Software Development Agreement Lawyers Adelaide: Ownership, Acceptance and Delay

Software development agreements in South Australia

Most software projects that end in a dispute had a contract that did not say who owns the code, what counts as finished, or what happens when the project runs late. Talon Legal drafts and reviews development and integration agreements for Adelaide businesses and developers, and acts when a project fails. Book a same-day free 30-minute consultation or call (08) 7094 2021.


Software development agreement key facts

IssuePosition in South Australia
Default owner of the codeThe author (Copyright Act 1968 (Cth) section 35(2)). A computer program is a literary work (section 10(1)).
Code written by an employeeOwned by the employer where written under the terms of employment under a contract of service (section 35(6)).
Code written by a contractorOwned by the contractor unless assigned. An assignment has no effect unless in writing signed by or on behalf of the assignor (section 196(3)). A signed agreement assigning future copyright vests it in the client as the code is created (section 197(1)).
AI-generated codeCopyright needs a human author. Works produced by a program with no person directing their material form were held not to be original (Telstra v Phone Directories at [118], [169]; Acohs v Ucorp at [57] to [58]).
Delay damagesA sum payable on default is unenforceable as a penalty only if out of all proportion to the interests the clause protects (Paciocco v ANZ, Kiefel J at [29]).
Guarantees for development servicesFor a consumer customer (price $100,000 or less, or services ordinarily acquired for personal use): due care and skill (Australian Consumer Law section 60) and fitness for a purpose made known (section 61).
Contracting outVoid for the guarantees (section 64). For services not ordinarily acquired for personal use, liability can be limited to resupply or its cost unless that is not fair or reasonable (section 64A).
Promises about deliveryA representation about a future matter without reasonable grounds is taken to be misleading (section 4(1)); loss from misleading conduct is recoverable as damages (sections 18 and 236).
Exclusion and limitation clausesConstrued by their natural and ordinary meaning in light of the whole contract (Darlington Futures v Delco at [16]).
Time limitsSix years for contract claims (Limitation of Actions Act 1936 (SA) section 35) and ACL damages claims (section 236(2)).
Where claims are heardThe Magistrates Court hears money claims up to $100,000 (Magistrates Court Act 1991 (SA) section 8); larger claims go to the higher courts.
First stepSame-day free 30-minute consultation. Call (08) 7094 2021.

Need a software development agreement lawyer in Adelaide?

Our software development agreement lawyers in Adelaide act for the businesses that commission software and for the developers who build it. The questions are the same on both sides: who owns what is built, how the work is accepted, what happens when it is late or does not work, and who pays when the project fails. The Copyright Act 1968 (Cth) decides ownership unless the contract deals with it in writing, and the Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010 (Cth) overrides some terms. This page states the law current to 24 October 2026.

This guide is part of our information technology law practice. Related guides cover software licences and SaaS agreements, IT services and support agreements, data protection and privacy and technology IP and IT disputes.

If the software is an app for the public, see our guide to app terms and conditions.

If AI tools write any of the code, see our guide to AI-generated content and copyright. For AI models and the data used to train them, see AI contracts and data licensing.

Free Consultation. Send us the proposal or the contract before the project starts. Book a same-day free 30-minute consultation or call (08) 7094 2021.

