Software development contracts are widely used in the IT industry. Such contracts are concluded both between companies and clients in Belarus and with foreign partners. They may involve the creation of unique software products, the improvement of existing solutions, as well as maintenance and technical support.
However, the specifics of software development often become a source of conflicts. The reasons can vary: disagreements over technical specifications, missed deadlines, results not meeting the client’s expectations, questions regarding the scope of transferred intellectual property rights, or payment procedures. As a result, even a carefully prepared contract does not always protect the parties from disputes.
For businesses, such conflicts can cause financial losses, damage trust, and disrupt projects. Resolving disputes requires legal expertise and knowledge of the IT industry.
This article examines the types of disputes that most commonly arise in software development contracts, the mechanisms available in Belarus for their resolution, and how legal support helps minimize risks for companies.
Causes of Disputes in Software Development Contracts
Although software development contracts are becoming increasingly common, they remain one of the most “problematic” categories of agreements. The main difficulty is that the result of a developer’s work is often hard to measure unequivocally, and the expectations of the client and the contractor can differ significantly. Below are the main reasons why disputes arise in software development contracts.
1. Disagreement or lack of a clear technical specification
A technical specification (TS) is the foundation of a successful project. If it is prepared superficially or the parties limit themselves to general formulations, the client and the contractor may interpret the result differently upon acceptance. The absence of a TS or disagreement over it is one of the main causes of conflicts.
2. Missed development deadlines
Software development is often accompanied by changing requirements, technical difficulties and the need for improvements. As a result, deadlines are shifted, which causes client complaints. The contractor, in turn, can refer to “unforeseen circumstances” or additional tasks.
3. Disagreements over the scope of work and payment
Clients and contractors often dispute which tasks are included in the agreed scope of work and which are considered additional. This leads to conflicts over payment: the client refuses to pay for “extra” hours, while the developer demands compensation for additional work.
4. Results not meeting client expectations
Even when a contract is formally fulfilled, the client may remain dissatisfied with the product. This is because a “quality result” in IT is often perceived subjectively: the functionality works, but the interface is inconvenient, or the code meets standards but does not solve the client’s business problem.
5. Questions regarding the transfer of intellectual property rights
The contract should specify who owns the source code, design, and documentation. If this is not addressed in the contract, it can become a serious source of conflict. This issue is significant when working with foreign companies, where different approaches to copyright and related rights apply.
The Most Common Types of Disputes in Software Development
Disputes in software development contracts can take various forms; however, several typical categories are most often seen in legal practice.
- Non-performance or improper performance of obligations
The contractor may fail to start work on time, perform tasks partially, or violate the schedule for project stages. Sometimes problems arise from a lack of qualified specialists in the team or poor organization of the development process.
- Disputes over the quality of the developed product
One of the most common conflicts occurs when the client believes the product does not comply with the contract or technical specification. These may include program errors, inconvenient interfaces, low performance, or incomplete functionality. Contractors often respond that the client’s requirements were not clearly defined.
- Non-payment or delayed payment by the client
A frequent situation is when the client refuses to pay, citing shortcomings or non-compliance of the result. Sometimes payments are delayed for financial reasons, causing losses for the contractor.
- Unilateral termination of the contract
Parties may attempt to terminate the contract unilaterally. For the contractor, this means a loss of remuneration; for the client, the risk of receiving an “unfinished” product. It is important whether the contract specifies conditions for unilateral termination and the settlement procedure in such cases.
- Use of code or solutions without consent
Particularly acute conflicts arise when the client or contractor uses software code, design, or architectural solutions without obtaining the appropriate rights. This can lead to copyright infringement claims and lawsuits.
Methods of Dispute Resolution
Even if a disagreement arises, the parties have several options for how to act. The choice depends on the nature of the conflict, the terms of the agreement, and the willingness to compromise.
- Pre-trial settlement
The first step in the event of a dispute is negotiations. Often, an open dialogue helps to eliminate misunderstandings, adjust working conditions or agree on additional deadlines. In some cases, mediation can be useful. This is the participation of a neutral mediator who helps the parties find a solution that suits both sides. In addition, Belarusian legislation provides for a procedure for consideration of claims, when a party sends a written claim with a description of violations and a proposal to eliminate them.
