Free Product Development Agreement Template

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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.

Frequently Asked Questions
Questions about this template.

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.

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.

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.

Template preview

Free Product Development Agreement Template

Product Development Agreement

First Name
Last Name
Acme LLC.
First Name
Last Name
Corporation Corp.


This Product Development Agreement (hereinafter referred to as the "Agreement") is entered into by and between Acme LLC (hereinafter referred to as the "Contractor") and Client (hereinafter referred to as the "Client", collectively referred to as the "Parties"), both of whom agree to be bound by this Agreement.


This Agreement shall be effective on [the date of signing this Agreement] (the "Effective Date") and will end on [END DATE OR "under the work is completed"].

Upon the end of the term of the Agreement, this Agreement will not be automatically renewed for a new term.


For the purpose of this Agreement, the "Product" will be considered the [PRODUCT DESCRIPTION], its derivatives or any elements contained within the Product itself.

The Client will be able to add more products within the scope of this Agreements with written confirmation of the Contractor.


The Parties agree that the Contractor shall perform the following services (hereinafter referred to as the "Project"):


  • Identify and align the Client's Product to market needs and customer problems meet business objectives.
  • Compare existing products in the market with regards of the Client's Product to optimize product differentiation.
  • Implement mechanisms and standardize processes that help improving the Product.
  • Apply a high level perspective to product design and development for the Client to understand product goals and create an overall vision for product development.


The Client agrees to compensate the Contractor an amount of [HOURLY RATE] per hour and the Contractor agrees to invoice the Client for the total amount of hours worked at the end of each [WEEK/MONTH].

The Contractor reserves the right to increase or decrease the amount billed with written confirmation by both Parties in the event of changes to the original Product or Project scope. The Parties agree that in the event that the invoices are not paid within thirty days of receiving them, the Contractor will be entitled to charge a late fee of [LATE FEE]%.


  1. Provide a clear and specific request regarding the details of the Project.
  2. To pay the corresponding invoices in the proper time.
  3. _____________________________________________________
  4. _____________________________________________________


  1. To progress the Project from start to finish striving to achieve the Client's goals with the Product.
  2. To clearly communicate expectations regarding the success or failure of the Project.
  3. Implement ongoing evaluations and recommendations of the Client's Product based on product research.
  4. Identify business opportunities, collecting and evaluating customer reviews to develop the Product within its market.
  5. _____________________________________________________
  6. _____________________________________________________


The Parties each agree to indemnify and hold harmless the other Party, its respective affiliates, officers, agents, employees, and permitted successors and assigns against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever, which result from the negligence of or breach of this Agreement by the indemnifying party, its respective successors and assigns that occurs in connection with this Agreement.

This section will remain in full force and intact, even upon the termination of the Agreement or the early termination by either of the Parties.


  • This Agreement shall be governed by and construed in accordance with the laws of the United States of America.
  • The Contractor is an independent contractor. Neither Party is an agent, representative, partner, or employee of the other Party.
  • The Parties understand this Contract is not an exclusive arrangement.
  • The Parties agree that they are free to enter into other similar agreements with other parties.
  • The Contractor agrees that they will not enter into any agreements that conflict with their obligations under this Contract.


The Contractor hereby assigns to the Client all rights, including, without limitation, copyrights, patents, trade secret rights, and any other intellectual property rights associated with any ideas, concepts, techniques, inventions, or works of authorship (the "work product"), developed or created by the Contractor, solely or jointly with others, during the course of the Project for or on behalf of the Client or any affiliate of the Client, or the predecessors of any such entities.

Without limiting the foregoing, to the extent possible, all software, compilations and other original works of authorship included in the Project will be considered sole property and owned by the Client. If, notwithstanding the foregoing, the Contractor for any reason retains any right, title or interest in or relating to the Project, the Contractor agrees to assign, in writing and without any requirement of further consideration, all such right, title, and interest to the Client.

The Client gives the Contractor permission to use the work product as part of portfolios, websites, in galleries, and in other media, so long as it is to showcase the work product and not for any other purpose.


This Agreement is ongoing until it expires or the work is completed. Either party may end this Agreement for any reason by sending a written notice to the other party. The Contractor must immediately stop working as soon as it receives this notice, unless the notice says otherwise.

If either party terminates this Agreement before the work is completed, the Client must pay the Contractor for the work that has been already completed and will reimburse the Contractor for any agreed-upon, non-cancellable expenses.


Any dispute or difference whatsoever arising out of or in connection with this Agreement shall be submitted to arbitration, mediation and negotiation in accordance with, and subject to the laws of the United States of America.


The Parties agree that any amendments made to this Agreement must be in writing, where they must be signed by both Parties to this Agreement. Accordingly, any amendments made by the Parties will be applied to this Agreement.


The Parties agree not to assign any of the responsibilities in this Agreement to a third party, unless consented to by both Parties in writing.


This Agreement contains the entire agreement and understanding among the Parties to it with respect to its subject matter, and supersedes all prior agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to its subject matter. The express terms of the Agreement control and supersede any course of performance and/or usage of the trade inconsistent with any of its terms.

This Agreement is legal and binding between the Parties as stated above. The Parties each represent that they have the authority to enter into this Agreement.


If any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, then the remaining provisions will remain in force in accordance with the Parties' intention.


The Parties hereby agree to the terms and conditions set forth in this Agreement and such is demonstrated by their signatures below:

First Name
Last Name
Acme LLC.
First Name
Last Name
Corporation Corp.