Freelance Software Developer's Agreement
This Freelance Software Developer's Agreement has been designed for use by a freelance software developer contracting through a personal service company (or other intermediary company) to provide his services to business clients rather than contracting directly as an individual. (The accompanying template, the Freelance Software Developer's Contract, is to be used instead when the software developer is an individual).
The data protection provisions in this document have been updated with reference to the UK GDPR.
The Data Protection provisions in the document reflect data protection law requirements. One of those provisions refers to a Privacy Notice available on request. You might wish to use the standard Privacy Notice for this purpose: you can find it by clicking here.
This agreement aims to reduce the risk that, under employment law and any other applicable law, despite use of a personal service (or other intermediary) company, the software developer is regarded as an employee as opposed to a self-employed contractor.
Nevertheless, he might still be treated as an employee by HMRC, an employment tribunal or any other body, and legislation (such as IR35, agency worker, or other rules) might still apply in a way which adversely impacts the software developer’s or his company’s legal, tax or NIC position. Whether that is so will depend not just on what is contained in this contract but also on all other circumstances. Those circumstances may include the way in which the contract is implemented, and all arrangements between the company, the client, and the software developer.
HMRC provides some guidance on its website about employment, self-employment, IR35, and agency workers. Its decisions on these points 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, before you decide to use or adapt this template, you take professional advice in relation to your particular circumstances as to any impact on the company and the software developer of employment law, tax, and NIC rules.
A carefully worded contract ensuring the independence of the company is still a key starting point. Unlike an employee, the company is an independent contractor which is free to provide any suitably qualified person rather than only the software developer or any other particular individual having to do the work, it is free to determine when, where and how work is completed (subject of course to the client’s requirements), it is free to take on other clients, and, most importantly, it 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 to the client of the copyright (and any other IP rights) in the work produced by the software developer. This assignment by the software developer to the client of all copyright and other IP rights in the work means that the client will own all of those rights exclusively, and so the client will be free to use and exploit the work as it wishes. The software developer is not granted any right to use or exploit any of the work, and consequently will not have any right to make any use of any of the work for their own (or any third party) purposes.
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 Freelance Software Developer's Agreement contains the following sections:
1. Definitions and Interpretation
2. Engagement of the Developer
3. Nature of Engagement
4. 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. Data Protection
12. Data Processing
13. Termination
14. Force Majeure
15. Nature of the Agreement
16. Severance
17. Notices
18. Alternative Dispute Resolution
19. Law and Jurisdiction
and the following schedules:
1. The Software
2. Client’s Materials
3. Name of any named Consultant engaged by Developer
4. Data Processing
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