1.0 Introduction
Software increasingly underpins nearly every aspect of modern life. Our smartphones, cars, computers, hospital systems, food delivery applications, telecommunications systems, and even traffic lights will not operate without software. It underpins the existence of modern society. Fifteen years ago, dozens of these essential applications were non-existent. There were no ride-hailing apps, Microsoft Teams, Instagram, Snapchat or even the mighty Amazon Web Services. Today, software is no longer just a tool; it has become a “human-dependent digital system”. This rapid development, however, raises risks associated with the development, delivery, and use of software. According to the Chaos report published on THESTORY.is (2024), empirical studies suggest that by 2020, only 31% of software projects were deemed to have been successful, while 50% experienced difficulties, 19% failed entirely. Small projects nonetheless performed far better with a success rate of 90%, while large projects had a less than 10% success rate. Simply put, the bigger the project, the higher the likelihood of failure.
Despite these concerning statistics, software failures continue to be attributed to technical and operational inefficiencies. Perhaps an essential step that has been overlooked all this time is limiting the lawyer’s role solely to drafting and enforcing contracts. Corporate lawyers are not just enforcers of rights and boardroom minute-takers; they serve as gatekeepers to capital preservation and partners in improving the bottom line. As with any essential system of modern-day existence, the lawyer’s role is indispensable, and the Software Development Lifecycle (SDLC) is no exception. Lawyers must understand the SDLC to provide timely advice that anticipates risks and structures enforceable obligations to protect their clients’ interests. This is aimed at preventing costly disputes before they arise, rather than intervening only when contracts are breached.
This article highlights the reasons lawyers matter beyond end-stage contracts. It describes the role of a proactive lawyer in the SDLC, together with detailing the safeguards to be implemented at each stage, together with their legal underpinnings. For non-lawyers such as developers, founders, and business executives, it provides insight into decision-making and the role of lawyers in the SDLC.
2.0 Overview of the SDLC and what Lawyers must Know
The software development lifecycle can practically be described as train of activities through which a software is conceived, designed, built, tested, implemented and maintained.
The early approach to software development followed a code-to-fix approach where software programmes were quickly built and deployed with key fixes made after deployment. Essentially, the software developer writes the code based on the requirements and design, test, and maintain the product. Over time, a more structured approach gained dominance and is widely referred to as the Waterfall approach. This process is best described as a linear method in which each block or step is completed before the next can be started. The linear progression continues until the software is fully built and subsequently deployed. Once a phase is completed, moving backwards is difficult and costly. As software became more complex and demanding, another approach, the Spiral method, emerged to address the shortcomings of the Waterfall method by refining how risks are identified and mitigated at each level. Subsequently, a more favoured approach known as Agile gained prominence which, like Spiral, rejects the linear and incorporates an incremental short cyclical approach where feedback is gathered regularly to adjust scope and priorities. Agile remains the most proffered approach as empirical data suggests that 40% of Agile projects tend to succeed as against 15% for Waterfall. However, in rigidly phased projects requiring lengthy bureaucratic approvals and strict regulatory compliance, the Waterfall or a hybrid approach may be beneficial.
2.1 Key SDLC Stages and their Legal Application
The SDLC lifecycle is commonly divided into: (1) the Ideation or the requirement gathering stage, (2) the Planning or Design Stage, (3) the Development stage, (4) the Testing Stage, (5) the Deployment stage, and (6) the Maintenance stage. Each phase creates its own legally relevant outcome, and it is the duty of lawyers to identify the relevant issues and balance them against risk management and operational efficiency to avoid appearing to be business killers or obstructing the process.
2.2 Ideation/Requirement Gathering
This initial stage is where all ideas are put out. Often, the employer states what he requires and the exact problem to be solved. A clearly defined scope is at the heart of this phase as ambiguity at the outset almost inevitably leads to disputes as the project progresses. Scope should be articulated through detailed specifications that describe what the software is intended to achieve from a business and user perspective, and through technical specifications that outline how the system will be built, including platforms, programming languages, integrations, and performance standards. A lawyer’s key role on clarity of the scope is to avoid a situation where the project requirements expand beyond the originally agreed scope causing delays and cost overruns in what is widely known as scope creep. There should also be no room for ambiguity, as different interpretations of key outcomes have been a major cause of software development litigation, costing parties millions. In Apacheta Corporation vs. Lincare (2017) a motion for summary judgment was dismissed because the Court found that it was not clear whether certain software components (called the contested element) were included in what the software developer was supposed to deliver. In other words, the contract or Statement of Work (SOW) did not indicate if the elements were part of the deliverables.