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Muhammad Zubair
29 October 2026
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Talon Legal is the best law firm in the Adelaide. Dan was able to resolve my case before time, achieving a favourable outcome. I would highly recommend Talon Legal to anyone seeking professional legal assistance. Talon Legal develops effective legal strategies to achieve the best possible outcomes.
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Jessie W
26 October 2026
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I had a great experience dealing with Danial at Talon Legal. From our initial conversation, he was professional, approachable and genuinely interested in understanding our business and its needs. He took the time to listen, explain things clearly and offer thoughtful, practical advice. I particularly appreciated his patience, honesty and the time he dedicated to our discussions. Although we haven’t engaged the firm for further work at this stage, the experience has left a very positive impression. I would certainly feel confident reaching out to Danial again for any future legal matters. Thank you, Danial, for your time and professionalism. It’s been a pleasure dealing with you!
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Angela Carter
12 October 2026
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Was a scary experience, uut thenks to your expertise, i got the best possible outcome.
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24 September 2026
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Exceeds expectations Dan went above and beyond our expectations to deliver professional, highly detailed and very well thought out information. He included extra documents just to help us out and this was much appreciated.
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24 September 2026
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Dan went above and beyond our expectations to deliver professional, highly detailed and very well thought out information. He included extra documents just to help us out and this was much appreciated.
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Samin Adit
1 September 2026
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Dan was extremely helpful and he was very patient and through and took time explaining me all the process and next step. And he carried a great sense of humor while he spoke and honestly that made it so easy to understand when I was already stressed out.
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Calvin Munatswa
24 August 2026
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I’m extremely happy with the service I received from Dan. He was professional, responsive, knowledgeable and genuinely committed to achieving the best possible outcome. I really appreciate the hard work, guidance and support throughout the process. Thank you for doing such a great job. I would highly recommend your services to anyone looking for a reliable and dedicated lawyer.
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Marcelle Ayoubi
4 August 2026
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Highly recommend Dan! He was prompt, reliable and efficient, with excellent communication throughout the entire process. His knowledge and professionalism gave me confidence, and he achieved a good outcome. Dan took a lot of the stress out of what could have been an overwhelming experience. Thank you, Dan, for all your support and assistance!
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Neb Trivic
24 July 2026
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Very knowledgable, helpfull and got the best outcome hoped for.
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Anton Simdyankin
21 July 2026
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Timely quote, responses and overall great experience. 100% Recommend
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Tania Stubberfield
16 July 2026
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I highly recommend Talon Legal and especially Daniel Esmaili. During our initial conversation for a driving offence, Dan was incredibly honest and told me that I didn't really need legal representation. He was completely down-to-earth and non-judgmental, reassuring me that people make poor choices sometimes. I felt more at ease and I chose to hire him anyway to avoid the anxiety of a court appearance, and it was the best decision I could have made. He took care of everything from start to finish, appearing in court on my behalf so I didn't have to attend at all. He explained everything clearly without using confusing legal jargon. He was also incredibly thoughtful and personal, asking how my birthday trip away went with family. Thanks to Dan, we got a fantastic outcome with a significantly reduced suspension time and a minimal fine. Dan even went above and beyond by telling me to contact him before I start driving again to double-check that my suspension is fully completed and my licence paperwork is processed correctly. On top of the amazing result, the fees were surprisingly affordable without compromising on performance and integrity. If you want an empathetic, honest, affordable and highly capable lawyer, then Dan's your man. Thankyou again Daniel Esmaili at Talon Legal.
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Bill P
30 June 2026
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We recently engaged Dan Esmaili from Talon Legal to assist our family with a motor vehicle road rule expiation and related court matter. From the very beginning, Dan was professional, clear, and extremely supportive. He took the time to explain the process in a way we could understand, kept us informed throughout, and handled the matter with care and confidence. Most importantly, Dan achieved a successful outcome for our family, which we are very grateful for. We sincerely appreciate his guidance, responsiveness, and dedication. We would highly recommend Dan Esmaili and Talon Legal to anyone needing strong legal support and professional representation.
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Sara Gleeson
16 June 2026
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I cannot recommend Dan Esmaili (Talon Legal) highly enough. I was extremely worried about the impact a legal problem could have on my future. From the beginning, he was professional, knowledgeable, and supportive. He took the time to explain the legal process, answered all of my questions, and worked tirelessly on my case. Thanks to his expertise and advocacy, I received a result without a conviction being recorded. This outcome has made an enormous difference to my life, and I am incredibly grateful for his dedication and hard work. If you need a lawyer who genuinely cares about their clients and achieves outstanding results, I would not hesitate to recommend Dan.
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Matthew Greenwood
16 June 2026
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Thanks Dan for your legal help . You got the best possible outcome , thanks again . Matt
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Caleb Sweeting
