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How to write your Open Source Application Development Agreement
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Use cases for this template
Investor scrutiny drives HarborNest's open-source app project with Cobalt Pixel LLC
The Challenge
HarborNest, Inc., preparing for a seed round, needed a clean, industry-standard software development agreement for a custom web application built on GPL components while preserving its brand assets, clarifying scope and deliverables, and avoiding third-party materials and intellectual property infringement claims that could derail diligence.
The Solution
They used Proposal Kit's contract template to assemble the agreement with clear Exhibits for payment terms and technical specifications, then used Proposal Kit's AI Writer to produce supporting documents-a product roadmap, risk assessment, and an acceptance testing plan-plus automated line-item quoting to cost optional modules and maintenance at an hourly rate.
The Implementation
Cobalt Pixel committed to reasonable efforts and a workmanlike manner, documented open source attributions, and mapped change-order rules; Proposal Kit's document creation tools produced a scope matrix, a confidentiality summary for investors, and a post-launch support plan without altering the legal contract language.
The Outcome
The contract was executed quickly, the team passed acceptance testing without non-conformity, investors saw clear IP rights and compliance controls, and HarborNest secured funding with a transparent plan for future features and costs.
Redwood Forge modernizes its legacy database with Nimbus Apps Studio
The Challenge
Redwood Forge's ERP data lived in a brittle legacy database, and prior efforts failed due to vague scope, shifting requirements, and disputes over services rendered, creating budget overrun risk and confusion on who owned pre-existing tools versus new work product.
The Solution
With Proposal Kit, Redwood assembled a standard software development agreement and then used AI Writer to draft a migration study, integration test scripts, and operations runbook; automated line-item quoting compared fixed-fee and hourly rate options, helping leadership select terms favorable to phased delivery.
The Implementation
The parties established change-control procedures, service levels, and acceptance checkpoints documented in Proposal Kit-generated checklists and status report templates, while Nimbus Apps documented third-party materials and open source use so IP rights and confidentiality stayed clear.
The Outcome
The modernization launched on schedule, change orders were predictable, payment terms aligned to milestones, and the entire contract and supporting documents reduced friction, strengthened the partnership, and improved performance across manufacturing sites.
BrightWays Foundation launches a compliant health education portal with OpenVista Labs
The Challenge
BrightWays needed a web portal mixing public domain content and custom code for global outreach, but donor requirements demanded clear protections around confidential information, defined technical support, and explicit procedures if users were experiencing technical difficulties.
The Solution
They used Proposal Kit to assemble the development contract and then leveraged AI Writer to create a grant proposal, data handling plan, and training guides, while automated line-item quoting priced multilingual features and support tiers for budgeting transparency.
The Implementation
OpenVista and BrightWays documented roles, incident response, and acceptance testing criteria using Proposal Kit's document creation tools; a governance calendar, change-request forms, and a knowledge-transfer checklist were produced to align teams before launch.
The Outcome
The portal went live smoothly, donors praised the clear plan and accountability, support tickets were resolved quickly under defined SLAs, and the organization expanded outreach with confidence in cost controls and IP compliance.
Abstract
This software development agreement outlines how a provider will deliver software development services for a custom software project that includes a web application, database, and related programming. The parties involved define payment terms in Exhibit A and technical specifications in Exhibit B. The developer agrees to use reasonable efforts to meet the schedule; delivery dates are estimates, not guarantees.
The company may host the work-in-progress to support testing during the development process. The scope, deliverables, and any requested changes should be defined so the final product meets the client's business expectations and functionality.
Key provisions address intellectual property. The client's materials remain the client's property, while the developer retains IP rights to pre-existing works, interfaces, and concepts, and may create derivative works. The contract recognizes open source frameworks and provides a worldwide, non-exclusive GPL license for the open source code.
The client warrants that it owns or has rights to the materials it supplies and indemnifies the provider against third-party rights and intellectual property infringement claims. The confidentiality clause protects confidential information and restricts disclosure. The provider may reference the project for marketing without sharing non-public data.
