Elements in a Development Contract
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Key points of Development Contract
Services to be provided
Project time and cost
Intellectual property rights
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Types of Development Contract
Time and materials
This type of agreement is the most commonly used in development outsourcing. By signing such type of a contract, you agree to pay for the time your partner spends working on your project.
Fixed bid contracts define, on one hand, the scope that should be delivered, and, on the other hand, the fixed price that is to be paid. This type of agreement is best suited for contracting vendors for small tasks.
The fixed budget contract is a variety of fixed bid. In this model, the project budget is also agreed before the start, however, the scope can change as the development progresses.
Capped budget with accelerated bonus
This model also involves setting a definite budget, however, the development company gets the bonus for delivering the projects ahead of the schedule. While you may be more or less sure about the budget, there is a risk that the vendor may sacrifice the development quality for time.