15 June 2026
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Danial Esmaili is an excellent lawyer whose clear communication style makes navigating legal matters much easier. Professional, approachable and knowledgeable, he takes the time to explain things clearly and provides confidence throughout the process.
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Yousef Al-Yasiri
11 June 2026
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Daniel and the team at Talon Legal were truthful, helpful, and left me feeling confident and how they handled my matter. Daniel understood my situation, left me assured, was realistic with me, provided me with the advice or course of action that best suits my sitiation. If I could choose again, I would choose Daniel and the team at Talon Legal with my eyes closed.
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Matthew Morgan
11 June 2026
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You’d be hard pressed to find someone more knowledgeable than Dan, a lovely guy too.
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Jacob Marcer
10 June 2026
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Daniel at talon legal was by far the best lawyer I’ve had to deal with he was extremely helpful with explaining his processes and making me feel very comfortable Also achieving a great result on my case Couldn’t recommend Daniel more if I could give more stars I would Thanks again daniel
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Faros Omidvour
10 June 2026
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Talon Legal is an excellent law firm that I recpmmend without hesitation to anyone who needs responsive and considerate advice and representation.
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Egor Eremeev
8 June 2026
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I cannot recommend Talon Legal highly enough. From the very beginning, Daniel demonstrated exceptional professionalism, legal expertise, and genuine care for my situation. Daniel took the time to understand my circumstances, explained every step of the process in clear and practical terms, and was always available to answer questions. His attention to detail, strategic thinking, and calm approach gave me confidence throughout the entire matter. What stood out most was Daniel’s commitment to achieving the best outcome while making the process as smooth and stress-free as possible. It is rare to find a lawyer who combines technical expertise with such excellent client service. Thank you, Daniel, and the Talon Legal team for your outstanding support. I would highly recommend Talon Legal to anyone seeking professional, reliable, and results-driven legal representation.
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Kaedehara Kazuha
4 June 2026
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We recently engaged Talon Legal to assist with drafting reseller agreements for our business, and the experience exceeded expectations. Dan took the time to understand our requirements, commercial objectives, and the practical realities of our industry before providing clear, strategic advice and a tailored solution. His attention to detail, commercial awareness, and ability to identify potential risks resulted in a comprehensive agreement that gave us confidence moving forward. What stood out most was the firm's proactive and innovative approach. Rather than relying on a standard template, Dan offered practical suggestions and considered scenarios we hadn't even thought of, helping create a robust and well-structured agreement. Talon Legal is a progressive firm with a fresh perspective and a strong understanding of commercial law. Professional, responsive, and easy to work with throughout the process. Highly recommended.
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Bec Chapman
22 May 2026
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Talon Legal were exemplary in their service. Dan was concise, thorough and true to the plan. For a small NGO seeking legal advice I can highly recommend :)
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Hussar1522
29 October 2025
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One of the best lawyers in Adelaide My life was being ruined because of a court case that was not true, then it became worse when I have driving charge for driving disqualification and careless driving with an accident that I did not cause. This affect my business and the lawyers protected my business and my life and reputation. They make the charges go away and I get no conviction or criminal record, and do my business contracts terms and conditions perfectly. If you want lawyers that can help you many ways I suggest you go to Talon Legal. I think one of the best law firms in Adelaide for business and criminal and traffic.
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Oldpicker64
17 August 2025
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Saved me from jail for disqualified driving I can’t thank talon legal enough for what they did to help when I had magistrates court in port adelaide and Elizabeth, lost my licence because I was sick before and had to drive in emergency to help family but police didn’t care. Talon legal helped me with disqualified driving charges in court and saved me from going back to jail this was the one time I liked working with a lawyer. Recommend talon legal for any legal problem.
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J420
2 August 2025
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Best criminal lawyers! I hired talon legal to fight a criminal case for me and they got the charge dropped. Daniel was amazing in handling my case. He actually cared about my case and me as a person. I felt really supported and I am glad I got talon legal for my court case. Best criminal lawyers in Adelaide that I spoke to.
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James Aveno
2 August 2025
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Excellent business and startup lawyers Talon Legal was incredible to work with and delivered outstanding value for money and expertise. I went into my initial meeting expecting to receive some basic information instead I was blown away by their depth of knowledge across multiple domains. I was in the process of founding a startup business in Adelaide, and explained my goal of expanding interstate and eventually internationally. The lawyer I spoke to was across contracts, terms and conditions, intellectual property protection and licensing, brand consolidation, risk minimisation and business structures and compliant advertising. I was really impressed however by their use of ingenious tools that aren’t really the domain of lawyers at least from what I’ve seen before. Daniel in particular was a bit of wizard. He walked me through how something called OSINT could be used for brand consolidation and was very transparent about the use of some of their document automation tools, and this reflected in the speed and value they provided. I really felt like I finally am able to work with a law firm that can help me with every stage of my business and was genuinely curious about what what I wanted to achieve. Even after the services were provided, Talon Legal was proactive in checking in with me to ensure my business was prospering. I have sent my friends and other entrepreneurs to them and every single one was very happy.
