{"id":5387,"date":"2026-10-06T10:32:30","date_gmt":"2026-10-06T13:32:30","guid":{"rendered":"https:\/\/nextage.com.br\/blog\/?p=5387"},"modified":"2026-10-06T10:32:30","modified_gmt":"2026-10-06T13:32:30","slug":"software-factory-contract","status":"publish","type":"post","link":"https:\/\/nextage.com.br\/blog\/en\/software-factory-contract\/","title":{"rendered":"Software factory contract: what to consider before you sign"},"content":{"rendered":"<p dir=\"ltr\">A software factory contract defines who delivers what, by when, at what quality level, and who owns the code at the end. When the document is vague, the risk falls on the client: scope that grows without an amendment, deadlines with no consequences, and dependence on the vendor to evolve the system.<\/p>\n<p dir=\"ltr\">The cost of these failures is well documented. In a study by <a href=\"https:\/\/www.mckinsey.com\/capabilities\/tech-and-ai\/our-insights\/delivering-large-scale-it-projects-on-time-on-budget-and-on-value\" target=\"_blank\" rel=\"noopener\">McKinsey and the University of Oxford<\/a> covering more than 5,400 projects, large IT projects (above US$ 15 million) ran 45% over budget and 7% over schedule on average, while delivering 56% less value than predicted. The study focuses on large projects, but the lesson applies at any scale: what is not written in the contract tends to become cost.<\/p>\n<p dir=\"ltr\">In this guide, you will see the 12 points a software factory contract must cover, how each pricing model changes the clauses, and which questions to ask your vendor before signing.<\/p>\n<p dir=\"ltr\"><em>This content is informational and does not replace advice from a lawyer.<\/em><\/p>\n<h3 dir=\"ltr\">Quick summary<\/h3>\n<ul dir=\"ltr\">\n<li>Choose the engagement model (fixed scope, dedicated squad or sustainment) before negotiating clauses.<\/li>\n<li>Scope, acceptance criteria and change management prevent most disputes.<\/li>\n<li>Source code and documentation should belong to the client, expressly.<\/li>\n<li>Data protection, confidentiality and SLAs need clear rules, with deadlines and consequences.<\/li>\n<li>Define the exit from day one: delivery of code, documentation and knowledge transfer.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5388\" src=\"https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-scaled.avif\" alt=\"Two people reviewing a contract: one points to a field on the document while the other holds a pen, ready to sign\" width=\"2560\" height=\"1707\" srcset=\"https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-scaled.avif 2560w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-300x200.avif 300w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-1024x683.avif 1024w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-768x512.avif 768w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-1536x1024.avif 1536w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-2048x1365.avif 2048w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-150x100.avif 150w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-330x220.avif 330w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-420x280.avif 420w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/diverse-business-partners-reading-contract-together-1-510x340.avif 510w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<h2 dir=\"ltr\">What is a software factory contract, and how does it differ from outsourcing?<\/h2>\n<p dir=\"ltr\">A software factory contract formalizes a model in which the vendor takes responsibility for delivery: it plans, builds, tests and deploys the system, while the client tracks results and indicators. At <a href=\"https:\/\/nextage.com.br\/en\/services\/software-factory\/\" target=\"_blank\" rel=\"noopener\">NextAge&#8217;s software factory<\/a>, for example, the client defines the business goal and the team handles the full cycle, from discovery to the evolution of the system.<\/p>\n<p dir=\"ltr\">In outsourcing, the vendor provides professionals who work under the client&#8217;s management. This difference changes the contract: in a software factory, the focus is on deliverables, deadlines and quality; in staff allocation, it is on profiles, hours and availability. For more detail, see the comparison <a href=\"https:\/\/nextage.com.br\/blog\/en\/software-factory-vs-outsourcing-which-model-is-best-in-2026\/\" target=\"_blank\" rel=\"noopener\">Software Factory vs Outsourcing<\/a> and the explanation of the <a href=\"https:\/\/nextage.com.br\/blog\/diferenca-entre-fabrica-de-software-e-software-house-descubra-qual-modelo-sua-empresa-precisa\/\" target=\"_blank\" rel=\"noopener\">difference between a software factory and a software house<\/a>.