Representations and warranties are limited. The provider warrants that the developed software will conform to the defined Specifications and will correct any non-conformity, but disclaims warranties of merchantability, fitness, performance, and uptime. The company is not responsible for third-party materials, tools, or technical difficulties beyond its control, nor for theft or hacking.
Force majeure and change-of-ownership notices are covered. Termination allows the client to end the parties' agreement if the provider fails to comply after such notice. In disputes, the prevailing party may recover costs.
In practice, teams often add procedures for acceptance testing, integration steps, and documentation to support operations, compliance, and successful completion. A master software development agreement or standard document can consolidate party rights, restrictions, and an applicable statement of compensation, hourly rate, and schedule. Many organizations engage a vendor under this framework to build a web application, implement features, fix defects after acceptance, or evaluate and replace legacy systems. Example use cases include a startup hiring a developer to create a database-backed portal, an enterprise integrating open source components, or a nonprofit planning distribution of content under the GPL.
Proposal Kit can help you assemble this type of agreement and related documents quickly. Its document assembly, automated line-item quoting, AI Writer for supporting materials, and extensive template library streamline creation of contracts, plans, and how-to guides so your organization can establish a clear framework with ease.
Beyond the core terms, business teams should align the software development process with measurable value. The original contract can include specific terms stating the software developer will perform services rendered in a workmanlike manner and use best efforts in accordance with the Specifications. Define what constitutes work product, how to determine acceptance, and when the client agrees, the developer is the exclusive owner of pre-existing tools.
Clarify that any collaboration and partnership language does not represent a partnership; the relationship is a services agreement. State that the other party must have authority to sign and that all documents, when executed and signed, form the entire contract, often concluded with the wording " whereof ".
Risk controls often warrant more details. Add procedures for modification and requested change handling, including any additional expense, pay terms, and period for implementing fixes. Provide a path to contact technical support if the client is experiencing technical difficulties, and describe what assistance is included versus billed.
If using open source or public domain materials, specify that inclusion must not violate third-party rights. Consider other specific terms on disabling devices, assignment, subcontractors, and the protection of confidential information so both parties maintain and protect security, operation, and function without causing harm or inconvenience. Define what a material breach is and what steps the parties agree will follow upon such notice. Where appropriate, state that the firm may solely distribute or transfer certain components, and that employees who perform the work remain under the provider's account and control.
Legal teams can draw on practical law resources to stay current with legal updates, topics, tasks, practice note guidance, and practice notes on practical law intellectual property and practical law contract boilerplate. Many organizations hire vendors under this framework to save research time, plan investments, and establish terms favorable to both sides across the industry, including regulated sectors such as health. These provisions help establish intent, secure IP protection, and manage money, value, and risk when software may be deployed around the world.
Proposal Kit can support this effort by helping you assemble the applicable statement of work and original contract, generate quotes, and build related how-to guides and documentation. Its document assembly, automated line-item quoting, AI Writer, and template library streamline creation of agreements and supporting materials, improving consistency and clarity across collaboration and implementation.
To strengthen operational clarity, specify what full access the client will have during development and after delivery, such as access to staging, code repositories, and logs, subject to security controls. Define a clear request workflow for enhancements and defect fixes, including priorities, SLAs, and what is performed under the statement of work versus change orders. Spell out measurable benefit targets (for example, response time or user throughput) so both sides can determine success with respect to the Specifications. Clarify data handling at rest and in transit, and outline backup and recovery steps for the client's convenience during maintenance windows.
Governance language can help align expectations. Establishing a cadence for status reports, risk reviews, and acceptance checkpoints keeps the project on track and protects the investment. Include who can approve decisions, handoffs between teams, and escalation paths. Collectively, these operational provisions reduce ambiguity, improve accountability, and support a smooth transition into production support.