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James A
2 August 2025
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Excellent commercial and business lawyers! Talon Legal was incredible to work with and delivered outstanding value for money and expertise. I went into my initial meeting expecting to receive some basic information instead I was blown away by their depth of knowledge across multiple domains. I was in the process of founding a startup business in Adelaide, and explained my goal of expanding interstate and eventually internationally. The lawyer I spoke to was across contracts, terms and conditions, intellectual property protection and licensing, brand consolidation, risk minimisation and business structures and compliant advertising. I was really impressed however by their use of ingenious tools that aren’t really the domain of lawyers at least from what I’ve seen before. Daniel in particular was a bit of wizard. He walked me through how something called OSINT could be used for brand consolidation and was very transparent about the use of some of their document automation tools, and this reflected in the speed and value they provided. I really felt like I finally am able to work with a law firm that can help me with every stage of my business and was genuinely curious about what what I wanted to achieve. Even after the services were provided, Talon Legal was proactive in checking in with me to ensure my business was prospering. I have sent my friends and other entrepreneurs to them and every single one was very happy. Approximate cost: $4500
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DP123
12 July 2025
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Clear advice in a very stressful time I was in a very stressful situation and Talon Legal fixed my problem - now my stress is gone! Very professional, excellent communication, accessible and fast. Thank you for everything.
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Slavi77
12 July 2025
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They won my hardship appeal Was about to lose my licence and Talon Legal got it back. Made a promise and kept it. This is what a lawyer should be like. Helped me with my driving disqualification and other driving offences. Very prepared and explaining things very good so I could understand them easily.
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Emir
2 July 2025
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Very good criminal lawyer They were honest and did what they said they would do and told me what to expect it was like following a map and I felt safe because I know what to expect very happy with the experience Talon. If I need lawyer again I will come back.
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Samsun
28 June 2025
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Got the best result for me Easy to deal with and spoke to me in normal English, explained everything really good to me, didn’t go over agreed budget to help with my case and communicated all the time with me, never kept me waiting and very responsive to my questions, had direct access to my lawyer anytime I needed. Got very good result for my case for drinking and driving, disqualified driving, demerit points and provisional driver licence condition
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Rogue33
26 June 2025
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Very good experience best money ever spent on a lawyer Professional, friendly and fixed fee service. I had some charges in court in Adelaide and Talon Legal completely picked apart the case against me. Charges were removed and I got my licence back too. Cant recommend them strongly enough. Really easy to work with and friendly. Thanks for wining my licence appeal and getting the drink driving charges removed.
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Riggo7
24 June 2025
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Saved my drivers license Can’t thank the team enough at Talon Legal for helping me keep my drivers license. They were very knowledgeable and took the time to explain everything to me every step of the way. If it wasn’t for their excellent representation in court I would have lost my license. They left no stone unturned. Highly recommend.
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Karen R.
24 June 2025
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Best lawyers for traffic offences in adelaide Really appreciate Talon Legal’s help to keep my license, thank you so much to the team. Professional, responsive and compassionate service from everyone at the office and excellent outcome. Would definitely recommend. Approximate cost: $2800
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Les A.
23 June 2025
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Excellent traffic lawyers I owe them my life and job words are not enough to say how thankful i am for the help they gave me when i was going to lose the driver licence in magistrates court because of drink driving and drug driving. Approximate cost: $3000
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Jordan
22 June 2025
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Best Lawyers! Absolutely first-class service from Talon Legal. I had a complicated traffic matter and wasn’t sure where to turn. From the first phone call, they were professional, understanding, and gave me clear advice without the legal jargon. On the day of court, they were calm and prepared and the result spoke for itself. I’m so grateful for their help and wouldn’t hesitate to recommend them to anyone needing help with a traffic offence.
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S A.
17 June 2025
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Brilliant traffic lawyers in adelaide Helped me get my licence back in the magistrates court after I applied for a licence appeal because I breached my provisional conditions. Made it straightforward and helped me stay calm. Treated me like a normal person and was very compassionate. You saved my job legends Approximate cost: $1800
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SA
16 June 2025
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Successful drivers licence appeal! Made the process really easy for me to understand and helped me appeal my licence in the magistrates after it was disqualified for breaching a licence condition. Thank you legends, I would have been stuffed if I lost my licence without you guns!
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TK
5 April 2025
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Best traffic lawyers in Adelaide I came across talon legal when I was looking for a law firm in Adelaide to represent me for traffic offences while visiting from overseas. They were very professional, fast, friendly and down to earth. Dan handled my mater and got me a very good outcome at a fixed cost.