- Litigation in Belarus
If no agreement is reached, parties can appeal to the economic court. Judicial practice in IT disputes is actively developing, and judges consider the specifics of such contracts. Proper documentation of the technical specification, acceptance certificates, and correspondence between the parties is critical. The court can order the contractor to correct defects, recover damages or penalties, and protect intellectual property rights.
- International arbitration
When a software development contract is concluded with a foreign client or contractor, parties often include a clause on resolving disputes through international arbitration (e.g., at the Belarusian Chamber of Commerce or foreign arbitration institutions). This allows disputes to be resolved in a neutral jurisdiction, which is especially important for cross-border contracts.
- Advantages of alternative dispute resolution methods
Choosing pre-trial or arbitration mechanisms allows saving time and resources, maintaining business relationships, and avoiding publicity. This is particularly relevant for IT companies, as court proceedings can be lengthy and negatively impact reputation.
How to Minimize Risks at the Contract Stage
Most conflicts over software development contracts can be prevented if attention is paid to details during contract drafting. A well-prepared contract becomes a reliable tool for protecting both the client’s and contractor’s interests. Here are key recommendations for drafting a software development contract.
- Thorough preparation of the technical specification
Unclear or incomplete technical specifications that most often lead to disputes. All key requirements for functionality, interface, performance and compatibility should be recorded in writing. Additionally, a protocol for coordinating changes can be provided to avoid disagreements in the future.
- Establishment of clear stages and acceptance criteria
Software development usually proceeds in stages. It is important to define intermediate stages, deliverables, deadlines, and the form of delivery (e.g., test versions, reports). Acceptance criteria should be as objective as possible to reduce the risk of subjective evaluation of the result.
- Clear regulation of payment and responsibility for missed deadlines
The contract should define the procedure and schedule of payment (advance payments, milestones, final settlement). It is useful to include penalties for delays and the consequences of missed deadlines, encouraging the parties to comply with the agreements.
- Specification of intellectual property rights
The contract should clearly state who owns the exclusive rights to the developed code and related materials. Without this, the client may face restrictions when using the product, and the contractor risks using the work without proper authorization.
- Inclusion of arbitration or mediation clauses
Pre-agreed dispute resolution mechanisms save time and prevent uncertainty. For international contracts, it is particularly important to include an arbitration clause defining the jurisdiction and the body that will resolve potential disputes.
The Role of Legal Support
Legal support plays a key role in minimizing risks and protecting the interests of parties in software development contracts. Professional assistance helps not only to prevent conflicts but also to resolve them effectively if they arise. Here are the tasks that experienced lawyers can handle.
1. Analysis and preparation of software development contracts
Lawyers review the completeness and correctness of contract terms, clarify formulations protecting both client and contractor rights. This includes detailed work on the technical specification, setting stages and acceptance criteria, and regulating payment and responsibility for delays.
2. Support during negotiations between client and contractor
Professional legal participation in the negotiations ensures proper coordination of the terms of cooperation, consideration of the nuances of the project and prevention of potential conflicts at the contract stage.
3. Representation in courts and arbitration
If a dispute arises, a qualified lawyer represents the client in the Economic Court of Belarus or international arbitration institutions. This provides a higher level of protection and increases the chances of a favorable resolution.
4. Consultation on intellectual property protection
Protecting rights to software, code, design, and other development outputs is one of the most complex aspects in IT. Lawyers can correctly secure rights, prevent unauthorized use, and prepare documentation to protect against copyright infringement.
Conclusion
Disputes over software development contracts are often particularly complex. The reasons lie in the technical specifics of projects, the need for accurate documentation on the requirements and issues of intellectual property. Any inaccuracy in the contract or misunderstanding between the parties may lead to lengthy litigation and financial losses.
Proper preventive preparation at the contract stage reduces risks: a well-drafted technical specification, clear work stages, acceptance criteria, payment terms, and responsibility conditions all reduce the likelihood of conflicts.
Professional legal support helps not only to prevent disputes but also to effectively protect interests if they arise. Our team is ready to analyze and prepare contracts, support negotiations, represent clients in courts and arbitrations, and provide consultations on intellectual property protection. With us, the software development and collaboration process becomes safe and transparent for business operations.
Contact us
If you have any questions regarding disputes over software development contracts in Belarus, we will be happy to help! Our long-term experience will help you choose a lawyer to represent your interests.
- +37529142-27-19 (WhatsApp, Viber, Telegram);
- info@ambylegal.by.
