstandings and sets out expectations about revisions, additional costs for extra changes, and approval processes at each stage of development.

What Should I Include In A Software Development Agreement?

A solid Software Development Agreement should cover the scope of work, detailed specifications, and clear deadlines or milestones for your project. For example, you should outline the stages at which your approval is required before the developer proceeds (commonly known as acceptance testing).

It is also advisable to specify the number of revisions that are included without extra costs, as well as to incorporate clauses that protect your company’s intellectual property, enforce confidentiality, and set out any necessary restraint of trade terms. Don’t forget to include warranties and service level commitments in case issues arise with the software.

In 2025, as technology continues to evolve, it’s especially important that your agreement accounts for factors such as ongoing maintenance, regular updates, and compliance with the latest cybersecurity and privacy regulations. For further guidance on crafting a legally watertight contract, you might find our article on What is a Contract? helpful. Additionally, if your developer is engaged as an independent contractor, reviewing the Difference Between Employee and Contractor can help determine the best framework for your project.

Need Help With Your Software Development Agreement?

If you’re looking for expert assistance, we can draft a Software Development Agreement tailored specifically to your business requirements – with fixed-fee packages designed for clarity and peace of mind. Whether you’re also in need of accompanying documents like Website Terms and Conditions or a comprehensive privacy policy (Privacy Policy) to support your online operations, our friendly team is here to help.

To discuss how a bespoke Software Development Agreement can secure your project and safeguard your business’s interests in 2025 and beyond, contact our legal consultants on 1800 730 617 or email us at team@sprintlaw.com.au.

Justine Wu

Justine is a legal consultant at Sprintlaw. She has experience in civil law and human rights law with a double degree in law and media production. Justine has an interest in intellectual property and employment law.

Amelia Abbott

Amelia is a commercial lawyer with a background in major projects, IP and IT outsourcing. Before joining the Sprintlaw team, Amelia worked at two national law firms and completed her studies in Law and Psychology at the Australian National University.