The Software Development Outsourcing Contract is essential for organizations in Malaysia seeking to engage external software development service providers. This document is particularly relevant in today's digital transformation landscape where businesses increasingly rely on specialized software solutions while wanting to maintain cost efficiency and access to expertise. The contract addresses key aspects required under Malaysian law, including intellectual property rights, data protection compliance, and digital services regulations. It is designed to protect both parties' interests while ensuring clear project governance, quality standards, and risk management. The document is structured to comply with Malaysian legal requirements while incorporating international best practices in software development outsourcing.
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1. Parties: Identification of contracting parties, including registered addresses and company registration numbers
2. Background: Context of the agreement and high-level purpose of the software development outsourcing arrangement
3. Definitions: Detailed definitions of technical terms, contract-specific terminology, and interpretation rules
4. Scope of Services: Detailed description of software development services to be provided
5. Project Governance: Management structure, reporting lines, and decision-making processes
6. Developer Obligations: Key responsibilities and commitments of the development team
7. Client Obligations: Client responsibilities including provision of information, access, and resources
8. Deliverables: Specific outputs and delivery milestones
9. Acceptance Testing: Procedures for testing and accepting deliverables
10. Change Control: Process for managing changes to scope or requirements
11. Intellectual Property Rights: Ownership and licensing of developed software and related materials
12. Confidentiality: Protection of confidential information and trade secrets
13. Data Protection: Compliance with PDPA 2010 and data handling requirements
14. Warranties and Representations: Guarantees regarding service quality and compliance
15. Payment Terms: Fees, payment schedule, and invoicing procedures
16. Term and Termination: Contract duration and termination provisions
17. Force Majeure: Handling of events beyond reasonable control
18. Liability and Indemnification: Limitation of liability and indemnification obligations
19. Dispute Resolution: Procedures for resolving disputes including jurisdiction choice
20. General Provisions: Standard boilerplate clauses including notices, assignment, and amendments
1. Source Code Escrow: Optional provisions for source code escrow arrangements, recommended for business-critical applications
2. Service Levels: Specific performance metrics and penalties, useful for ongoing development or maintenance arrangements
3. Security Requirements: Detailed security protocols and compliance requirements, essential for handling sensitive data
4. Business Continuity: Disaster recovery and business continuity provisions, important for critical systems
5. Knowledge Transfer: Provisions for training and knowledge transfer, useful for long-term projects
6. Non-Competition: Restrictions on competitive activities, relevant when sharing sensitive business knowledge
7. Insurance: Specific insurance requirements, recommended for high-value or high-risk projects
8. Third-Party Contractors: Rules for engaging subcontractors, relevant when subcontracting is permitted
1. Schedule 1: Software Requirements Specification: Detailed technical specifications and requirements for the software
2. Schedule 2: Project Plan: Timeline, milestones, and delivery schedule
3. Schedule 3: Pricing and Payment Schedule: Detailed breakdown of costs and payment milestones
4. Schedule 4: Service Levels and KPIs: Specific performance metrics and measurement criteria
5. Schedule 5: Technical Stack and Architecture: Approved technologies, frameworks, and architectural specifications
6. Schedule 6: Testing and Acceptance Criteria: Detailed testing procedures and acceptance requirements
7. Schedule 7: Support and Maintenance Terms: Post-development support and maintenance specifications
8. Schedule 8: Personnel and Key Contacts: Key personnel from both parties and their roles
9. Appendix A: Change Request Template: Standard form for requesting and documenting changes
10. Appendix B: Acceptance Certificate Template: Standard form for accepting deliverables
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