Software Development Agreement Template (India) — Free Format
A software development agreement governs custom development of an app, website or system: specifications, milestones, acceptance testing, fees, source-code ownership, warranties and maintenance. This template is written for Indian clients engaging development agencies or freelancers.
Stamp, registration and e-sign at a glance
The three things to settle before anyone signs this agreement in India.
Payable under the stamp law of the state where it is signed; rates vary by state. Unstamped, it cannot be used as evidence until duty and penalty are paid.
Check your state's rateRegistration is not required.
This agreement can be signed electronically with Aadhaar eSign or a DSC under the Information Technology Act, 2000. Electronic signatures listed in the Act's Second Schedule carry a presumption of reliability.
What cannot be e-signedWhat is a Software Development Agreement?
The key risks in development are unclear scope and who owns the code. This agreement ties payments to accepted milestones, assigns custom code to the client on payment, and requires disclosure of open-source components.
When to use it
- Commissioning a mobile app or web platform
- Outsourcing development of an internal tool
- Hiring an agency for a defined product build
Key clauses checklist
Make sure your draft covers each of these. Linked clauses open a sample wording with drafting tips.
- Specifications and change requests
- Milestones and acceptance
- Fees Sample clause
- Source code and IP assignment Sample clause
- Warranty and bug fixing Sample clause
- Confidentiality Sample clause
- Limitation of liability Sample clause
Indian law notes
Copyright in software
Software is a literary work under the Copyright Act, 1957. Code written by an external developer belongs to the developer unless assigned in writing under Section 19, so the assignment must cover source code, documentation and all modifications.
Open source
Some open-source licences impose obligations on distribution of modified code. Require the developer to list all open-source components and their licences.
SOFTWARE DEVELOPMENT AGREEMENT This Software Development Agreement is made on [Date] between [Client Name], [address] (the "Client") and [Developer Name], [address] (the "Developer"). 1. PROJECT The Developer shall design, develop, test and deliver [describe software] (the "Software") in accordance with the specifications in Schedule 1. 2. MILESTONES The project shall be delivered in the milestones set out in Schedule 2, each with a delivery date and acceptance criteria. 3. CHANGE REQUESTS Changes to the specifications require a written change request agreed by both parties, recording the impact on fees and timelines. 4. ACCEPTANCE TESTING The Client shall test each milestone within [10] business days of delivery and either accept it or list defects. The Developer shall fix defects and redeliver within [10] business days. A milestone is accepted when the Client confirms in writing or uses it in production. 5. FEES The total fee is Rs. [Amount], plus GST, payable on acceptance of each milestone as per Schedule 2. The Client may deduct TDS as required by law. 6. INTELLECTUAL PROPERTY 6.1 On payment for each milestone, the Developer assigns to the Client all rights, worldwide and for the full term of protection, in the source code, object code, designs and documentation created for that milestone. 6.2 The Developer shall deliver the full source code, build scripts and credentials with the final milestone. 6.3 The Developer shall list in Schedule 3 all open-source and third-party components used, with their licences, and shall not use components whose licences would require the Client to disclose its proprietary code without the Client's written consent. 7. WARRANTY For [90] days after final acceptance, the Developer shall fix, free of charge, any defect that causes the Software not to conform to the specifications. 8. CONFIDENTIALITY The Developer shall keep the Client's information, data and the Software confidential. 9. LIMITATION OF LIABILITY Except for breach of confidentiality, IP infringement and fraud, the Developer's total liability is limited to the total fee. 10. TERMINATION The Client may terminate for convenience on [15] days' notice, paying for accepted milestones and work in progress on a pro-rata basis, against delivery of all work completed. Either party may terminate for an uncured material breach. 11. MAINTENANCE Post-warranty maintenance may be agreed separately at the rates in Schedule 4. 12. GOVERNING LAW Indian law applies. Disputes go to arbitration by a sole arbitrator under the Arbitration and Conciliation Act, 1996, seated at [City]. Schedule 1 – Specifications | Schedule 2 – Milestones and fees | Schedule 3 – Open-source components | Schedule 4 – Maintenance rates Client: ____________ Developer: ____________
Replace every [placeholder] and delete options that do not apply.
How to execute it
From blank template to a signed, stamped and stored contract.
Write clear specifications and milestones with acceptance criteria.
Tie each payment to an accepted milestone.
Make sure the IP assignment covers source code and documentation.
Sign electronically and stamp under state law.
Collect source code and credentials at handover and store them securely.
Frequently asked questions
Who owns the source code of an app built by an agency?
The agency, unless there is a written assignment. Make sure the agreement assigns source code to you on payment.
Should I pay a developer upfront?
Milestone payments linked to accepted deliverables protect both sides better than large advances.
What is acceptance testing?
A defined period in which the client tests a deliverable against agreed criteria before it is treated as complete and paid for.
Related templates
Stop emailing Word files around
Turn this format into an approved template, collect approvals, buy e-stamp paper, send it for Aadhaar eSign and get reminded before it renews.