Freelancer Software Developer Agreement

Freelancer Software Developer Agreement

BS.FL.06A

This Freelancer Software Developer Agreement has been designed for use by an individual freelance software developer contracting personally to provide his services to a business client.

The accompanying Consultancy (Company) Software Developer Agreement template is to be used instead by the software developer when he contracts through his personal service company (or other intermediary company) rather than directly. (The information page with that template includes guidance about tax, employment status, IR35 and agency workers, where an intermediary company is used.)  

This agreement aims to reduce the risk that the freelancer might be deemed to be a de-facto employee of his/her client rather than a sole trader who is a self-employed contractor. However, whether he is treated by HMRC, a tribunal, or any other body, as self-employed will depend not only on what is contained in his contract but also on all other circumstances: those circumstances will include the way in which the contract is implemented and the conduct of the client, the freelancer and anyone the freelancer engages to do any of the work for the freelancer, and all related arrangements between them.

HMRC provides some guidance on its website about self-employment. Its decisions as to whether someone is a self-employed sole trader are often based on a “balancing exercise” in which it gives weightings to various factors. However, neither the HMRC guidance nor case law are sufficiently precise to enable anyone to predict how in any particular case the “balancing exercise” would be carried out or what HMRC’s conclusion would be about that particular case. For that reason we recommend that you take professional employment law, tax, and NIC advice in relation to your particular circumstances before you decide to use or adapt this template.

Nevertheless, a carefully worded contract ensuring the independence of the freelancer is a key starting point. As a self-employed freelancer (rather than as an employee of the client), the software developer is, for example, free to engage a suitably qualified person to do some or all of the work in his place, is free to determine when, where and how work is completed (subject of course to the client’s requirements), is free to take on other clients, and most importantly may be subject to penalties if the work is not completed on time

Payment under this agreement may take the form of a single flat fee or initial fee followed by a series of milestone payments. Moreover, the fee also serves as consideration for the assignment of the copyright (and any other IP rights) in the work produced by the software developer.

Each party provides warranties and indemnities to the other with regard to the non-infringement of third party intellectual property rights.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

This Freelancer Software Developer Agreement contains the following sections:

1. Definitions and Interpretation

2. Engagement of the Developer

3. Nature of Engagement

4. Self-Employment Status of the Developer

5. Fee

6. Intellectual Property

7. Developer’s Warranties and Developer’s and Client’s Indemnities

8. Client’s Warranties

9. Liability

10. Confidentiality

11. Termination

12. Nature of the Agreement

13. Severance

14. Notices

15. Alternative Dispute Resolution

16. Law and Jurisdiction

and the following schedules:

1. The Software

2. Client’s Materials

3. Name of any Consultant engaged by Developer

This document is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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