Drafting a mobile application development agreement

Mobile application development is a complex, multi-stage process that requires not only technical expertise but also clear legal formalization of the relationship between the client and the contractor in the form of a contract. A well-drafted contract is the foundation of a successful project, safeguarding both parties from misunderstandings, financial losses, and protracted litigation. Our company, with years of experience in IT law and direct participation in litigation related to software development, is ready to offer a professional approach to drafting this document. We not only understand the legal nuances but also have a deep understanding of the technical side of the issue, which allows us to create contracts that work effectively in practice.

In this article, our lawyers will explain what to pay attention to when drafting a mobile application development agreement, how to provide for guarantees to protect the interests of both parties, and ensure mutually beneficial cooperation between the client and the developer.

Why it is important to correctly define the subject matter of the contract

An essential condition of any contract for the development of a mobile application is its subject matter. For instance, it is not enough to state “development of a mobile application for an online store.” Such a formulation is vague and will inevitably lead to disputes about what exactly should have been implemented.

To minimize such risks, our lawyers use a detailed questionnaire that our client fills out at the initial stage of cooperation. This tool allows us to form a comprehensive and unambiguously interpreted technical specification, which becomes an integral part of the contract (as its annex).

The questionnaire includes such key sections as, for example, the application’s goals and objectives. It is necessary to specify which business processes it should automate, what user problem it should solve. It is also important to indicate the target audience and platforms, i.e., for which devices (iOS, Android) and user groups the product is being created.

A key condition of the technical specification is the functional requirements for the mobile application, i.e., a detailed description of all screens, buttons, processes (registration, authorization, payment, push notifications, etc.). Requirements for the visual component and design of the final product are equally important.

Furthermore, the technical specification typically indicates technical requirements for the developers themselves: technologies used, integrations with third-party services (payment systems, analytics), requirements for the backend.

We also pay special attention to the fact that many projects require simultaneous entry into the international market. We have the competence to prepare all documents and their localization in two languages at once (usually Russian and English), which eliminates discrepancies and ensures legal security for you and your foreign partners and investors.

How to choose the correct legal structure for the contract

Based on our lawyers’ experience, depending on the needs and status of the parties, the development of a mobile application can be governed by various types of contracts.

The most common form is a contract for work, where the emphasis is on transferring the finished result to the client, i.e., a functioning mobile application and all accompanying materials.

A contract for paid services is used when the development process is long-term and includes not only creation but also subsequent maintenance and technical support.

A so-called mixed contract is also often used in practice, as it combines elements of a contract for work (creation of a specific object) and service provision (e.g., consulting services, analytics, marketing).

An author’s commission contract is concluded with an individual developer. It has significant features regarding the regulation of intellectual property rights, which will be discussed below.

Our task is to analyze your business model and propose the optimal legal structure that will most fully protect your interests.

How to develop contract terms based on an analysis of typical litigation disputes

Our experience in litigating cases in the IT field allows us to preemptively include in the contract terms that help avoid the most common conflicts.

In practice, poor quality of the work results is often encountered. A situation where the accepted and paid application works with critical errors is indeed one of the most frequent reasons for going to court. As practice shows, proof of poor quality performance is an independent technical report that identifies the scope and nature of the defects.

In our contracts, we describe in detail the procedure for the acceptance and transfer of results, including the phased delivery of the project. It is also important to provide for the testing procedure: timelines, methods, criteria for successful completion.

We also propose to fix in the contract an exhaustive list of the client’s rights in case defects are discovered, as provided for by Article 723 of the Russian Civil Code: the right to free elimination of defects, a proportionate reduction in price, compensation for their own expenses for elimination, or a complete refusal of the contract with compensation for losses.

Furthermore, our clients often turn to us in connection with violation of work deadlines. For business, the time of product launch to the market is often critical. Violation of agreed deadlines by the developer leads to direct losses. In such cases, clients often successfully recover the paid advance payment and the contractual penalty for delay from the developer.

That is why the contract must include a detailed project calendar plan broken down into stages, as well as a clear mechanism for agreeing on changes to the deadlines, which will exclude their arbitrary postponement by the developer.

We also propose to stipulate a condition on the developer’s liability in the form of a penalty (fine) for each day of delay in the performance of its obligation. In case of exceeding the maximum permissible delay, the client should have the right to unilaterally withdraw from the contract, which our lawyers also recommend providing for in the agreement.

