5 Basic Legal Issues of Agile software development

It would be ridiculous to start an article about agile software development with an obvious statement, such as: Agile software development is becoming very popular in a technological world. However, it is not ridiculous to say, that legal practice is not 100-percent up-to-date with these developments.

The article gives a non-exhaustive overview of 5 most important issues that this kind of contract should address. The word “non-exhaustive” must be stressed once again.


  1. The obligations within each sprint

The parties should agree on the procedures, which lead to the initial creation of the sprint obligations, as well as their modifications. How many of the items should be developed in a single sprint? How are they reviewed? Who has the power to decide?


  1. The satisfaction of obligations

What about the compliance with obligations – at which point, the project is completed? Who and for how long bears the responsibility for the project, the final product and the result of a specific sprint? Should the contract include liabilities for late performance or worse quality?


  1. Intellectual Property rights

The nature of Agile development influences the issue of the (non)existence of IP rights too. Who is the owner? At which point does the Developer transfer these rights to the Buyer? What documents must be submitted after certain period or after a completion of the whole project? Moreover, in case that the Developer works with Buyer’s data – how would they be protected?


  1. Pricing

Due to the specific nature of Agile software development, the contract must include an agreement on the pricing model. The contract should specify, at which moment the party may send an invoice. At the same time, it should address the issue of pricing, when anything went wrong or in a different way than expected.


  1. Termination

Due to the nature of the Agile software development, the question about the possibility to terminate the contract after certain sprints should be addressed. Moreover, it should deal with the consequences of the termination.


This is just a very brief overview of principles. As it is possible to observe, the range of issues is not that extraordinary. However, the issues are influenced by the specific nature of Agile software development. Therefore, it is necessary to think about them, when drafting and, eventually, signing such contracts.

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