Legal and compliance teams can reference how Practical Law resources and practice notes organize topics and tasks, and use Practical Law's intellectual property guidance to frame ownership, licenses, and attribution. This helps ensure contractor and client conduct themselves in accordance with policy and law, and that any training or knowledge transfer is performed efficiently. When writing, list any tools or environments that remain the provider's property and any artifacts the client may copy or reuse, with respect to restrictions that protect security and confidentiality. These specific terms help clarify who bears costs for audits, what documentation must be delivered, and how success criteria will be verified before final acceptance.
Writing the Open Source Application Development Agreement document - The Narrative
APPLICATION DEVELOPMENT AGREEMENT (OPEN SOURCE)
THIS AGREEMENT is made this Current Day day of Current Month, Current Year by and between Company Name (hereafter referred to as "Customer") and Company Name (hereafter referred to as "Company"). The purpose of this Application Development Agreement is to set forth a contract arrangement under which Company will provide Application Development Services, Web Site Development, Database Development and other assorted Programming Services to Customer. Company has experience and expertise in the development of software applications. Customer desires to have Company develop a software application for it.
Company desires to develop Customer's software application on the terms and conditions set forth herein (the "Software Project").
In consideration of the mutual covenants set forth in this Agreement, Customer and Company hereby agree as follows:
Development of Software Project
Customer agrees to compensate Company according to the terms listed on Exhibit A attached hereto.
Specifications
Company agrees to develop the Software Project pursuant to the specifications set forth in Exhibit B attached hereto (the "Specifications").
Delivery of Software Project
Company will use reasonable diligence in the development of the Software Project and endeavor to deliver to Customer operational Software Project files as soon as possible. Customer acknowledges, however, that this delivery deadline, and the other payment milestones listed in Exhibit A, are estimates, and are not required delivery dates. Company will make every effort to advise Customer of any delays in advance and seek Customer feedback in regard to the proposed timeline as the Development process progresses.
Ownership Rights
Customer shall hold all rights, title, and interest in the Software Project and the Software Project design and content as a whole, excepting all pre-existing works rightfully owned by Company or third party copyright holders. Customer shall hold all rights, title, and interest to all text, graphics, animation, audio components, and digital components of the Software Project. Company shall hold all rights, title, and interest in all pre-existing works, interfaces, navigational devices, menus, menu structures or arrangements, icons, help and other operational instructions, and all other components of any source or object computer code that comprises the Software Project, all pre-existing literal and non-literal expressions of ideas ("Company's Style") that operate, cause, create, direct, manipulate, access, or otherwise affect the Software Project, and all other pre-existing or proprietary copyrights, patents, trade secrets, and other intellectual or industrial property rights in the Software Project or any component or characteristic thereof.
Customer shall not do anything that may infringe upon or in any way undermine Company's rights, title, and interest in the Software Project, as described in this paragraph 4. Notwithstanding the above, Customer shall retain all of its intellectual property rights in any text, images, or other components it owns and delivers to Company for use in the Software Project in addition to the physical presence of the site itself. Customer shall be provided with a copy of all source code, source files, and graphic files as a part of this Agreement and there shall not be any additional royalty, license, or other payment required of Customer to Company for the intended use of the Software Project.
Web Hosting Services Provided
Company may, at its discretion, host portions of the Software Project at its own cost to facilitate development and testing of the Software Project.
Software Project Development Services Provided
Company will provide development services according to the Specifications attached as Exhibit B.
Proprietary Information
Proprietary information exchanged hereunder shall be treated as such by both Company and Customer. This information shall include, but not be limited to, the provisions of this agreement, and both parties' product(s), services, information, and pricing. Customer further agrees to not decompose, disassemble, decode, or reverse engineer any Company-owned program, code, or technology delivered to Customer, or any portion thereof.
Interference
Company will exercise no control whatsoever over the content of the information passing through any part of the Software Project. Warranty That Software Project Shall Work According to the Specifications. Company warrants that the Software Project will conform to the Specifications and upon written notification of a defect or other non-conformation to the specification, Company will work to bring the Software Project into conformance with the specification at its own cost and in as timely a manner as possible. Company is not responsible for defects caused by changes or issues resulting from third party tools or applications it does not have direct control over, including, but not limited to: web browsers, operating systems (OS), plug-ins, extensions, software programs, applets, newly discovered vulnerabilities, scripts, or other items.