<\/p>\n<h2 dir=\"ltr\">Which engagement model should you choose: fixed scope, dedicated squad or sustainment?<\/h2>\n<p dir=\"ltr\">The engagement model defines how you pay, who bears each risk and which clauses matter most. The table summarizes the options; the first three models follow the <a href=\"https:\/\/nextage.com.br\/en\/services\/software-factory\/\" target=\"_blank\" rel=\"noopener\">NextAge software factory page<\/a>.<\/p>\n<div dir=\"ltr\">\n<table>\n<thead>\n<tr>\n<th scope=\"col\">Model<\/th>\n<th scope=\"col\">How it is priced<\/th>\n<th scope=\"col\">Main risk<\/th>\n<th scope=\"col\">Critical clauses<\/th>\n<th scope=\"col\">Best for<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Fixed scope<\/td>\n<td>Price and deadline for an approved scope<\/td>\n<td>Amendments for every change; poorly described scope<\/td>\n<td>Detailed scope, acceptance criteria, change requests<\/td>\n<td>Projects with clear requirements<\/td>\n<\/tr>\n<tr>\n<td>Dedicated squad<\/td>\n<td>Fixed monthly fee for an exclusive team, with SLA<\/td>\n<td>Paying for capacity without delivery goals<\/td>\n<td>Team composition and seniority, goals, replacement, rituals<\/td>\n<td>Digital products in continuous evolution<\/td>\n<\/tr>\n<tr>\n<td>Sustainment and evolution<\/td>\n<td>Monthly fee or volume by demand<\/td>\n<td>Slow response to incidents<\/td>\n<td>SLA by severity, service window, transition<\/td>\n<td>Critical systems in production<\/td>\n<\/tr>\n<tr>\n<td>Time and material<\/td>\n<td>Hours actually worked<\/td>\n<td>Payment tied to hours, not results<\/td>\n<td>Hour cap, reports, prior approval<\/td>\n<td>Small, variable demands<\/td>\n<\/tr>\n<tr>\n<td>Function points<\/td>\n<td>Price per function point delivered<\/td>\n<td>Low unit price; counting disputes<\/td>\n<td>Counting rules (IFPUG), audit<\/td>\n<td>Large contracts, common in the public sector<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p dir=\"ltr\">Time and material and function points are market models, described in public procurement materials such as the <a href=\"https:\/\/bnb.gov.br\/documents\/45839\/9965526\/Anexo%20VII%20-%20Guia%20de%20Contrata%C3%A7%C3%A3o%20em%20Pontos%20de%20Fun%C3%A7%C3%A3o%20-%20RFI%202026-003.pdf\/9b182fc5-14cd-21e1-2f51-acf9a6381445\" target=\"_blank\" rel=\"noopener\">function point contracting guide from Banco do Nordeste<\/a>. If you are unsure which model fits, NextAge starts with Discovery and recommends the ideal format for the project. <a href=\"https:\/\/nextage.com.br\/en\/services\/software-factory\/\" target=\"_blank\" rel=\"noopener\">Talk to a specialist<\/a>.<\/p>\n<h2 dir=\"ltr\">The 12 points a software factory contract must cover<\/h2>\n<h3 dir=\"ltr\">1. Scope, deliverables and acceptance criteria<\/h3>\n<p dir=\"ltr\">The contract should state what will be delivered, what is out of scope and how each deliverable will be accepted. List features, platforms and integrations; define measurable acceptance criteria, a review period and a classification of defects. Describing scope in a single generic sentence is the most common mistake and the origin of many disputes.<\/p>\n<p dir=\"ltr\">Question for the vendor: does the discovery output become an annex to the contract?<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\"><strong>In practice (NextAge):<\/strong> Discovery maps goals, users, processes, integrations and risks, and delivers a clear scope, a prioritized backlog and an estimate of timeline and investment before development starts. Learn more about <a href=\"https:\/\/nextage.com.br\/servicos\/ideacao-blueprint\/\">Deep Discovery<\/a>.<\/p>\n<\/blockquote>\n<h3 dir=\"ltr\">2. Engagement model and pricing<\/h3>\n<p dir=\"ltr\">The contract should spell out the pricing method, what the price includes and how adjustments work. Confirm whether management, QA, DevOps and deployment are inside the price; otherwise, proposals that look alike are not comparable. Also record expected extra costs, such as environments and third-party licenses.<\/p>\n<p dir=\"ltr\">Question for the vendor: does the price include QA, management and deployment?