Software Development Outsourcing Contract Template for Malaysia

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Key Requirements PROMPT example:

Software Development Outsourcing Contract

"I need a Software Development Outsourcing Contract for outsourcing the development of a fintech application to a Malaysian developer, with strict data protection requirements and source code escrow provisions, expected to commence in March 2025."

Document background
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.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Technology

Financial Services

Healthcare

E-commerce

Manufacturing

Education

Telecommunications

Professional Services

Government and Public Sector

Retail

Logistics and Supply Chain

Insurance

Real Estate

Media and Entertainment

Relevant Teams

Legal

Information Technology

Procurement

Finance

Risk and Compliance

Information Security

Operations

Project Management Office

Software Development

Quality Assurance

Vendor Management

Business Analysis

Relevant Roles

Chief Technology Officer

Chief Information Officer

IT Director

Project Manager

Legal Counsel

Procurement Manager

Software Development Manager

Contract Manager

Compliance Officer

Information Security Officer

Technical Architect

Operations Director

Finance Director

Risk Manager

Business Development Manager

Vendor Management Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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