Software Development Agreement Checklist (Pro-Developer) - Practical Guidance Checklist

Sep 16, 2026

A practical checklist for drafting and negotiating a software development agreement from the developer’s perspective. It focuses on custom software the customer controls and uses on its systems, and excludes hosted, government, regulated, and non-US use scenarios. Key topics include confirming parties and third-party involvement, defining project scope and requirements, governing design, build, testing, deployment, and milestone planning, then specifying deliverables, pricing models, ancillary expenses, and payment terms such as invoicing, currency, timing, interest, collections, and taxes.

LanguageEnglish

CategoryLetters

FormatPDF

Pages7

Reading Time3 min

AccessFree to download

Initial Considerations

Parties

Third-party guarantees

Project scope

Requirements analysis

Design

Build/development

Testing

Implementation/deployment

Milestones

Deliverables

Reference to milestones

Timing

Progress payments

Delivery

Acceptance testing

Pricing

Ancillary Expenses

Payment

Practical Guidance® Software Development Agreement Checklist (Pro-Developer) A Practical Guidance® Checklist by Sonia Baldia, Kilpatrick Townsend & Stockton LLP Sonia Baldia Kil patrick Townsend & Stockton LLP A software development agreement is a contract for the design, development, testing, installation, and implementation of custom software, or maintenance or modification of currently existing software. This checklist highlights key issues, from the developer’s perspective, in drafting and negotiating a software development agreement. For amore detailed discussion on the key issues in drafting and negotiating a software development agreement, see Software Development Agreement Negotiating and Drafting. This checklist addresses only software that a customer control s and uses on its systems. This practice note does not address situations when the customer: • Controls or uses the software on a system hosted by the software developer or any third party • Is a government entity • Must comply with industry-specific regulations, laws, or restrictions to use the software • Uses or accesses the software outside of the United States Initial Considerations • Parties. Confirm each party’s legal status and whether any third parties (such as group affiliates) will benefit from the proposed agreement. • Third-party guarantees. confirm whether any third party will guarantee the customer’s performance or financial obligations. • Project scope. Unambiguously describe what the developer will create as a defined term in either the preamble, the definitions section, or in a stand-alone section at the beginning of the document. • Requirements analysis. The parties should document a set of requirements describing the customer’s business objectives and the role the software will play in meeting those objectives. • Design. Ensure the developer determines the technical details of how the software will perform and create a set of software design documents on which it will rely to build the software. • Build/development. The developer should determine the programming language it will use for coding the software • Testing. Structure this phase as an iterative process, where the developer tracks and reports any deficiencies, bugs, or defects uncovered during quality assurance testing, and then fixes and re-tests the software until it resolves the problems. • Implementation/deployment. Understand how the parties intend to deploy the software and whether the developer will initially deploy the software in stages by releasing it to only a limited number of the target users ata time. • Milestones. Use milestones to define the crucial project tasks to be completed during project planning, as well as to specify the activities to be performed and completed by the parties at certain key points throughout the life cycle of the project. Deliverables Include a list of tangible items that the parties deliver during the software development process. Consider the following issues when determining the deliverables: • Reference to milestones. The parties typically refer to project milestones, previously agreed on, to create this list. A deliverable is a measurable and verifiable item that a party undertakes to help achieve that milestone. The parties may need to produce one or more deliverables to achieve a specific milestone. • Timing. Prepare the list of deliverables after the parties agree on the requirements specifications, and include specific due dates for the completion of each deliverable. • Progress payments. If the parties structure the agreement to include progress payments, ensure that the successful delivery of the items described in the deliverables are determined by objective specifications that the parties have mutually agreed on, not the subjective opinion of the customer. • Delivery. Avoid arbitrary deliverable delivery dates, and instead negotiate dates that realistically reflect the time needed f

FAQs

What types of software does the checklist cover, and what situations does it exclude?

It covers custom software the customer controls and uses on its own systems. It excludes cases where the software is hosted by the developer or a third party, where the customer is a government entity, where industry-specific regulations restrict use, and where the software is used or accessed outside the United States.

How should project scope and requirements be documented?

Project scope should be unambiguously defined as a defined term in the agreement, such as in the preamble, definitions, or an early standalone section. Requirements should document the customer’s business objectives and the role the software will play in meeting those objectives.

What guidance is provided for pricing and payment terms?

Pricing is typically negotiated as time and materials or fixed price. For payment terms, the checklist advises addressing how customers pay invoices (currency and wire/check instructions), when payment is due, whether interest applies to overdue balances, responsibility for collection costs, and taxes related to the customer’s use, and it emphasizes periodic payments rather than a single end-of-project lump sum.

Sep 16, 2026

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