<\/p>\n<h3 dir=\"ltr\">3. Change management<\/h3>\n<p dir=\"ltr\">Every project changes; the contract needs to say how. Define the change request process, who approves it and how the impact on time and cost is estimated. Uncontrolled scope growth is one of the biggest risks in software projects, as this <a href=\"https:\/\/ones.com\/blog\/contract-management-in-software-project-management-essential-clauses-explained\/\" target=\"_blank\" rel=\"noopener\">guide to contract clauses<\/a> points out. Avoid approving changes by email or chat without a formal record.<\/p>\n<p dir=\"ltr\">Question for the vendor: how is a change estimated and approved?<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\"><strong>In practice (NextAge):<\/strong> deliveries happen every two weeks, with a demonstration; the client follows progress on the project board and can adjust priorities.<\/p>\n<\/blockquote>\n<h3 dir=\"ltr\">4. Timeline, milestones and payment<\/h3>\n<p dir=\"ltr\">Payment should follow delivered and accepted milestones. Structure the schedule in verifiable stages, with conditions for the initial payment and, if possible, a portion withheld until final delivery. Paying most of the price before seeing working software weakens the client&#8217;s position.<\/p>\n<p dir=\"ltr\">Question for the vendor: which share of the payment is tied to which milestone?<\/p>\n<h3 dir=\"ltr\">5. SLA and quality indicators<\/h3>\n<p dir=\"ltr\">The SLA (service level agreement) must be measured, reported and carry consequences if it is missed. Define delivery and support SLAs, severity levels, response and resolution times, and the format of reports. An SLA with no measurement or penalty is just a promise. It is also worth asking how quality is ensured: dedicated QA, automated testing and code review, as in NextAge&#8217;s <a href=\"https:\/\/nextage.com.br\/servicos\/quality-center\/\" target=\"_blank\" rel=\"noopener\">Quality Center<\/a>.<\/p>\n<p dir=\"ltr\">Question for the vendor: how is the SLA measured and reported?<\/p>\n<h3 dir=\"ltr\">6. Intellectual property and source code<\/h3>\n<p dir=\"ltr\">The contract should state expressly that source code, documentation and the repository belong to the client. Brazil&#8217;s <a href=\"https:\/\/www.planalto.gov.br\/ccivil_03\/leis\/l9609.htm\" target=\"_blank\" rel=\"noopener\">Software Law (Law 9,609\/1998)<\/a>, in Article 4, grants the rights to the contracting party unless the contract states otherwise; because the contract can provide differently, an express assignment avoids surprises. Also ask for a list of third-party and open source components, with their licenses, and clarify which tools belong to the vendor.<\/p>\n<p dir=\"ltr\">Question for the vendor: is the repository in the client&#8217;s name from day one?<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\"><strong>In practice (NextAge):<\/strong> intellectual property, source code and documentation belong to the client, as set out in the contract.<\/p>\n<\/blockquote>\n<h3 dir=\"ltr\">7. Confidentiality and information security<\/h3>\n<p dir=\"ltr\">Confidentiality should survive the end of the contract and come with real controls. Include an NDA, rules for access to data and systems, environment separation and security good practices. Treat secrecy as an operational commitment, not just a standard clause, and ask which certifications and controls the team follows.<\/p>\n<p dir=\"ltr\">Question for the vendor: which security controls does the team apply day to day?<\/p>\n<h3 dir=\"ltr\">8. Data protection (LGPD)<\/h3>\n<p dir=\"ltr\">If the factory has access to personal data, the contract should define the roles of controller and processor and include a DPA (data processing agreement). Under Brazil&#8217;s <a href=\"https:\/\/www.planalto.gov.br\/ccivil_03\/_ato2015-2018\/2018\/lei\/l13709.htm\" target=\"_blank\" rel=\"noopener\">LGPD (Law 13,709\/2018)<\/a>, the processor handles data according to the controller&#8217;s instructions (Art. 39) and is jointly liable if it breaches the law or those instructions (Art. 42, \u00a7 1); see this <a href=\"https:\/\/confidata.com.br\/blog\/gestao-fornecedores-lgpd-controladores-operadores\" target=\"_blank\" rel=\"noopener\">explanation by Confidata on controllers and processors<\/a> (in Portuguese). Include rules for subprocessors, incident notification deadlines, and data retention and disposal.