10 Things to Include in Every Nigerian Software Development Contract

You found a developer. You agreed on a price. You shook hands. Now you are ready to start building. Stop. A handshake is not a contract. Without a proper software development contract, you risk losing your money, your code, and your intellectual property. Nigerian law recognizes written contracts as the foundation of any business relationship. These 10 clauses must be in every software development contract you sign.

1. Scope of Work

The scope of work is the most important part of your contract. It defines exactly what the developer will build. List every feature, every screen, every user role, every integration. The more specific you are, the fewer disputes you will have. Vague descriptions like "a social media app" lead to arguments about what was included.

Attach a detailed requirements document to the contract as an appendix. Both parties initial every page. When the developer says "that feature is extra," you point to the scope of work. Without a detailed scope, you have no way to hold the developer accountable for delivering what you asked for.

2. Timeline and Milestones

Your contract must specify dates. When does development start? When does each phase end? When is the final delivery? Include a timeline with specific milestones: requirements approved, design completed, backend built, frontend built, testing complete, launch. Each milestone should have a clear definition of what "done" looks like.

Include a buffer for unexpected delays, but set firm expectations. If the developer misses a milestone without a valid reason, the contract should specify consequences. A timeline without consequences is just a suggestion.

3. Payment Schedule

Never pay the full amount upfront. Structure payments around milestones. A common structure is 30 percent upfront, 30 percent at mid-development, 30 percent at completion, and 10 percent after a 30-day warranty period. This protects both parties. The developer gets paid as they deliver, and you maintain leverage throughout the project.

Specify the payment method, currency, and due dates. Include late payment penalties to encourage timely payments. If payments are in dollars or a mix of currencies, clarify the exchange rate mechanism. Clear payment terms prevent financial disputes that can derail your project.

4. Intellectual Property Ownership

This clause determines who owns the code when the project is finished. Without an explicit IP ownership clause, the developer may retain ownership and you may only get a license to use the software. That means you cannot sell it, switch developers, or modify it without the developer's permission.

The contract must state that all code, designs, documentation, and related materials become your exclusive property upon full payment. The developer should also warrant that the code is original and does not use any code that would give a third party ownership claims. Do not skip this clause.

5. Confidentiality

Your software project involves sensitive information: your business model, user data, proprietary algorithms, and strategic plans. The developer must sign a confidentiality clause that prevents them from sharing this information with anyone. The clause should survive the termination of the contract, meaning it remains in effect even after the project ends.

Define what constitutes confidential information. Include exceptions for information that is already public or required by law. Specify the duration of the confidentiality obligation, typically 2 to 5 years after the project ends. A strong confidentiality clause protects your competitive advantage.

6. Termination Clause

What happens if the relationship breaks down? Your contract must specify how either party can terminate the agreement. Include grounds for termination: breach of contract, missed milestones, insolvency, or mutual agreement. Specify the notice period required, typically 14 to 30 days.

Most importantly, specify what happens to payments and work completed upon termination. If the developer breaches, you should get a refund for incomplete work. If you terminate for convenience, the developer should be paid for work completed up to that point. A clear termination clause prevents legal battles when things go wrong.

7. Support Period

Software development does not end at launch. Bugs will appear. Users will find issues. The contract must specify a post-launch support period during which the developer fixes bugs at no additional cost. The standard is 30 to 90 days after launch. After that, support may be covered by a separate maintenance agreement.

Define what constitutes a bug versus a feature request. Critical bugs that break core functionality should be fixed within 24 hours. Minor bugs within a week. Feature requests and enhancements fall outside the support period and require a new agreement or change order.

8. Change Order Process

You will want to change things during development. The contract must specify how changes are handled. A change order is a formal document that describes the requested change, its impact on the timeline and budget, and requires both parties to sign. Any change outside the original scope must go through this process.

Without a change order process, scope creep destroys your budget and timeline. Verbal change requests should never be accepted. Train your team to say "put it in a change order." This discipline saves both parties from disputes and ensures everyone agrees on what is being built and at what cost.

9. Warranties

The developer should provide warranties that protect you. The software will conform to the agreed specifications for a defined period. The code is original and does not infringe on any third-party rights. The software is free from material defects. The developer used reasonable security practices in building the software.

Include a disclaimer of warranties for issues caused by third-party services, modifications you make after delivery, or use of the software in ways it was not designed for. Warranties protect both parties by setting clear expectations about the quality and reliability of the delivered software.

10. Dispute Resolution

Disputes happen. Your contract must specify how they will be resolved. The most efficient approach is a multi-step process: informal negotiation first, then mediation with a neutral third party, then arbitration under Nigerian law. Avoid litigation in court. Court cases in Nigeria can take years and cost more than the software project itself.

Specify the governing law (Nigerian law) and the venue for arbitration (typically Lagos or Abuja). Include a clause that the prevailing party is entitled to recover legal costs. A clear dispute resolution clause saves you from expensive and time-consuming legal battles if the relationship goes sour.

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