Legal Question in Technology Law in California
software development agreement
I am developing a software package with another person - I am doing the technical work and he will do sales/marketing. I will spend about 150 hours x $100/hr writing the software. He thinks he can sell 20-30 within a few months for about $2000 with little or no marketing effort because of his contacts in the market. After that, it may take some advertising.
He originally proposed a partnership with a 50/50 split of the sales proceeds. Now he wants to do a buyer/developer contract where he will own the software. He thinks he should deduct expenses from the gross sales and is willing to give me 45% of the gross.
I am concerned that I have invested so much time in the development vs. what will be very little invested by him. After sales of 20-30 packages, I will only be compensated for my time. He will be seeing almost all profit. If he wants to do a buyer/developer contract, should he pay me for my development time or is 45% of the gross adequate compensation?
What is the typical contract for software development? I have been told that I should retain ownership of the code and license the software to him. Then, if he doesn't do enough marketing I can do my own marketing and sell it myself.
2 Answers from Attorneys
Re: software development agreement
You make it sound as though you think you are in a weak position. The fact is, If you do not develop the software, he has nothing to sell. If you own the software, you can find someone else to sell it. So the first 20-30 won't be as easy, if the software is good, there will be a market for it.
You should probably set up a partnership or limited liability company, which you both own. You can then either have the company own the software, or you can jointly license it to the company.
Let me know if you need help drafting a solid, binding agreement. Since there are differences now, you may want outside help in creating the agreement.
Re: software development agreement
it is all negotiable but whoever owns the s/w is in the better position. Why dont you both own it as a partnership asset?
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