<\/p>\n<p dir=\"ltr\">Question for the vendor: is there a DPA, and what is the deadline to report incidents?<\/p>\n<h3 dir=\"ltr\">9. Warranty and post-delivery support<\/h3>\n<p dir=\"ltr\">The contract should set a warranty period in which defects are fixed at no cost, and distinguish a defect from a new feature. Without that criterion, any adjustment becomes a discussion about who pays. Also define how the system moves from delivery to sustainment.<\/p>\n<p dir=\"ltr\">Question for the vendor: what counts as a defect and what counts as an enhancement?<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\"><strong>In practice (NextAge):<\/strong> after deployment, <a href=\"https:\/\/nextage.com.br\/servicos\/sustentacao-ams\/\">Sustainment (AMS)<\/a> covers fixes, improvements and continuous evolution.<\/p>\n<\/blockquote>\n<h3 dir=\"ltr\">10. Team, governance and subcontracting<\/h3>\n<p dir=\"ltr\">The contract should name profiles and seniority, provide for replacement of professionals and define a single point of contact. A &#8220;team of specialists&#8221; with no composition protects no one. Include follow-up rituals (sprint reviews, board access) and the vendor&#8217;s responsibility for any subcontractors. At NextAge, the multidisciplinary team is in-house (project management, architecture, product, development, DevOps, UX\/UI and QA), with its size defined during Discovery.<\/p>\n<p dir=\"ltr\">Question for the vendor: who is on the team, and how does replacement work?<\/p>\n<h3 dir=\"ltr\">11. Termination, transition and knowledge transfer<\/h3>\n<p dir=\"ltr\">Plan the exit before you enter. The contract should cover grounds for termination, notice period, payment proportional to accepted work, and delivery of code, documentation and credentials. Include knowledge transfer to the client or to a new vendor; templates for closing terms appear, for example, in this <a href=\"https:\/\/www.gov.br\/mcom\/pt-br\/acesso-a-informacao\/licitacoes-e-contratos-1\/arquivos\/TR062021.pdf\" target=\"_blank\" rel=\"noopener\">terms of reference from Brazil&#8217;s Ministry of Communications<\/a>.<\/p>\n<p dir=\"ltr\">Question for the vendor: how does the exit work, and how long does it take?<\/p>\n<h3 dir=\"ltr\">12. Liability, price adjustment, term and jurisdiction<\/h3>\n<p dir=\"ltr\">These clauses define what happens when something goes wrong, and they deserve careful review by legal counsel. The liability cap should not empty the vendor&#8217;s essential obligations of meaning. Also review force majeure, the adjustment index, contract term, and jurisdiction or arbitration.<\/p>\n<p dir=\"ltr\">Question for the vendor: what is the liability cap, and how was it defined?<\/p>\n<h2 dir=\"ltr\">Red flags in a software factory proposal<\/h2>\n<p dir=\"ltr\">Some signs suggest the contract may bring problems:<\/p>\n<ul dir=\"ltr\">\n<li>Scope described in a few lines, with no acceptance criteria (risk: dispute over what was delivered).<\/li>\n<li>Payment concentrated at the start (risk: losing negotiating power).<\/li>\n<li>Source code and documentation missing from the contract (risk: dependence on the vendor).<\/li>\n<li>SLA with no metric or consequence (risk: non-compliance at no cost).<\/li>\n<li>Team described generically, with no profiles (risk: replacing professionals without criteria).<\/li>\n<li>Silence on data protection and on the exit from the contract (risk: legal exposure and difficulty migrating).<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5389\" src=\"https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-scaled.avif\" alt=\"Business professionals in suits reviewing the clauses of a printed contract held on a clipboard\" width=\"2560\" height=\"1708\" srcset=\"https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-scaled.avif 2560w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-300x200.avif 300w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-1024x683.avif 1024w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-768x512.avif 768w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-1536x1025.avif 1536w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-2048x1367.avif 2048w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-150x100.avif 150w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-330x220.avif 330w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-420x280.avif 420w, https:\/\/nextage.com.br\/blog\/wp-content\/uploads\/2026\/10\/lawyer-broker-hr-manager-pointing-finger-contract-signing-agreement-with-client-employee-financial-advisor-asking-womans-signature-insurance-legal-paperwork-claim-form-1-510x340.avif 510w\" sizes=\"auto, (max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<h2 dir=\"ltr\">What changed in 2026: AI in development and what the contract should cover<\/h2>\n<p dir=\"ltr\">The use of AI in software development is now part of daily work at software factories, and the contract should address it explicitly. The relevant question today is not whether the vendor uses AI, but how it uses it and with which safeguards.