An IT project contract requires the parties involved to repeatedly discuss with each other in order to balance the different interests of the contractual partners (in particular the involvement of subcontractors, liability). Usually, therefore, the requirements profile for the software is determined at the beginning of an IT project.

Negotiations are usually controversial and therefore lengthy and require a great deal of resources. Nevertheless, experience shows that they always lead to similar results and at the same time prevent concentration on the essential points of the contract.

IT project contract – sample procedure

In order to save resources, an IT project contract should focus on and regulate the following central points (depending on the project management chosen):

  • Key points of the project
  • Description of the services
  • Rigid or agile project management
  • Documentation of programme errors (“bug tracker”)
  • Documentation and maintenance of backlogs in a dynamic list (“Backlog”)
  • Processing of the “Product Backlog
  • Reporting intervals
  • Binding deadlines for resolving technical problems
  • Allocation of tasks and roles
  • Basic principles for involving subcontractors

Are you planning an IT project and need support in drafting the contract? Or do you have an IT project contract from a service provider in the IT sector ready to sign? Contact us and let us provide you with legal advice as part of a free initial consultation.

A well-drafted IT project contract can make the difference between the success or failure of a project. This requires both the regulation of the implementation of the contract and the regulation in the event of implementation obstacles and problems. The lawyers of the law firm Herr Herfurtner are at your disposal as competent contact persons.

IT Project Contract – Project Management

Basically, two types of project management can be distinguished, which are suitable for different application profiles. In linear project management, the requirements profile for the software is determined at the beginning of a project.

The requirements are recorded in a specification sheet, the technical key points in a requirements specification sheet. The individual points are then worked through. Changes are introduced through a “change request”, a formalised change procedure.

With linear project management, the criticism is that the customer gets what was planned and agreed, but not what is actually needed. This is contrasted with agile project management. This model is suitable when there is only a rough idea whose implementation is urgent.

There is therefore no draft plan that is worked through. Rather, it is an ongoing process improvement in which changes are planned in terms of time and money. Agile project management offers the advantage that the software can be made available to the customer at short notice, as a large part of the planning phase is eliminated.

In addition, this approach makes it possible to react to changes in requirements at short notice. Even this project management is not free of criticism. Especially in IT projects, where the result is already fixed, rigid project management may be more suitable.

In addition, agile project management thrives on continuous communication, which can be time-consuming. The choice of the “right” project management ultimately depends on the individual case of the IT project.

IT project contract – phases and milestones

The defined phases of an IT project contract depend on the chosen project management. The oldest and best-known process model for software development is the so-called waterfall model, which defines the phases in a linear project. This comprises the following phases:

  1. Analysis of requirements
  2. Design of the software architecture
  3. Implementation of the software
  4. Verification and system testing
  5. Delivery, maintenance and support

Since this is only a model, the phases are not clearly defined in practice. In fact, there are often overlaps because the transitions are fluid. In agile project planning, the phases in the waterfall model differ significantly in the time required for the individual phases. The following phases can be defined:

  1. Planning
  2. Rough draft
  3. Implementation
  4. Validation

IT project contract – bug tracker

Bug trackers are tools used in the development of software to document programme errors. They are therefore issue tracking systems. They are used to record faults and at the same time coordinate and monitor their processing.

In the context of IT project contracts, bug trackers offer a variety of advantages over documentation via email collections, for example:

  • Several people can make changes to a document in parallel.
  • The status of developments is updated regularly without the need to query the individual participants.
  • The organisation of an e-mail collection is very time-consuming. Comprehensible documentation is very time-consuming and costs resources.
  • Bug trackers allow documentation in one “place” so that tracking is easy and none of the issues are forgotten.
  • An email collection may not be accessible from everywhere and is dependent on document sharing.

By means of a bug tracker, the following information, among others, can be recorded:

  • Type of issues
  • Responsibility of the employee
  • Possibilities for troubleshooting
  • Measures taken to rectify the error
  • Result of the action
  • Deadlines for error correction
  • estimated time required
  • actual time required

IT project contract – backlog

The backlog documents the work orders to be carried out. It is therefore a dynamic list that records the “order backlog”. In the context of an IT project contract, the product backlog shows all the requirements for the software whose development has been commissioned. The following entries are usually found there:

  • Functionality requirements
  • Quality requirements
  • Improvements
  • Defects that still exist

For the Product Backlog to work, it should have the following characteristics:

  1. Dynamics Entries can be removed or added at any time.
  2. Prioritisation The most important tasks and requirements are listed first.
  3. Gradation The higher an entry is listed, the more detailed the description.
  4. Estimation The estimate of the workload is also based on the position of the entry. The higher the position, the more accurate the estimate.
  5. Valuation The higher the value for the client, the higher the entry moves up the list, regardless of the amount of work involved.

The processing takes place in the Sprint Backlog, the content of which is determined in the Sprint Planning Meeting.

IT Project Contract – Subcontractors

At an early stage of the IT project, for example in the IT project contract, the contracting parties should agree on the involvement of subcontractors. Detailed regulations on this can be made in the actual software contract. Often the possibility of engaging subcontractors will depend on the type of service concerned.

If the know-how of the service provider is important to the client, he will express his objections in the core area of the IT project, whereas he will signal his agreement in the case of merely auxiliary activities. In principle, each party may involve other persons to fulfil the contractual obligations, even without the consent of the other party.

However, this does not apply to highly personal services and if the client has a legitimate interest in the “personal fulfilment of the contract”. This exists above all if the client has selected the service provider on the basis of its know-how, performance, solvency and, if applicable, ownership structure.

In this case, the client’s consent must be obtained. A given consent can only be withdrawn for good cause and with effect for the future.


The following key points can be defined as general guidelines for an IT project contract:

  • Determination of the project management
  • Determination of the documentation standard
  • Choice of appropriate communication

The further details are based on these core points and are variable.

Legal advice in every project phase – contact us

We support and advise you in every phase of the project. We support you as early as the planning phase and set the legal course for a successful IT project. At the same time, we safeguard you with a suitable contract design in the event of problems in the execution of the contract.

The lawyers of the Herfurtner law firm are your partner who will stand by you during the project and warn you of legal pitfalls and help you avoid them.

Author: Arthur Wilms, lawyer