CSC-307 PROFESSIONAL PRACTICES
COMPUTER CONTRACT
COURSE INSTRUCTOR: ENGR. REEMA QAISER KHAN
COMPUTER CONTRACTS
Computer Contracts means all agreements, contracts, permissions, undertakings, arrangements and
understandings (whether written or oral) under which any third party (including the Seller or any of its Group
Members (other than any Group Company) and any source code deposit agent) provides any element of, or
services relating to, the Computer Systems, including leasing, hire purchase, licensing, hosting, support,
maintenance, disaster recovery and other services.
CONTRACTS
An agreement between two or more parties for the doing or not doing of something specified.
Contracts serve the following purpose:
Set out the agreement between the parties
Set out the aims of the parties
Provide for matter arising while the contract is running (conflict)
Ways of terminating the contract and the consequences
CONTRACTS
In order to avoid disputes and future difficulties it is better to draft a document which sets out:
The terms on which both parties is to work.
Methods of payments
Appropriate ways to terminate the contract-notice required
CONTRACTS FOR THE SUPPLY OF CUSTOM-BUILT SOFTWARE AT A
FIXED PRICE
Software suppliers try to use what are known as standard form contracts (tender) , which are used or intended
to be used many times over.
Such a contract might consist of:
a short introductory section
A set of standard terms and conditions
A set of appendices or annexes
CONTRACTS FOR THE SUPPLY OF CUSTOM-BUILT SOFTWARE AT A
FIXED PRICE
INTRODUCTORY SECTION
It states that it is an agreement between the parties whose names and registered addresses are given.
It is dated and signed by authorized representatives of the parties.
It often begins with a set of definitions of terms used in the course of the agreement, set out either in
alphabetical order, like a dictionary, or in the order in which they appear in the rest of the contract –The
Company, The Client
Terms and conditions
Do not change from one project to another; they contain references to the annexes, which contain all the project
specific material.
Annexes
An Annexure is “something that is attached, such as a document to a report”. a Schedule is “a
written list or inventory; esp., a statement that is attached to a document and that gives a detailed
showing of the matters referred to in the document”.
Must include any document stated like Requirements specification. This is to avoid, for example, the situation in
which statements made by an over-enthusiastic salesman while trying to win the business are claimed by the
client to constitute part of the contract
ISSUES DEALT WITH STANDARD TERMS & CONDITIONS
What is to be produced?
What is to be delivered? (source code, command files, training to employees)
Ownership of rights (in physical items books, disks, documents or duration of license)
Payment terms
Calculating payments for delays and changes
Penalty clauses
Obligations of the client
ISSUES DEALT WITH STANDARD TERMS & CONDITIONS
Standards and methods of working (QA procedures)
Progress meetings
Project Managers
Acceptance procedure
Warranty and maintenance
Termination of the contract
TYPES OF SOFTWARE SERVICES CONTRACT
1. Fixed Price Contracts
2. Purchase Orders
3. Cost Reimbursable Contract
4. Unit Price Contract
5. Time and Materials Contract
FIXED PRICE CONTRACTS
With fixed price contracts, also known as lump sum contracts, the buyer and service provider agree on a fixed
price for the services in question.
This type of contract is low-risk for the buyer, but high-risk for the seller since the time and costs of the project
could exceed the fixed price.
For this reason, a fixed price contract should include a detailed scope of work that clearly outlines what the buyer
can expect for the agreed-upon price.
PURCHASE ORDERS
A purchase order is a specific type of contract that is used only to purchase goods and commodities.
COST-REIMBURSEMENT CONTRACT
A cost-reimbursement contract is an agreement between two parties to provide payment for
allowable costs incurred by the other party. The final pricing of the deal is determined later based on
the underlying deal and the actual costs it took to complete a project.
UNIT PRICE CONTRACT
A unit price contract pays a specified hourly rate for every hour spent on the project. It is commonly used by
freelancer workers.
TIME AND MATERIALS CONTRACT
This contract is used when labor is the main deliverable and typically provides the seller an hourly rate.
This portion of the agreement ensures that the developer will be paid, even if the timeline for the project is
longer than expected.
