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Risks in Software Agreements - plan of development E-mail

First of all, the “Plan of Development”, a very important aspect of the contract because the development of the Software program is going to be conducted in compliance with this plan.

Although the plan is also an important aspect of the contract for the Finnish Freaks, we have admitted that is more important for Pale Fire because it is a plan according with whom the entire business is working.

First of all, they certainly have other contracts on the roll that depends of this contract.

And second, they know what they want. We (Finnish Freaks) definitely have the necessary technical skills for developing the software but, let’s recognize that, if we don’t have the requirements we don’t have anything to build. 

So the result was to let the Pale Fire decide the plan of development. Also they were entitled to check the results and if these are according to the plan and if these results would be found not being accordingly to the requirements they have the right to refuse the software. Fair enough.

But being a small company, Finnish Freaks have to take some measures that they understand the requirements and that the software is build according to the plan. In order to do this and to minimize the risk we have proposed a bigger numbers of milestones. In this way the Pale Fire can check that the milestones are reached according to the requirements from the plan (if all the milestones will be reached the entire project will be definitely a success and they will not be able to refuse it).

For Finnish Freaks this is also a safety measure in terms of money.
More milestones mean more modules (activities).
More modules mean less many to spend for each module. So, if a milestone is found not acceptable by the Pale Fire because of a mistake made by the Finnish Freaks, the money spend for the accomplishing the module would not be so much, the Finnish company being able to recover the damages.

Pale Fire recognized that Finnish Freaks has the necessary technical skills to develop the software so they let the Finnish Freaks to choose the way of developing the software. But, Pale Fire have the right (and it is also recommended) to hire an independent consultant with technical skills in order to check that the software is developed according to the plan of development and that the requirements of the US company are met.

Other aspect proposed was the collaboration method. Having more milestones and due to the importance of the project we have decided a strong collaboration based on daily communication through e-mails and a periodically meeting (at the end of each milestone) between the development coordinators. These meetings will be held in Finland (and in this way the budget offered for traveling expenses will be easy to control and explain.)  

One of the fuzzy aspects in the existing contract is the one related with the test that should be made.
As we can see in the first draft, we can not tell from the reading of the “plan of development” which tests should be made. So it is important that the plan of development to include also the specific tests that are required to perform in order to determine the concordance of the results with the requirements.

In this way Pale Fire are able to set a standard of the results that need to be obtained.
For Finnish Freaks this is also an important aspect because they know from the beginning what standards they have to achieve and they can plan their work in such a manner that will lead to a product which will respect the requirements.
Because it is a contract we are talking about, we have to understand that there are some limits. If these limits are broken the contract may end. Such a thing would be not respecting the agreement. This is way the last sentence from the “Plan of

Development” chapter may lead to some understandings.
For Pale Fire a “catch-all” clause is important. In this way they can control all the aspects. In opposite, for Finnish Freaks it is important that these clauses to be precisely defined.


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