Who owns code written for a business?

The author, unless the Copyright Act or a written assignment says otherwise. A computer program is a literary work (section 10(1)), and the author of a literary work owns the copyright (section 35(2)).

Employment changes the answer. Where the code is written by an employee in pursuance of the terms of their employment under a contract of service, the employer owns it (section 35(6)). The test is the employment relationship, so code written by an employee outside the scope of their duties, or by a contractor, is not caught.

A contractor keeps the copyright unless it is assigned. An assignment, total or partial, has no effect unless it is in writing signed by or on behalf of the assignor (section 196(3)). Paying for the work does not transfer the copyright. The cleaner course is an assignment of future copyright in the development agreement itself: where an agreement signed by the prospective owner purports to assign the future copyright, it vests in the client as the code comes into existence (section 197(1)).

Ownership is not always what the client needs. A developer that reuses its own libraries and tools across clients will not assign them, and should not have to. The usual structure assigns the bespoke code to the client and licenses the developer’s pre-existing material to it, broadly enough to use, modify and maintain the system without the developer. What matters is that the agreement says which is which.


Does AI-generated code have copyright?

Not necessarily, and the answer depends on how much a person directed what was produced. Australian copyright needs a human author.

In Telstra Corporation Ltd v Phone Directories Company Pty Ltd [2010] FCAFC 149, directories produced largely by an automated process were not original works. Perram J said the person in control of a program will ordinarily be the author of what it generates, so long as that person directs or fashions its material form. Where the operator does not control the form the program produces, there is not enough independent intellectual effort to make that person an author ([118]). Yates J said originality requires that the work originate from an author or authors, which a work dominated by a computer-generated process does not ([169]).

In Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16, source code generated by a software system from material users entered did not emanate from authors and was not an original work ([57] to [58]).

Neither case concerned AI coding tools. They state the test, and it is a question of fact and degree ([169]). Code that a developer writes with an assistant suggesting lines is in a different position from code generated end to end from a prompt. A development agreement should therefore require the developer to disclose its use of AI tools, warrant that the deliverables are original work or properly licensed, and deal with what happens to any part that turns out not to be protected.


What should the agreement say about scope and acceptance?

Scope and acceptance cause more development disputes than anything else. A specification that describes outcomes in general terms leaves both sides arguing about whether the system was finished.

The agreement should fix the specification, or a process for settling it, and an acceptance test that is objective: who tests, against what criteria, in what time, and what happens to defects found. It should say whether acceptance is deemed if the client does not respond, and whether going live counts as acceptance. Change requests need a written process that records the effect on price and timing, because most delay claims turn on which changes were agreed.

Representations made before signing count too. A statement about a future matter, such as a delivery date or a feature, is taken to be misleading if the person making it did not have reasonable grounds for it (ACL section 4(1)). Misleading conduct in trade or commerce is prohibited (section 18), and loss caused by it is recoverable as damages (section 236). Proposals and sales emails should be read with that in mind before they are sent.


How should delay be dealt with?

With a timetable that names the dates that matter, and a clear consequence when they are missed. Liquidated damages, a set amount per day or week of delay, are common in larger projects.

A liquidated damages clause is enforceable unless it is a penalty. In Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28, Kiefel J, with whom French CJ agreed, put the question as whether a provision for the payment of a sum on default is out of all proportion to the interests of the party which it is the purpose of the provision to protect, and said that interest may be of a business or financial nature ([29]). A sum that reflects the client’s real exposure to delay is unlikely to be out of all proportion. A sum chosen to frighten the developer may be.

The agreement should also say what delay the developer is not responsible for, such as delay caused by the client’s late instructions or data, and whether liquidated damages are the client’s only remedy for delay. If they are, a cap that is too low leaves the client without a real remedy.


What warranties and guarantees apply?

The contract’s warranties, plus the consumer guarantees where the client is a consumer. For services supplied to a consumer, the guarantees are that the services will be rendered with due care and skill (ACL section 60) and will be reasonably fit for any purpose the consumer makes known (section 61). Where the result is software supplied as goods, the guarantee of acceptable quality can apply as well (sections 2 and 54).

