How to choose a software development contract
In practice, we often have to deal with various software development agreements . Usually for placing an order for the development of software products, a paid service agreement, a contract agreement or an author's order agreement (the author's agreement) are used.
Which of them is correct and what is the risk of a mistake when choosing a contract?
The service contract is in principle not suitable for this role, since its subject is the implementation of certain activities, and not the creation of software and the transfer of rights to it. Services by definition are sold and consumed in the process of their rendering and have no material expression. Of course, as a result of the provision of services, software can also be created, but such activity is secondary and, accordingly, the customer’s rights to such software are not properly protected under the contract for the provision of services.
In contrast to the service contract, the possibility of using it for the development of software for a contract of work is expressly provided for in article 1296 of the Civil Code of the Russian Federation. The subject of such a contract is to perform specific work on the creation of specific software on the instructions of the customer. The result of work, in contrast to services, is always a certain material object. In this case, this result is software with the characteristics required by the customer.
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Thus, the contract for the creation of software is mainly aimed at developing such software in strict accordance with the requirements of the customer, set out in the technical documentation, and its subsequent transfer to the customer. Here the performer is focused on the result, not the implementation ofimitation activities. In addition, because the contract is aimed at the transfer of the developed software to the customer, at the same time the customer receives the exclusive right to custom software as a result of intellectual activity, unless otherwise provided by agreement of the parties.
An authoring contract can also be used to create software. However, unlike the contract for software development, the author's agreement is concluded directly with the author, i.e. an individual.
Since the author as a person whose creative work creates software is traditionally considered to be the weaker side in a transaction than the customer, the legislation provides him with a number of advantages (see Art. 1288 - 1290 of the Civil Code of the Russian Federation). In particular, under a copyright agreement, software rights are not automatically transferred to the customer, but are retained by the author. Therefore, provisions on the transfer of rights to the software in full must be directly included in the contract of authoring order.
However, this does not mean that in case of working with a freelance programmer, it is better to enter into a contract agreement. On the contrary, such an agreement may be challenged, since in the law for the formalization of relations with the author, a different contract is explicitly provided, which initially provides the customer with fewer benefits.
If earlier there were still disputes between lawyers on this issue, then from September 1, 2014, the article on the contract for the creation of works was specifically added with paragraph 5, which explicitly states that the rules of this article do not apply to contracts in which the contractor (performer) is the author of the work itself.
Thus, when choosing a contract design, it is necessary to pay attention to the following points:
1) what is the direct subject of the order, and
2) who acts on the side of the performer.
If the subject of the order is a specific software, the service contract is not appropriate, since the latter is aimed at a certain kind of activity in which the result has a secondary role. Accordingly, the contract for the creation of works and the contract of authoring order remain.
If a natural person (author) is hired as a performer, including in the status of an individual entrepreneur, the contract is eliminated, since the law explicitly indicates the need for concluding an author's contract in this case.
What risks do the parties bear in case of an error when concluding a contract?
In such a situation, adverse consequences arise, first of all, with the customer, who relied on the fact that the signed contract is final and protects it in full.
However, when concluding a contract for the provision of services, the contractor, based on the law, has the right to demand additional payment for the alienation of rights to the software transferred to the customer. Similarly, the author can do when concluding a contract with him instead of the contract of the author's order.
Therefore, be careful when choosing a contract for software development, because an error may cost you rights to such software or additional expenses.
Which of them is correct and what is the risk of a mistake when choosing a contract?
The service contract is in principle not suitable for this role, since its subject is the implementation of certain activities, and not the creation of software and the transfer of rights to it. Services by definition are sold and consumed in the process of their rendering and have no material expression. Of course, as a result of the provision of services, software can also be created, but such activity is secondary and, accordingly, the customer’s rights to such software are not properly protected under the contract for the provision of services.
In contrast to the service contract, the possibility of using it for the development of software for a contract of work is expressly provided for in article 1296 of the Civil Code of the Russian Federation. The subject of such a contract is to perform specific work on the creation of specific software on the instructions of the customer. The result of work, in contrast to services, is always a certain material object. In this case, this result is software with the characteristics required by the customer.
')
Thus, the contract for the creation of software is mainly aimed at developing such software in strict accordance with the requirements of the customer, set out in the technical documentation, and its subsequent transfer to the customer. Here the performer is focused on the result, not the implementation of
An authoring contract can also be used to create software. However, unlike the contract for software development, the author's agreement is concluded directly with the author, i.e. an individual.
Since the author as a person whose creative work creates software is traditionally considered to be the weaker side in a transaction than the customer, the legislation provides him with a number of advantages (see Art. 1288 - 1290 of the Civil Code of the Russian Federation). In particular, under a copyright agreement, software rights are not automatically transferred to the customer, but are retained by the author. Therefore, provisions on the transfer of rights to the software in full must be directly included in the contract of authoring order.
However, this does not mean that in case of working with a freelance programmer, it is better to enter into a contract agreement. On the contrary, such an agreement may be challenged, since in the law for the formalization of relations with the author, a different contract is explicitly provided, which initially provides the customer with fewer benefits.
If earlier there were still disputes between lawyers on this issue, then from September 1, 2014, the article on the contract for the creation of works was specifically added with paragraph 5, which explicitly states that the rules of this article do not apply to contracts in which the contractor (performer) is the author of the work itself.
Thus, when choosing a contract design, it is necessary to pay attention to the following points:
1) what is the direct subject of the order, and
2) who acts on the side of the performer.
If the subject of the order is a specific software, the service contract is not appropriate, since the latter is aimed at a certain kind of activity in which the result has a secondary role. Accordingly, the contract for the creation of works and the contract of authoring order remain.
If a natural person (author) is hired as a performer, including in the status of an individual entrepreneur, the contract is eliminated, since the law explicitly indicates the need for concluding an author's contract in this case.
What risks do the parties bear in case of an error when concluding a contract?
In such a situation, adverse consequences arise, first of all, with the customer, who relied on the fact that the signed contract is final and protects it in full.
However, when concluding a contract for the provision of services, the contractor, based on the law, has the right to demand additional payment for the alienation of rights to the software transferred to the customer. Similarly, the author can do when concluding a contract with him instead of the contract of the author's order.
Therefore, be careful when choosing a contract for software development, because an error may cost you rights to such software or additional expenses.
Source: https://habr.com/ru/post/289598/
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