What is a product development agreement?
A product development agreement contract helps you get the finished product you may want while also safeguarding you and your work.
How do you write an agreement form?
Using one of Bonsai's free contract templates is the best method to send clients professional agreements. With the aid of our software, you can obtain legally sound agreements and begin a new client relationship.
What is a business development agreement?
A business development agreement is a contract defining the parameters of future transactions between two parties. The BDA outlines each party's rights and obligations in the event of a disagreement or dispute.
When companies decide to outsource their product manufacturing to third party consultants or freelancers, they often run the risk of the product never being completed on time or as per the expectations set. The developers, freelancers and consultants, on the other hand, constantly worry about the compensation and timelines.
One of the good ways to address this is with a product development agreement contract. A product development agreement template is a legal document that protects you and your work along with helping the client obtain the final product they want.
This is a comprehensive document that can be used for any business particularly where data (related to the business or end product) is sensitive. The product development agreement template could relate to anything from tangible items such as a mechanical part or intangible ones such as a web development contract, new legal document, or software development contract template.
For e.g., if a company hires you to develop specific products, you would require to draft a product development agreement to ensure that work is done as per the client's requirement. Further, the product development agreement template also helps you, as the product designer, in addressing and resolving disputes, if any.
The agreement moves seamlessly through different sections covering details about particular projects, confidentiality, payment conditions, and IP ownership details.
A well-drafted product development agreement generally includes provisions addressing the below:
- Details of the product to be developed
- Details about the product specifications
- Ownership details or IP rights to the resulting product
Benefits of product development agreement template
Among the main benefits include:
- Clearly define the legal terms and ensure that both the parties are abiding by the legal duties
- Put down the rights and obligations of all the involved parties
- Help to improve communication by defining expectations
Essential elements of a product development agreement template
While there are several templates available on the web, make sure that the one you choose has the following sections to create a strong product development contract
1. Scope of services in the product development agreement template
In this section of the product development agreement template, the Provider shall provide details of the services pursuant to the scope of work (attached to the agreement) in exchange for fees compensation/ fees as specified in the compensation section of the agreement. The section also mentions that all the work done shall be delivered to the Client as defined by the delivery schedule attached to the agreement.
2. Confidentiality clause in the product development agreement template
This section of the product development agreement template includes confidentiality clauses and all other details related to product development for the client. It mentions that no aspect/detail or the product being developed (or information given to the Provider by the Client) shall be disclosed to any party without any kind of prior written consent from the Client.
3. Payment arrangements in the product development agreement template
The product development agreement template should clearly define the payment arrangements as agreed by both parties. The section also specifies the details of invoices, for e.g., all the payment shall be paid no later than 30 days from the date they are delivered to the Client. The section also provides a Client acknowledgement about the late payment fees in case of delay in the product development until payment is made in full.
4. Termination details in the product development agreement template
The product development agreement template should also mention the start and end of the date of the project. Apart from this, it should cover the termination rights of the company for any kind of reputation damage, breach of the terms of the agreement or failure to comply with applicable legislation.
A product development agreement contract is an excellent way to protect the rights of both the parties involved in the process. While the client enjoys a high level of intellectual property security and terms of non-disclosure as well as the transfer of all IP rights to them, the developer, freelancer or consultant also gets the assurance of being paid as per the defined timelines.