1 No Warranty for Outcome or Use of the Software Project
Company makes no warranties or representations of any kind, whether expressed or implied, for the suitability or the outcome from the use of the service it is providing. Company also disclaims any warranty of merchantability or fitness for any particular purpose and will not be responsible for any damages that may be suffered by Customer, including loss of data resulting from delays, non-deliveries or service interruptions by any cause or errors or omissions. Use of any information or results obtained is at Customer's own risk, and Company specifically denies any responsibility for the accuracy or quality of information obtained through its services.
Any connection speed or application execution speed for end users is not guaranteed. Company specifically denies any responsibilities for any damages arising as a consequence of any unavailability.
2 No Warranty for Use of Open Source Software and Solutions
Company makes no warranties or representations of any kind, whether expressed or implied for the suitability of any of the Open Source applications, solutions, components, source code (whether in part or in whole) installed or otherwise utilized in the delivery of the Software Project. Company is not responsible for the maintenance or use of such now or in the future, including all upgrades, patches, and incompatibilities with software and third party applications or any other problem or disruption arising out of the use of Open Source.
Intellectual Property
Customer warrants that it has the right to use any applicable trademarks or copyrighted material used in connection with this service. Company warrants that it has the right to use any applicable trademarks, service marks, or other copyrighted material(s) used by Company in the development and implementation of the Software Project, which have not been provided by Company.
1 Open Source Disclaimer
Customer acknowledges that the solutions being provided by Company are "Open Source" and Customer is being granted a Worldwide, non-exclusive license, under the General Public License (GPL) to deploy, modify, or otherwise use the Open Source Code in their business or enterprise.
Change of Ownership
In the event that Customer or Company contemplates whole or partial sale of its business, ownership change, or change in jurisdiction during the course of this Agreement, parties shall notify one another by mail, facsimile, or email no less than 30 days prior to the effective date of the event.
Termination
Customer may terminate this Agreement at its sole discretion, upon one or more of the following events: 1) failure on the part of Company to comply with any provisions of the Agreement upon receipt of written notice from Customer of said failure, 2) appointment of Receiver or upon the filing of any application by Company seeking relief from creditors, or 3) upon mutual agreement in writing of Customer and Company.
Disputes
If legal proceedings are commenced to resolve a dispute arising out of or relating to this agreement, the prevailing party shall be entitled to recover all costs, legal fees, and expert witness fees, as well as any costs or legal fees in connection with any appeals.
Indemnification
Customer shall indemnify and hold Company harmless from and against any and all claims, judgments, awards, costs, expenses, damages, and liabilities (including reasonable attorney fees) of whatsoever kind and nature that may be asserted, granted, or imposed against Company directly or indirectly arising from or in connection with Customer's marketing or support services of the product or services or the unauthorized representation of the product and services or any breach of this agreement by Customer. Customer warrants that everything it gives Company to incorporate into the Software Project is legally owned or licensed to Customer. Customer agrees to indemnify and hold Company harmless from any and all claims brought by any third party relating to any aspect of the Software Project, including, but without limitation, any and all demands, liabilities, losses, costs, and claims, including attorney's fees, arising out of injury caused by Customer's products/services, material supplied by Customer, copyright infringement, and defective products sold via the Software Project.
Use of Software Project for Promotional Purposes
Customer grants Company the right to reference the Software Project for promotional purposes and/or to cross-link to it with other marketing efforts developed by Company. Company may not, at any time, disclose or grant access to Customer's Software Project private information, resources, or any other non-public asset used for the purposes of promotion or marketing.
No Responsibility for Theft
Company has no responsibility for any third party taking, stealing, "hacking," altering, or otherwise modifying all or any part of the Software Project, Source Code, Object Code, Graphics, Text, data, or any other materials related to the Software Project.