Many development projects are outside those guarantees. A client is a consumer only if the price was $100,000 or less, or the services are of a kind ordinarily acquired for personal, domestic or household use (section 3 and regulation 77A of the Competition and Consumer Regulations 2010). A larger project depends on the contract’s own warranties: that the software will conform to the specification for a defined period, and that defects reported in that period will be fixed.

Where the guarantees do apply, they cannot be excluded (section 64). For services not of a kind ordinarily acquired for personal use, the developer can limit its liability to supplying the services again or the cost of doing so, unless the client shows that relying on the limit is not fair or reasonable (section 64A(2) and (3)).


What about open source and third party code?

Almost every modern system includes code the developer did not write. Each component comes with its own licence, and using it outside the licence infringes the copyright in it (Copyright Act section 36(1)). Some open source licences impose conditions that matter commercially, such as obligations to publish source code when software is distributed.

The agreement should require the developer to list the third party components, confirm their licences permit the intended use, and keep the client informed of changes. The client then knows what it owns, what it licenses from others, and what it would have to replace.


What happens when a development project fails?

The contract decides the first steps. Many development agreements require a dispute notice, escalation between senior people, or mediation before court. Following the clause matters. In AIBI Holdings Pty Ltd v Virtual Technology Services Pty Ltd [2022] FCA 696, a customer that withheld disputed payments without activating the contract’s dispute process remained liable to pay, and the supplier was entitled to suspend services ([137] to [140]).

Liability caps and exclusions are read for what they say. A clause is construed by its natural and ordinary meaning, read in light of the contract as a whole, and against the party relying on it where appropriate in case of ambiguity (Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82 at [16]). A clearly worded cap will often decide how much a failed project is worth.

Time limits are six years from when the cause of action accrued, for contract claims (Limitation of Actions Act 1936 (SA) section 35) and for ACL damages claims (section 236(2)). The Magistrates Court hears money claims up to $100,000 (Magistrates Court Act 1991 (SA) section 8). Our technology IP and IT disputes guide covers the claims in more detail.


How similar matters tend to play out

Three illustrations of how the law on this page combines on ordinary facts. They are not predictions. Outcome depends on the contract, the evidence and the court.

Lower range. A start-up engages a freelance developer under an email exchange and a quote. The app is built and paid for. When an investor asks for evidence of IP ownership, there is none, because an assignment needs writing signed by the assignor (section 196(3)). A short deed of assignment, signed before the developer moves on, fixes it.

Middle range. A business commissions a system for $90,000 with a vague specification. It goes live late and does not do several things the business expected. At that price the business is a consumer (section 3), so the services must be fit for any purpose it made known (section 61). The outcome turns on what purposes were made known, which change requests were agreed, and what the acceptance clause says.

Upper range. An integration project worth several hundred thousand dollars fails. The client claims the developer promised a delivery date it had no reasonable grounds to give (section 4(1)). The developer relies on a cap of 12 months’ fees and the client’s late delivery of data. The cap is read for what it says (Darlington at [16]), and the client’s damages claim for misleading conduct under section 236 has to be assessed alongside it.


How we act on software development agreements

We act for clients and for developers. For a client, the aim is ownership of what it pays for, an acceptance process that protects it, and a remedy for delay. For a developer, it is a scope it can deliver, protection for its pre-existing tools, and a cap on liability that matches the fee.

StageWhat happensWhat we do
ProposalThe developer's proposal or the client's brief is settled.Check that scope, price and timing are capable of being turned into contract terms.
DraftingThe development agreement is prepared.Draft the ownership, licence, specification, acceptance, change control, delay, warranty and liability clauses.
DeliveryThe project runs, with change requests and milestones.Advise on variations, extensions of time and acceptance notices as they arise.
AcceptanceTesting, defects and sign-off.Advise on whether the acceptance criteria are met and on the defects process.
DisputeThe project is late, fails or is terminated.Follow the dispute clause, assess the claims and the cap, and protect the limitation period.

We cannot promise an outcome, and no lawyer can. We can make sure the agreement answers the questions that cause disputes before the project starts.

Every hour matters. Book a same-day free 30-minute consultation, or call (08) 7094 2021 now.


Software development case law

None of the decisions below concerned an AI coding tool, and only AIBI concerned an IT services contract. The others deal with the ownership, penalty and limitation questions that every development agreement has to deal with.

