Software development outsourcing supplementary agreement

The article is a part of Code Inspiration’s software development outsourcing Knowledge Base.

Sometimes parties to a software development agreement face a necessity to sign a supplementary agreement. Let’s have a look at what is a supplementary agreement and why a software development company and a client sign it.

What is supplementary agreement?

In fact, supplementary agreement is an integral part of “basic” agreement. The supplementary agreement supplements, but does not duplicate the clauses of the basic agreement. The software development supplementary agreement should not include a repeated description of the essential terms of the main contract if it is not directly related to these clauses.

It is important that the supplementary agreement cannot be related to such conditions, the change of which will radically change the essence of the contract. For example, it is impossible to change the subject of the contract from a dedicated development team to software maintenance and support by means of a supplementary agreement.

The supplementary agreement must be concluded by the same parties as the main contract. Otherwise, such a supplementary agreement will be invalid.

Software development supplementary agreement. Integral aspects

Even though the supplementary agreement is usually smaller compared to the main contract, it must contain some vital integral points. Let’s have a look at them:

  1. Title and number. Usually it is something like “Supplementary Agreement № X to Software Development Agreement № Z”.
  2. Place and date of the supplementary agreement.
  3. Introductory part, which usually repeats the same part in the main agreement. Just in case, it usually says “Company X in the person of Mr./Ms. Name Surname, Title, referred hereinafter as an Executor, on the one hand and Company Z, in the person of Mr./Ms. Name Surname, Title, have concluded the current Supplementary Agreement to the Software Development Agreement as follows:”.
  4. Clauses of the supplementary agreement themselves. They should be written with a strong relation to the provisions indicated in the main contract. This means the clause should start with the words “To read paragraph X as follows …” in case there is a necessity to “edit” some statement. But, in case the provision in a supplementary agreement adds some new statement, it should be written in a usual way, without mentioning some paragraph of the main agreement.
  5. A paragraph declaring that this supplementary agreement is an integral part of the main agreement, obligatory indicating the number, name and date of the main contract.
  6. A paragraph declaring that parties to this supplementary agreement should be guided by the main agreement in all items not covered by the supplementary agreement. 

Final thoughts

Well, in fact, supplementary agreement is a simple and flexible document. 

Supplementary agreement allows parties to adapt their business relations to changing environments. With this document, parties are able to change the number of employees engaged, their rates, amounts of payment and payment schedule, agreement’s term etc. It is easier to sign a supplementary agreement, editing necessary points, or terminating and signing a completely new contract.

Hope you got the point of a supplementary agreement. Let your agreement always be clear, valid and profitable!

The article is a part of Code Inspiration’s software development outsourcing Knowledge Base.