Software Contracts

Question 1

Software Contract? (Definition)

Answer 1

Legally enforceable agreements defining:
- Scope of work
- Client and developer responsibilities
- Project deliverables and terms

Aims to minimize risks and disputes

Question 2

Scope of work (1 KR of SC)

Answer 2

Describes the work to be done (product and project scope)
- Product scope : features the functions of the product
- Project scope: work required to deliver the product

Question 3

Scope creep

Answer 3

occurs after some changes to the project’s original scope

Question 4

Client responsibilities (2 KR of SC)

Answer 4

Must cooperate for project success by:
* Providing essential data.
* Reviewing and approving deliverables.
* Declaring final acceptance.

Question 5

Project Control (3 KR of SC)

Answer 5

Ensures structured development:
* Appointment of project managers.
* Regular progress meetings.

Question 6

Copyright Ownership (4 KR of SC)

Answer 6

• Determines software rights:
  
  • Assignment: Client owns copyright upon delivery.
  • Licensing: Developer retains copyright but licenses it to the client.

Question 7

Confidentiality (5 KR of SC)

Answer 7

• Protects shared sensitive information.
• May involve Non-Disclosure Agreements (NDAs):
  * Unilateral, bilateral, or multilateral.

Question 8

Indemnity (6 KR of SC)

Answer 8

Protects parties from legal consequences of third-party claims.
* Example: Safeguards clients from copyright infringement by the developer.

Question 9

Warranty and Maintenance (7 KR of SC)

Answer 9

• Defines post-delivery support:
  
  • Warranty period for defect resolution.
• Maintenance terms for ongoing support.

Question 10

Arbitration Procedures (8 KR of SC)

Answer 10

• Defines dispute resolution steps:
  
  • Contract details.
  • Negotiation records.
• Industry norms or implied terms.

Question 11

Termination Criteria (9 KR of SC)

Answer 11

Conditions for contract termination:
* Performance criteria.
* Breach of contract.
* Mutual agreement.

Question 12

Product Liability

Answer 12

Developers may face claims for injuries or losses caused by software defects.

Question 13

Common Liability Grounds

Answer 13

• Strict Liability: Developer accountable regardless of intent.
  
  • Negligence: Failing to meet reasonable development standards.
  • Breach of Warranty: Failure to meet promised software quality.
• Examples:
  
  • Boeing 737 MAX: Software errors leading to crashes.
  • Horizon IT Scandal: Faulty system led to wrongful prosecutions.

Question 14

Challenges in Software Development

Answer 14

1. Scope Management
   - Properly defining and controlling project scope.
2. Risk mitigation
   - Anticipating and addressing project complexities (e.g., Denver International Airport baggage system).
3. Quality Assurance
   - Ensuring robust testing to avoid legal and operational failures.

Question 15

Real World Success Stories

Answer 15

1. Amazon
   
   • Transitioned to Service-Oriented Architecture (SOA).
   • Enhanced scalability with 150+ decentralized web services.
2. Wachovia Bank
   
   • Reduced model development time from 12 months to 90 days using shared services.
3. eBay
   
   • Efficiently manages 2+ petabytes of data with tiered SOA.

Question 16

Real Software Bug: Horizon IT Scandal

Answer 16

• Timeline:
  * 1999: System rollout.
  * 2000–2014: 734 wrongful prosecutions based on faulty data.
  * 2021: Convictions overturned.
  
  • Issues:
    
    • Poorly maintained logs.
    • Loss of synchronization in distributed systems.
  • Impact:
    
    • Wrongful imprisonment of employees.
  • Multi-million-pound lawsuits and reputational damage.