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Agreement to Design and Construct Software

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Agreement to Design and Construct Software

Agreement made on the , between of , referred to herein as Contractor, and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Company.

For and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Contract Service

Contractor will design and construct certain software (describe software and purpose) , more specifically identified in Exhibit A which is attached to and made a part of this Agreement.

2. Time of Completion

The Contract Service will be completed on or before

3. The Contract Price

Company will pay Contractor for the Contract Service a sum not to exceed $, subject to the Schedule set forth in Paragraph 9 below. Payments of the Contract Price shall be made in installments upon completion of the requisite acceptance criteria set forth in Paragraph 9 below.

4. Services not to Conflict

Company understands that the Contractor may be engaged by one or more other institutions for the Contractor's services. In this regard, the Contractor will not become a party to any agreement that conflicts with the Contractor's performance of the Contract Service. Company may terminate this Agreement if in its reasonable opinion the performance of such services will conflict with its interests.

5. Confidentiality

Company wishes to maintain in confidence all information including data, technology, commercial and research strategies, trade secrets, inventions and know-how disclosed by Company to the Contractor, directly or indirectly, in written, oral or other tangible form, for the purpose of this Agreement or generated by the Contractor as a result of the performing the Contract Services (collectively, Confidential Information). In this regard, the Contractor will not disclose Confidential Information to others without the prior written consent of Company, except the Contractor will not be prevented from disclosing information that (i) can be shown by contemporaneous documentation to have been in the Contractor's possession prior to the disclosure by Company; (ii) at the time of the disclosure is, or thereafter becomes, through no fault of the Contractor, part of the public domain; or (iii) is furnished to the Contractor by a third party after the time of the disclosure without the breach of any duty to Company. In addition, the Contractor will keep separate and segregated from other work all documents, records, notebooks, correspondence and the like arising from the Contract Services. All right, title, and interest in Confidential Information, including that arising from the Contract Services, shall belong to Company and upon completion of the Contract Services or termination of this Agreement all tangible forms of Confidential Information, including copies thereof, whether prepared by the Contractor or other, will be delivered to Company. Contractor will not disclose to Company any information of third parties that the Contractor does not have the right to disclose.

6. Termination

This Agreement may be terminated by either party upon thirty (30) days written notice to the other party. This Agreement may be terminated by a non-breaching party, in addition to any other remedy, for a breach of any term of the Agreement effective upon written notice to the breaching party; upon which event all rights of the breaching party shall terminate.

7. Provisions to Survive

The terms and obligations of Paragraph 5 shall survive and remain in full force and effect after termination of this Agreement regardless of the cause of such termination.

8. Independent Contractor Status

Contractor is an independent contractor and is not an employee, servant, partner or joint venturer of Company. Company shall determine the services to be provided by Contractor, but Contractor shall determine the legal means by which it accomplishes the services in accordance with this Contract. Company is not responsible for withholding, and shall not withhold or deduct from the commissions FICA or taxes of any kind, unless such withholding becomes legally required. Contractor is not entitled to receive the benefits which employees of Company and is not entitled to receive and shall not be entitled to workers compensation, unemployment compensation, medical insurance, life insurance, paid vacations, paid holidays, pension, profit sharing, or Social Security on account of his services to Company. It is further understood that Contractor is free to contract for similar services to be performed for other (type of entity) or organizations while under Contract with Company.

9. Payment for Services and Expenses

For consultation related to the design, production and installation of and the actual software product , Company will pay for the product in installments upon completion of the requisite acceptance criteria.

A. Phase I

1. Goals: Completion of a core software module that runs on a Windows server.

2. Acceptance Criteria: The prototype runs on Windows Sever with MS-IIS WWW server software. Accepts ASCII data by file transfer over network from any platform (Mac, Unix, Windows 3.x, 95, 98, NT). Writes summary output files onto the server in ASCII format, accessible from any platform (Mac-OS, Unix, Windows 3.x, 95, 98, NT).

3. Payment: $

B. Phase II

1. Goals: Completion of a graphical user interface (GUI).

2. Acceptance Criteria: Users can submit data for data analysis from remote workstations, using a portable graphical user interface (GUI) implemented as a web page with HTML forms.