CaseCourtPrinciplePinpoint
Telstra Corporation Ltd v Phone Directories Company Pty Ltd [2010] FCAFC 149Full Federal CourtComputer-generated works need a human author[118], [169]
Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16Full Federal CourtProgram-generated source code not an original work[57], [58]
Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28High CourtWhen a sum payable on default is a penalty[29], [68], [69]
Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82High CourtConstruction of exclusion and limitation clauses[16], [19]
AIBI Holdings Pty Ltd v Virtual Technology Services Pty Ltd [2022] FCA 696Federal CourtDisputed payments, dispute clauses and suspension[137] to [140]

Case notes

Telstra Corporation Ltd v Phone Directories Company Pty Ltd [2010] FCAFC 149

Copyright did not subsist in directories produced largely by automated processes, and the appeal was dismissed. Perram J said an operator who does not control the material form a program produces is not its author ([118]). Yates J said the computer-generated process was of such overwhelming significance that the works did not originate from authors ([169]).

Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16

The claimed works were the source code of documents generated by a software system ([50]). The Full Court agreed with the primary judge that the source code was created by the operation of the program, did not emanate from authors and was not an original work ([57] to [58]).

Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28

Kiefel J, with French CJ agreeing, asked whether a sum payable on default is out of all proportion to the interests of the party the provision protects, which may be business or financial interests ([29]). The bank’s late payment fees were not shown to be penalties, and the appeal was dismissed with costs ([68] to [69]).

Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82

An appeal from South Australia. Exclusion and limitation clauses are construed by their natural and ordinary meaning in light of the whole contract, and against the party relying on them where appropriate in case of ambiguity ([16]). A $100 limit applied to each of the client’s unauthorised contracts ([19]).

AIBI Holdings Pty Ltd v Virtual Technology Services Pty Ltd [2022] FCA 696

A customer withheld payment of disputed charges without activating the dispute resolution mechanism, so the invoices remained payable ([137] to [139]). The supplier did not breach the contract by suspending its helpdesk services ([140]).


Frequently asked questions

Who owns the code if I pay a developer to write it?

The developer, unless copyright is assigned in writing signed by or on behalf of the developer (Copyright Act sections 35(2) and 196(3)). An agreement signed before the work starts can assign the future copyright so it vests in the client as the code is created (section 197(1)).

Does an employer own code written by its employees?

Yes, where the code is written in pursuance of the terms of employment under a contract of service (section 35(6)). Code written by a contractor, or by an employee outside the scope of the employment, is not caught.

Should a development agreement mention AI coding tools?

Yes. It should require the developer to disclose their use, warrant that the deliverables are original work or properly licensed, and deal with any part that is not protected by copyright.

Can a developer keep its own tools and libraries?

Yes, if the agreement says so. The usual structure assigns the bespoke code to the client and licenses the developer’s pre-existing material, broadly enough for the client to use, modify and maintain the system.

Are liquidated damages for delay enforceable?

Usually, if the amount is not out of all proportion to the interests the clause protects (Paciocco v ANZ, Kiefel J at [29]). A sum that reflects the client’s real exposure to delay will generally survive.

Do the consumer guarantees apply to software development?

Only if the client is a consumer: a price of $100,000 or less, or services of a kind ordinarily acquired for personal use (ACL section 3 and regulation 77A). The services must then be rendered with due care and skill and be fit for any purpose made known (sections 60 and 61).

Can a developer exclude all liability?

Not for the consumer guarantees where they apply (section 64). For other liability, a clearly worded exclusion or cap is construed by its natural and ordinary meaning (Darlington at [16]), and for business-type services liability can be limited to resupply or its cost (section 64A).

What if the developer promised a delivery date it could not meet?

A representation about a future matter made without reasonable grounds is taken to be misleading (ACL section 4(1)). Loss caused by misleading conduct can be recovered as damages within six years (sections 18, 236(1) and 236(2)).

How long do I have to sue over a failed project?

Generally six years from when the cause of action accrued, for contract claims (Limitation of Actions Act 1936 (SA) section 35) and ACL damages claims (section 236(2)). The contract may require dispute steps first.

Do I need a software development agreement lawyer?

For a project the business depends on, yes. A software development agreement lawyer can settle ownership, acceptance and delay before work starts, which is far cheaper than arguing about them after it fails. A free 30-minute consultation will tell you where you stand.


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