<\/p>\n<p dir=\"ltr\">Consider including:<\/p>\n<ul dir=\"ltr\">\n<li>which AI tools may be used on the project;<\/li>\n<li>that client data and code are not used to train models without authorization;<\/li>\n<li>human review of all code generated with AI support;<\/li>\n<li>rules on ownership and licensing of that code (a topic still under debate, which requires legal validation);<\/li>\n<li>confidentiality of information entered into the tools.<\/li>\n<\/ul>\n<p dir=\"ltr\">At NextAge, <a href=\"https:\/\/nextage.com.br\/servicos\/nextflow-ai\/\" target=\"_blank\" rel=\"noopener\">NextFlow AI<\/a> combines specialists and AI at every stage of development; according to the company, deliveries can be up to 40% faster, with automated documentation.<\/p>\n<h2 dir=\"ltr\">Checklist: questions to ask your vendor before signing<\/h2>\n<ol dir=\"ltr\">\n<li>Does the discovery output become an annex to the contract?<\/li>\n<li>Does the price include management, QA, DevOps and deployment?<\/li>\n<li>How is a scope change estimated and approved?<\/li>\n<li>Which share of the payment is tied to each milestone?<\/li>\n<li>How is the SLA measured, reported and penalized?<\/li>\n<li>Are the repository and documentation in the client&#8217;s name from the start?<\/li>\n<li>Is there a DPA, and what is the deadline to report incidents?<\/li>\n<li>How long is the warranty, and what does it cover?<\/li>\n<li>Who is on the team, and how does replacement work?<\/li>\n<li>How does the exit from the contract and knowledge transfer work?<\/li>\n<\/ol>\n<h2 dir=\"ltr\">How NextAge structures its software factory contract<\/h2>\n<p dir=\"ltr\">NextAge organizes its software factory in five stages: Discovery, architecture and design, development in sprints, validated quality, and deployment with sustainment. The team is in-house and multidisciplinary, deliveries are biweekly, and there is a formal commitment to deadline and quality through a delivery SLA. Ownership of the code, repository and documentation belongs to the client.<\/p>\n<p dir=\"ltr\">The contract format follows the project: fixed scope, dedicated squad or sustainment and evolution, with the option to start small and scale according to results. In one of the company&#8217;s cases, a fashion and luxury marketplace operating in 12 countries eliminated 89% of its backlog and resolved 100% of critical bugs with an agile squad of senior QAs and developers.<\/p>\n<p dir=\"ltr\">If you are evaluating a software factory, <a href=\"https:\/\/nextage.com.br\/en\/services\/software-factory\/\" target=\"_blank\" rel=\"noopener\">talk to a NextAge specialist<\/a> or <a href=\"https:\/\/nextage.com.br\/servicos\/ideacao-blueprint\/\" target=\"_blank\" rel=\"noopener\">start with Discovery<\/a>.<\/p>\n<h2 dir=\"ltr\">Frequently asked questions<\/h2>\n<h3 dir=\"ltr\"><strong>What should a software factory contract include?<\/strong><\/h3>\n<p dir=\"ltr\">The contract should cover scope and acceptance criteria, pricing model, change management, payment milestones, SLA, code ownership, confidentiality, data protection (LGPD), warranty, team rules, exit terms and limitation of liability. The more measurable these items are, the lower the risk of disputes.<\/p>\n<h3 dir=\"ltr\"><strong>Who owns the source code developed by a software factory?<\/strong><\/h3>\n<p dir=\"ltr\">In general, the client. Brazil&#8217;s Software Law (<a href=\"https:\/\/www.planalto.gov.br\/ccivil_03\/leis\/l9609.htm\" target=\"_blank\" rel=\"noopener\">Law 9,609\/1998<\/a>) grants the rights to the contracting party, unless the contract states otherwise. Because the contract can provide differently, the best practice is to include an express assignment of rights, delivery of the source code and a repository in the client&#8217;s name.