Software development agreements

Software development agreements contain obligations on software developers to develop applications by making more than minor modifications to standard software or developing bespoke software that address the specific needs of the user.

Legal nature of software development contracts

Software development contracts are generally considered to be contracts for services, although upon reading § 651 German Civil Code, this is not immediately clear.

This paragraph provides that the laws on the sale of goods apply to the delivery of moveable goods to be manufactured or produced. In principle, Germany’s Federal Court of Justice qualifies software as a movable good. However, due to the statutory regime on performance guarantees and supplementary performance, the law on the sale of goods does not really reflect the nature of software development. Instead, it is the development process, which can often be long and arduous, as opposed to the simple performance of mutual obligations that is at the core of a software development relationship.

In the event that the contractual parties would prefer for the law on the provision of services to apply to a software development contract, it is important to expressly include such a provision in the preamble of the contract. The provision will not be decisive, but will act as an indication as to which rules the parties wish to govern the contract.

Important provisions

The software development agreement must clearly define the software to be developed. Often, a list of obligations is drawn up together with the client and will contain a precise description of the software’s specifications. In addition, the software developer must remember to grant the client a licence over the software. Finally, the contract should contain provisions concerning the time period for use (which should be at least “permanent use”) and remuneration for the developer.

In the event that the parties wish to derogate from the statutory provisions concerning liability for defects, express provisions should be included in the software development agreement.

Do you have questions about IT law, licences or data protection? We are happy to help!
German lawyer, Christian Solmecke, and his expert team are available to answer your questions.
Call us on +49 (0) 221 / 951 563 0 or use our contact form.

Back to IT Law

Best rated articles on IT Law

No articles available

Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

Do you like this article? Feel free to rate it now:

1 Stern2 Sterne3 Sterne4 Sterne5 Sterne (Not rated yet)

Free initial assessment

Use this form to request a free initial assessment. → TIP: If you have received a warning letter or other correspondence, you can attach it directly to your query. This will speed up the assessment.
  • Since we´re calling you for a free initial assessment, we would need to have your phone number.
  • Anything between 09:00 am and 08:00 pm.
  • Please tell us briefly what your query is about. This will make it easier for us to allocate your query to the correct contact person.
  • Drop files here or
    Accepted file types: doc, docx, pdf, txt, rtf, jpg, tiff.
    Please attach your documents through this form field. Allowed file types are .doc, .docx, .pdf, .txt, .rtf, .jpg and .tiff. You can upload a maximum of 5 files. If your document consists of multiple files, please try to merge the files to one file. As an alternative solution you can send your documents via email to
  • This field is for validation purposes and should be left unchanged.