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What is a software agreement? It is the umbrella term for any contract in which you make agreements regarding the delivery, use, or maintenance of software. It is a framework document: various more specific forms fall under this heading, such as a license agreement, a SaaS agreement, a development agreement for custom software, and a maintenance contract. Which variant you need depends on whether you use, offer, have built, or resell the software. The core is always: who is allowed to do what with the software, under what conditions, and who holds the intellectual property.
The short answer
- A software agreement is the framework contract for the supply, use, or maintenance of software.
- It includes variants such as licensing, SaaS, custom development, maintenance, and reselling.
- Software is protected by copyright (Article 45i et seq. of the Copyright Act); you use or transfer that right.
- Usually, you acquire a right of use via a license, not ownership.
- If the software processes personal data, a data processing agreement is required (Article 28 GDPR).
What is a software agreement and what forms exist?
Software is a work within the meaning of the Copyright Act. The rules regarding this are set out in, among others, Article 45i et seq., which contains a separate provision for computer programs. Because software is protected, you cannot simply use it without the permission of the rights holder. A software agreement regulates that permission and the associated conditions. Depending on your situation, that framework takes a concrete form:
- License Agreement. You obtain the right to use existing software, often for a fee and subject to usage restrictions.
- SaaS agreement. You use software as a service via the internet, without installing or owning the software yourself.
- Development Agreement. You are having custom software built; here, the copyright to the code can be transferred.
- Maintenance contract. Agreements regarding updates, support, and troubleshooting.
- Reselling agreement. You resell software from another party, possibly with added services.
Right of use or ownership
The most important distinction in virtually every software agreement is that between a right of use and ownership. In most cases, you receive a license: the right to use the software for a specific purpose. The lawful user may use the software for the intended purpose pursuant to Section 45j of the Copyright Act, but this is not ownership. The copyright remains with the creator, unless it is expressly transferred. Transfer of copyright can only be effected by deed.
For most SME situations, a right of use is fine. You do not need to own your accounting package software or CRM. Only for custom work that is crucial to your business can it make sense to acquire ownership of the code.
What always belongs in
Regardless of the variant, a few topics recur in virtually every software agreement:
- Scope of the right of use. Which software, how many users, for what purpose, and in which territory.
- Fees. One-off, periodic, or per-user, and how prices may be adjusted.
- Duration and termination. Term, notice period, and what happens to dates at the end.
- Service and maintenance. Uptime, support, and updates, usually included in a service level.
- Liability. Who bears which damages if the software does not work or contains errors.
- Privacy. A data processing agreement if personal data is processed.
A practical example: a consultancy firm purchases an online project planning tool. There is no customization and no development, so the appropriate form is a SaaS license. The firm obtains usage rights for fifteen employees, pays monthly, and the supplier guarantees 99.5 percent uptime. Because the tool contains client data, a data processing agreement is required. A full transfer of copyright is not applicable here, as the firm is not building anything and does not need to become the owner.
Privacy and the data processing agreement
If the software processes personal data, the division of roles under the GDPR is important. Usually, you as the user are the data controller and the supplier is the data processor. Article 28 of the GDPR then mandates a data processing agreement with arrangements regarding security, sub-processors, retention periods, and the reporting of data breaches. Such a data processing agreement is part of virtually every modern software agreement through which data flows within the software.
Honest recommendation
If you purchase a standard package or a common SaaS service, the supplier's terms are often in line with market standards and you usually do not need a lawyer; checking a good data processing agreement is sufficient in that case. However, as soon as it concerns custom work, software that is crucial to your business, or a situation where you offer or resell the software, choosing the right variant and the precise agreements regarding ownership and liability become important. Therefore, start by considering your role—user, developer, supplier, or reseller—as this determines the type of software agreement you need.
Want to know more? View the software agreement, read exactly what is included in drafting a software agreement and what it costs to have one drawn up.
Frequently Asked Questions
It is the umbrella term for any contract regarding the delivery, use, or maintenance of software. More specific forms fall under this framework, such as a license, a SaaS agreement, custom development, a maintenance contract, and a reselling agreement.
The common forms are the license agreement, the SaaS agreement, the development agreement for customization, the maintenance contract, and the reselling agreement. Which one you need depends on whether you use, have built, offer, or resell software.
Usually not. As a rule, you obtain a right of use via a license. The copyright remains with the creator; see Article 45j of the Copyright Act. Only in the case of custom work can you agree that the copyright to the code is transferred to you by deed.
With a license, you obtain the right to use software, often installed on your own systems. With SaaS, you use the software as a service via the internet, without installation or ownership. Both are forms of the overarching software agreement.
Yes. A computer program is a protected work under the Copyright Act, with a separate regulation starting from Article 45i. Therefore, you need permission from the rights holder to use software, and you arrange this in a software agreement.
If the software processes personal data, usually yes. If you are the data controller and the supplier is the data processor, Article 28 of the GDPR requires a data processing agreement with agreements regarding security, sub-processors, retention periods, and data breaches.
That depends on your role. As a user, a license or SaaS agreement; as a client of custom work, a development agreement; as a maintenance provider, a maintenance contract; and as a reseller, a reselling agreement. So start by asking what role you have.