3. Payment: $

C. Phase III

1. Goals: Integration and testing of Phase I and Phase II modules, including the transfer of final products to Company.

2. Acceptance Criteria: Output files are produced in a specified format (e.g., Excel spreadsheet and HTML-web pages with integrated graphics). Multiple users can simultaneously submit data for analysis. Output files are compatible with back-end databases (e.g., Oracle). Documentation has been created and full source code has been transferred to Company.

3. Payment: $

10. Severability

The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

11. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

12. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

13. Notices

Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

14. Attorney’s Fees

In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees.

15. Mandatory Arbitration

Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

16. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

17. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

18. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

19. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

20. Compliance with Laws

In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties.

21. In this Agreement, any reference to a party includes that party's heirs, executors, administrators, successors and assigns, singular includes plural and masculine includes feminine.

WITNESS our signatures as of the day and date first above stated.

By:

Enter text✕

What the Agreement to Design and Construct Software Covers

The Agreement to Design and Construct Software is a bilateral contract that sets out the developer's obligations to design, build, test, and deliver software and the client's duties to provide specifications, approvals, and payment. It documents scope, detailed deliverables, schedule and milestone dates, change-order procedures, acceptance criteria, intellectual property ownership, warranty and support terms, payment mechanics, confidentiality and data protection obligations, and dispute-resolution paths so both parties understand responsibilities and risk allocation.

Why a Clear Software Design-and-Construct Agreement Matters

A precise Agreement to Design and Construct Software reduces dispute risk by defining scope, acceptance tests, IP ownership, and payment milestones. It supports enforceability under state contract law and federal e-signature statutes, streamlines invoicing and change control, and clarifies remedies for defects or delays.

Why a Clear Software Design-and-Construct Agreement Matters

Who Commonly Prepares or Signs This Agreement

Typical users include in-house counsel, procurement teams, product managers, and third-party development vendors who manage technical and contractual delivery.

  • Software vendors and development agencies responsible for engineering, delivery, and maintenance obligations.
  • Product owners and CTOs needing measurable acceptance criteria, timelines, and clear IP terms.
  • In-house legal and procurement teams reviewing payment, liability, warranty, and vendor performance language.

Parties generally adapt the template to project size and risk, and involve legal review for IP assignment, indemnities, limitation of liability, and data protection clauses.

Primary Signers and Their Roles

Vendor CEO

The vendor's authorized executive signs to bind the company to deliverables, warranties, and IP assignments; include title and evidence of signing authority such as a board resolution when required.

Client Officer

A client officer or procurement lead signs to accept scope, commit payment, and trigger milestones; record the signer's name, title, and contact details to verify authority.

Core Sections to Include in the Agreement

A professional Agreement to Design and Construct Software should clearly address scope, deliverables, schedule, payment, IP rights, warranties, and dispute resolution to limit ambiguity and support enforceability.

Scope of Work

Describe specific features, modules, performance requirements, supported platforms, out-of-scope items, and acceptance criteria. Attach technical specifications, APIs, wireframes, and any third-party component lists as enforceable exhibits to reduce interpretation disputes.

Deliverables

List deliverables, delivery formats, versioning, and handover materials. Define what constitutes source code versus documentation, include test reports, and specify any escrow arrangements for critical source materials.

Timeline & Milestones

Set milestone dates, deliverable windows, acceptance review periods, and dependencies. Include remedies or adjustment procedures for late delivery and a formal change-order process to capture scope changes.

Payment Terms

Specify fixed fees or hourly rates, milestone payments, invoicing triggers, expense reimbursement, retainers, net payment days, interest on late payments, and any escrow or holdback provisions.

IP & Ownership

Clarify whether deliverables are work-for-hire or assigned, list retained developer tools or libraries, address third-party license obligations, and include explicit assignment or license clauses for ownership transfer.

Warranty & Support

State warranty duration, defect classification, remedies, response and resolution times, maintenance or support fees, and exclusions such as third-party components or misuse by the client.

Essential Fields and Data to Capture

Project Title: Unique project identifier
Parties: Legal names and entity types
Contact Information: Street address, email, phone
Payment Details: Amounts, currency, schedule
Schedule Dates: Effective, milestone, completion
Acceptance Criteria: Test cases or sign-off checklist

Step-by-Step: Completing and Executing the Agreement

Follow these ordered steps to prepare, review, sign, and distribute the Agreement to Design and Construct Software accurately.