The moment of transfer of intellectual property rights to the mobile application is also important. This is one of the most complex and sensitive aspects. By default, the exclusive right to the created mobile application belongs to the developer. Without a direct indication in the contract, the client will not be able to legally dispose of the product: modify it, sell it, or transfer it to third parties.

We give this section paramount attention. The contract explicitly states that the exclusive right to all results of intellectual activity (source code, design, copyright objects) created under the contract is transferred to the client from the moment of their acceptance and full payment.

If the developer is an individual and an author’s commission contract is concluded, we always include a condition on the subsequent alienation of the exclusive right to the client.

As the Court for Intellectual Property Rights has indicated, even in the absence of such a condition in the contract, the business purpose of the client cannot be reduced merely to the fact of the creation of the work without granting rights to it.

We guarantee that the developer uses only licensed or freely distributed libraries and code that do not violate the rights of third parties.

How to stipulate the condition on the liability of the parties and warranty obligations

As practice shows, the condition on liability is not just a formality, but a mechanism to incentivize the parties to perform their obligations in good faith. When drafting it, it is important to maintain a balance of interests.

Contracts usually provide for two types of penalties: a penalty for delay in the performance of the contractor’s (mobile application developer’s) obligation, and a penalty for delay in payment by the client.

It is extremely important to include in the contract a provision stating that the payment of a penalty does not release the contractor from the obligation to perform the work. A direct indication of this prevents a situation where the developer would prefer to simply pay a fine without completing the project.

It is also necessary to clearly define the procedure for making a demand for payment of the penalty, its form (written, e.g., by email) and the time limits for fulfilling this obligation (e.g., 5 banking days).

Warranty obligations are important for both parties. Remember that a vague formulation like “warranty for the elimination of all errors” is a source of endless conflicts and litigation. Therefore, this section requires maximum detail.

The first step is to clearly define the warranty period. Indicating that the term is calculated from the moment of signing the acceptance certificate is legally correct. Next, it is necessary to exhaustively describe what is included in the concept of a “warranty case.”

Usually, this includes correcting spelling errors, technical problems with media files and links, as well as errors in the operation of modules. However, it is critically important to formulate the exclusions.

Stating that the warranty does not cover “errors in the logic of operation… in cases where their logic corresponds to the technical specification” protects the developer from claims related to an initially incorrectly set task.

The client, in turn, should seek to include in the warranty the obligations to adapt the application to new versions of operating systems during the warranty period.

The procedural part is no less important. The contract must establish a clear regulation of interaction when defects are identified: the form of the request (with mandatory indication of the circumstances of the malfunction), the time limits for its consideration by the contractor (e.g., 1 business day), and the time limits for eliminating various types of errors.

As our lawyers point out, strict regulation of these processes eliminates the very possibility of delaying problem resolution and allows the client to effectively control the course of warranty service.

The condition on force majeure

The condition on force majeure (circumstances of irresistible force) is often drafted using a template, which reduces its practical value. In practice, we often see vague formulations that do not protect the contractor in any way.

For example, the frequent mention of “quarantine restrictions” or “changes in customs regulations” in the context of mobile application development may not always be relevant. Why mention it then?

To increase the effectiveness of this condition, it is recommended to specify a list of circumstances most relevant to the IT sphere. These could be, for example, large-scale internet outages at the level of providers, hosting providers, or app stores (AppStore, Google Play), if they are objective and irresistible in nature, cyberattacks on key infrastructure, sudden changes in legislation directly affecting the functioning of the application and requiring its immediate modification.

A crucial element is the notification procedure. The party invoking force majeure is obliged to immediately notify the other party in writing, subsequently providing documentary confirmation from a competent authority (Chamber of Commerce and Industry, a state body – for example, the Ministry of Digital Development).

It should be expressly stated in the contract that failure to provide such notification deprives the party of the right to invoke force majeure as a basis for exemption from liability.

What we can offer

By entrusting the drafting of your mobile application development agreement to our specialists, you receive not just a legal text, but a comprehensive solution based on a deep analysis of judicial practice and an understanding of technological processes.

We create contracts that not only record current agreements but also serve as an effective tool for preventing and resolving potential disputes, ensuring legal protection and stability for your business at all stages of creating a digital product!