What needs to be in your software developer employment contract template

Software is central to modern businesses and software developers play a key role in the development of their solutions. Software developers come with different levels of experience and areas of expertise so this article provides guidance on how to hire the right software developer and what your software developer's employment contract needs to include.

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How to find a software developer

Software developers can either be specialised in back-end, front-end or full-stack development of applications. The back-end of a software application is where the intelligence runs and manages the communication and instructions between the front-end and the database. The front-end of an application is how users interact with the solution. Developers can also have specialisations based on where the software runs or is interacted with which can be mobile (e.g. iOs or Android), web browser based or desktop based. Before hiring a software developer it is important to understand how your solution needs to be built in order to meet the requirements of your users.

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Answering this question will help you understand thee skills and coding languages your hires need to have. Based on the nature of the skills, the complexity of the application and your budget, you then need to determine if it makes sense to hire back-end and front-end developers and/or full-stack developers. You can also consider hiring independent contractors if the software development expertise you need is quite specialised and fixed-term. 

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How to create an employment contract for a software developer

There are a number of key terms which need to feature in an employment agreement for software developers. Whilst it might be tempting to download a free contract template online, it can be risky as there are a number of important provisions which are unique to software development and writing code.

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Due to the importance of the code which is developed by software developers, it is important that the employer has sufficient protection with regards to intellectual property rights (IPRs). Intellectual Property Rights means patents, rights to Inventions, copyright and related rights, trade marks, trade names and domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, rights in Confidential Information (including know-how, subject matter and trade secrets) and any other Intellectual Property Rights, in each case whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.

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Intellectual property rights can extend to work performed outside of work if the employment agreement prevents the employee from having outside interests. Employers can waive their rights via a waiver for specific projects which have nothing to do with their main business if they feel it is not a threat to their intellectual property rights.

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An employment contract for a full-time software developer should also have warranties for example about their right to work in the United Kingdom if you are hiring an employee in the UK. If you are hiring employees outside of the UK, you must either set up an entity in that jurisdiction to hire them and inform yourself of the applicable laws of the state they are based in by creating an international employment contract, or alternatively hire them as long term consultants.

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Most software is developed using open-source coding languages and frameworks which means that they are free to use and develop. However, not all open-source libraries have the same policies and some require the source code and algorithms of the projects built on them to be publicly available. This could result in the disclosure of the employer's proprietary information which is why software development contracts need to have wording around the use of third party software. Third party software is any software that is developed by companies other than the employer, including open source software. The software developer must in particular not use any third party software and refrain from incorporating third party software in the products or services of the employer without such approval so that it does not result in the employer having to release, either publicly or to any other company, any employer intellectual property rights.

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Employment contracts should also include post termination restrictive covenants so that the former employee does not work for a direct competitor immediately afterwards. These can also include non-solicitation clauses to prevent the former employee from hiring colleagues or approaching the former employer's customers within a certain period of time.

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How to create a software development agreement with a consultant

If you are building a remote team or contracting a software developer for a short period of time, a software development contract template must be based on a consultancy agreement instead of an employment agreement. In this case, the company is treated as a client instead of as an employer and the software developer is treated as an independent contractor instead of as an employee. The governing law of the agreement is usually the jurisdiction of the client. The term of this agreement can be fixed with an end-date or alternatively be a rolling contract with no end-date. If the project is short term, the consultancy agreement must specify the deliverable the software developer is expected to deliver as well as a delivery date. This can also specify milestones and time frames for completing them. Clarifying these terms ensures that the development of the software is completed in stages and on time.

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The software developer's duties include performing the work in exchange for the consultancy fee and assigning the intellectual property rights of the deliverables to the company contracting their services. The consultant must also protect the client's confidential information and the provisions of this agreement should provide sufficient protection to the client. It is also important that the client enters into a confidentiality agreement with the software developer before sharing any details about the project in order to protect their intellectual property.

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How to create a contract for a software developer without paying for legal advice?

Whilst there are plenty of contract templates online, none of them have the appropriate provisions for software developers due to the specialised nature of their work. Moreover, editing a template to meet your requirements is risky and is not an ideal user experience for yourself and the software developer. To create a complete, up-to-date and lawyer-approved contract for your software developer, try Legislate. Legislate is a contract management platform for businesses which offers a suite of essential lawyer-approved contracts which can be tailored to your needs by answering simple questions. Legislate offers an end-to-end paperless contracting experience which software developers will love. 

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About Legislate

When hiring, it's important to have legally sound employment contracts in place to protect your company and employees. With Legislate, you can easily tailor lawyer approved agreements to suit your needs, and easily extract relevant data from these agreements. Plus, our platform allows for electronic signing, making the contract process more efficient for both you and your employees. Book a demo or sign up today.

The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.