<\/p>\n<h3 dir=\"ltr\"><strong>Does a software factory charge by the hour or by project?<\/strong><\/h3>\n<p dir=\"ltr\">It depends on the model. Pricing can be per project (fixed scope), per monthly team fee (dedicated squad), per demand (sustainment), per hour or per function point. What matters is understanding what each format includes and who bears the risk of changes.<\/p>\n<h3 dir=\"ltr\"><strong>What is the difference between fixed scope and a dedicated squad?<\/strong><\/h3>\n<p dir=\"ltr\">With fixed scope, price and deadline are set for an approved scope, which brings predictability to projects with clear requirements. With a dedicated squad, the client hires an exclusive team on a monthly fee, with more flexibility to reprioritize in evolving products.<\/p>\n<h3 dir=\"ltr\"><strong>What is an SLA in a software factory contract?<\/strong><\/h3>\n<p dir=\"ltr\">It is the agreement that sets service levels: delivery deadlines, response and resolution times by severity, and how they are measured. A good SLA includes reporting and consequences for non-compliance.<\/p>\n<h3 dir=\"ltr\"><strong>Does a software factory have to comply with LGPD?<\/strong><\/h3>\n<p dir=\"ltr\">Yes, when it processes personal data on the client&#8217;s behalf. In that case, it acts as a data processor and must follow the controller&#8217;s instructions, as set out in <a href=\"https:\/\/www.planalto.gov.br\/ccivil_03\/_ato2015-2018\/2018\/lei\/l13709.htm\" target=\"_blank\" rel=\"noopener\">Law 13,709\/2018<\/a> (LGPD, Brazil&#8217;s data protection law). The contract should include a data processing agreement (DPA), subprocessor rules, incident notification and data disposal.<\/p>\n<h3 dir=\"ltr\"><strong>How long should the warranty be for custom-built software?<\/strong><\/h3>\n<p dir=\"ltr\">There is no single period; it is set in the contract and varies with the complexity of the system. What matters is that the contract states how long the warranty lasts, what it covers and how a defect differs from a new feature.<\/p>\n<h3 dir=\"ltr\"><strong>How can I end the contract without losing the code and documentation?<\/strong><\/h3>\n<p dir=\"ltr\">By planning the exit from the start: delivery of the source code, documentation and credentials, payment proportional to accepted work, and knowledge transfer. Keeping the repository in the client&#8217;s name from day one reduces the risk.<\/p>\n<h2 dir=\"ltr\">Conclusion<\/h2>\n<p dir=\"ltr\">A good software factory contract protects the client and gives the vendor predictability. Clear scope, acceptance criteria, a measurable SLA, code ownership and exit rules turn expectations into verifiable commitments. Before signing, use the checklist, take the text to your legal team and choose a partner that treats the contract with the same discipline it applies to delivery.<\/p>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"@id\": \"https:\/\/nextage.com.br\/blog\/en\/software-factory-contract\/#faq\",\n  \"url\": \"https:\/\/nextage.com.br\/blog\/en\/software-factory-contract\/\",\n  \"inLanguage\": \"en\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What should a software factory contract include?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"The contract should cover scope and acceptance criteria, pricing model, change management, payment milestones, SLA, code ownership, confidentiality, data protection (LGPD), warranty, team rules, exit terms and limitation of liability. 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The cost of<\/p>\n","protected":false},"author":5,"featured_media":5384,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[265],"tags":[],"class_list":["post-5387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-planning"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Software Factory Contract: 12 Points to Check Before Signing - Nextage Blog<\/title>\n<meta name=\"description\" content=\"Scope, SLA, code ownership, data protection and exit terms: the 12 points a software factory contract must cover, plus red flags to spot before you sign.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nextage.com.br\/blog\/en\/software-factory-contract\/\" \/>\n<meta property=\"og:locale\" content=\"pt_BR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Software Factory Contract: 12 Points to Check Before Signing - 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