Right to Make Derivative Works
Company has exclusive rights in making any derivative works of pre-existing or open source code or related graphics and animations. Customer acknowledges that similarities may exist between other Software Projects developed by Company for Customer and any such similarities, both past and future, constitute Company's artistic style and proprietary information.
Identification of Company
Customer agrees that Company's links will be placed on the bottom of the front page and on internal pages of the Software Project in a mutually agreeable small type font. Customer also agrees to put Company's copyright notices in any source code where pre-existing or proprietary information is present. Source code copyrights shall not be public unless a user views the source code directly.
Customer agrees to display all legally required copyright notices as prescribed by applicable law.
General
If any provision of this Agreement is held to be unenforceable, the enforceability of the remaining provisions shall in no way be affected or impaired thereby. A failure by any party to exercise or delay in exercising a right or power conferred upon it in this Agreement shall not operate as a waiver of any such right or power.
Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of State. Exclusive jurisdiction and venue shall be in the County County, State Superior Court.
Force Majeure
Company will not be responsible for fulfilling its obligations under this Agreement if such failure is caused by circumstances beyond the reasonable control of Company or its suppliers or contractors (including but not limited to acts of God, disasters, acts of terrorism, unavailability of materials, equipment failures, strikes, riots, wars, or other labor disturbances).
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How to Build a Legal Contract with Proposal Kit
This video illustrates how to create a legal contract using the Proposal Pack Wizard software. It also shows how to create a proposal with an invoice and contract at the same time.
Frequently Asked Questions
How do I customize this contract to fit my business needs?
Customizing this contract involves editing the document to include your business details, terms, and conditions. The templates are designed to be flexible, allowing you to insert your company's name, address, and other relevant information. You can modify clauses to reflect your unique business practices and legal requirements.
Is this contract compliant with laws and regulations?
The legal contract templates are written by legal professionals and designed to comply with current laws and regulations at the time of their writing. However, laws can vary by jurisdiction and change over time, so it's recommended to have your contract reviewed by a local attorney to ensure it meets all legal requirements specific to your region and industry. Templates are licensed as self-help information and not as legal advice.
Can I use the same contract for different clients or projects?
You can use the same contract for different clients or projects. The templates are versatile and easily adapted for various scenarios. You will need to update specific details such as client names, project descriptions, and any unique terms for each new agreement to ensure that each contract accurately reflects the particulars of the individual client or project.
What should I do if I encounter a clause or term I don't understand?
If you encounter a clause or term in the contract that you need help understanding, you can refer to guidance notes explaining each section's purpose and use. For more complex or unclear terms, it's advisable to consult with a legal professional who can explain the clause and help you determine if any modifications are necessary to suit your specific needs.
How do I ensure that the contract is legally binding and enforceable?
To ensure that the contract is legally binding and enforceable, follow these steps:
- Complete all relevant sections: Make sure all blanks are filled in with accurate information.
- Include all necessary terms and conditions: Ensure that all essential elements, such as payment terms, deliverables, timelines, and responsibilities, are clearly defined.
- Signatures: Both parties must sign the contract, and it is often recommended that the contract be witnessed or notarized, depending on the legal requirements in your jurisdiction.
- Consult a legal professional: Before finalizing the contract, have it reviewed by an attorney to ensure it complies with applicable laws and protects your interests.
Ian Lauder has been helping businesses write their proposals and contracts for two decades. Ian is the owner and founder of Proposal Kit, one of the original sources of business proposal and contract software products started in 1997.By Ian Lauder
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Proposal Kit, Inc. makes no warranty and accepts no responsibility for the suitability of any materials to the licensee's business. Proposal Kit, Inc. assumes no responsibility or liability for errors or inaccuracies. Licensee accepts all responsibility for the results obtained. The information included is not legal advice. Names in use cases have been fictionalized. Your use of the contract template and any purchased packages constitutes acceptance and understanding of these disclaimers and terms and conditions.
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