  • 01
    Prepare Documents: Gather specs, exhibits, and proof of authority.
  • 02
    Review Terms: Obtain legal review for IP, liability, and payment.
  • 03
    Signatures: Collect authorized signatures; notarize if required.
  • 04
    Distribute Copies: Send executed copies to all parties and store securely.

Configure the Online Workflow for Execution

Before sending, configure authentication, templates, conditional fields, reminders, and storage to ensure predictable routing and recordkeeping.

Field Configuration
Signer Authentication Email link, SMS code, or knowledge-based KBA
Conditional Sections Show or hide fields by role or answers
Reminder Schedule Automatic reminders at set intervals
Storage Location Cloud folder, contract repository, or local backup

Where to Send, File, and Archive the Executed Agreement

Define recipients and the final storage location so each party and internal team knows where to find the signed contract and related deliverables.

  • Client Copy: Deliver final signed PDF to client and project lead
  • Internal Records: Upload signed agreement to the corporate contract repository
  • Project Management: Attach agreement to the project record in PM system
  • Accounting: Forward signed agreement and invoice to accounts payable

Digital Signing and Platform Capabilities to Consider

Use an eSignature platform that supports secure PDFs, robust audit trails, and role-based signer authentication for reliable contract execution.

  • File Formats: PDF and DOCX supported
  • Integrations: Salesforce, NetSuite, Procore integration
  • Authentication: Email, SMS code, SSO, or KBA

Typical Dates and Deadlines to Track

Record key dates for the effective date, design start, each milestone, final delivery, and warranty cutoff to manage obligations and payments.

Effective Date:

The contract start date; governs timing of obligations

Design Phase Start:

Target date to begin design activities

Milestone Payment Dates:

Dates tied to acceptance of specific deliverables

Final Delivery Date:

Date to complete delivery and handover

Warranty Period:

Warranty start date and duration after acceptance

Penalties and Legal Risks to Watch

Breach Damages: Monetary damages and injunction risk
Liquidated Damages: Per-day penalties for delayed delivery
IP Disputes: Ownership disputes can be costly
Data Breach: Regulatory fines and reputational harm
Termination Costs: Early termination fees may apply
Tax Withholding: Incorrect W-9 triggers backup withholding

Common Preparation Mistakes to Avoid

  • Unclear scope creates frequent change orders and disputes; quantify acceptance criteria and attach technical exhibits to minimize interpretation gaps.
  • Failing to confirm signatory authority risks enforceability; obtain corporate resolutions or power-of-attorney where necessary before execution.
  • Vague IP language may not transfer copyright; explicitly state work-for-hire or include a clear assignment of ownership and list open-source exclusions.
  • Not documenting client dependencies or data delivery dates causes delays; include client obligations and remedies for late client performance.

eSignature Vendor Comparison for Executing Software Agreements

Basic pricing and capability comparisons help evaluate eSignature vendors for contract execution; signNow is listed first per comparison requirements.

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Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial, no credit card Verify Verify Verify Verify
Bulk Send Yes (Business Premium) Verify Verify Verify Verify
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Practical Examples of Agreement Use

These short case summaries show how organizations apply the Agreement to Design and Construct Software across different project types and scales.

SaaS Platform Development

A mid-sized vendor engaged to deliver an MVP with staged payments

  • Milestones were tied to acceptance tests and code escrow
  • The contract reduced payment disputes and preserved client access to critical source code during vendor transition.

Custom Integration Project

A healthcare provider commissioned an EHR integration requiring PHI safeguards

  • Agreement included a HIPAA BAA and encryption requirements
  • Clear security specs and support SLAs reduced vendor onboarding time and compliance risk.

Practical Tips for Accurate and Efficient Completion

Adopt standard templates and checklists, confirm signatory authority, and tie payments to objective acceptance criteria to reduce negotiation cycles and execution errors.

Standardize Templates
Use vetted templates to shorten review time while tailoring IP and liability sections for each engagement.
Confirm Authority
Verify corporate signing authority to prevent later challenges to enforceability.
Attach Exhibits
Include technical specs and test plans as exhibits to avoid scope ambiguity.
Link Payments to Acceptance
Tie milestone invoices to documented acceptance to reduce payment disputes.

Frequently Asked Questions About Executing This Agreement

Answers to common questions about legal validity, notarization, signatory authority, amendments, storage, and compliance when executing an Agreement to Design and Construct Software.


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