Exclusion clauses are also a vital component of the contract, particularly for the developer. This clearly states what falls outside the developer’s obligations and clarifies that additional features, integrations, or ongoing services are not included when they have not been agreed upon. By clearly defining both inclusions and exclusions, contracts reduce uncertainty and minimize the risk of disagreement as the project evolves
2.3 Planning and Design Stage
Once the direction is agreed, attention shifts to structural decisions. What tools, materials and systems will support the final product? This stage determines the programming languages, frameworks, databases, external Application Programming Interface (API) as well as third partiy dependencies. The lawyer, at this point sets the tone for compliance and performance. Given all the other interdependencies, the contract with third parties must be reviewed to determine their level of involvement and liabilities. Seldom are modern software built from scratch; they rely on 3rd-party frameworks and licenses. A lawyer must ensure that the licences for each dependency are up to date, aligned with the licensor’s use parameters, and will remain valid throughout the product lifecycle. It is only upon the satisfaction of that that the lawyer incorporates warranties, guarantees and the threshold that satisfies performance for each stakeholder. It is such an essential stage because it defines the blueprint upon which the contractual obligations are measured. It also informs the parties what their obligations are and the consequences when these metrics are not met. Oftentimes, software developers will hide behind vague limitation clauses unless they are expressly agreed. Limits of liabilities must be clearly stated and reasonable so as not to unduly burden a party when it is sought to be enforced in court. However, not all liabilities can be limited; breaches of general nondisclosure clauses, breaches of indemnity provisions, and losses caused by gross negligence or wilful misconduct may not be capped.
2.4 Coding/Development stage
With the structure planned, the focus turns to assembling the components that will form the complete system. Developers write and integrate code in accordance with the design specifications outlined in 2.3 above. Software developers must adhere to encryption standards. Lawyers must insist on agreed-upon protocols and ensure they are tested (e.g., AES-256 for data at rest and TLS 1.3 for data in transit). There should be adherence to security protocols as agreed, with key elements including encryption built into the software and compliance with ISO/IEC 27001 for information security.
Intellectual property (I.P) protection becomes particularly significant once code is being written. Under Ghana’s copyright regime, source code qualifies as a protected literary work, and ownership does not automatically transfer without express contractual provision. Lawyers, therefore, play a crucial role in ensuring compliance with intellectual property clauses, clarifying ownership of works-in-progress, and addressing joint authorship issues when multiple developers contribute to the same codebase. In certain instances, the contract employer may request ownership of the IP rights. Such an agreement should be in place to transfer such rights. Such outright assignment provides maximum control by the client but may be resisted by developers. Alternatively, a perpetual, irrevocable, exclusive licence may achieve similar commercial outcomes.
The developing stage is also notorious for delays within the SDLC. It is imperative for the lawyer to draft clauses addressing liability for delays and the parties’ awareness.
2.5 Testing Stage
At the Testing Stage, the software is essentially tested against the requirements agreed by the parties. Vulnerabilities and bugs are identified and fixed. Testing for compliance also plays an important role at the testing stage. For example, in relation to data protection, the contract should clearly state how personal data is used. Developers are not allowed to use real-life personal data unless it is anonymised.
A critical component at this stage is the User Acceptance Test (UAT). Once this is signed, it significantly reduces the developer’s liability; therefore, the client should be assured that the developer has fulfilled their obligations and that the software conforms to the agreed scope and outcome. In most SDLC, this is where the bulk of the payment is made to the developer. Below is a practical UAT clause at the end of the Testing phase.
User Acceptance Testing (UAT)
Upon delivery of the Software, the Client shall conduct User Acceptance Testing within a period of [10–30] business days (“UAT Period”). The Software shall be deemed accepted if it materially conforms to the agreed functional specifications and acceptance criteria.
During the UAT Period, the Client shall notify the Developer in writing of any defects or non-conformities. The Developer shall remedy all material defects within a reasonable time and resubmit the Software for re-testing.
Acceptance shall occur upon written sign-off by the Client or, where no material defects are reported within the UAT Period, upon deemed acceptance. Upon acceptance, the Software shall be considered delivered for the purposes of payment, risk transfer, and limitation of liability
2.6 Deployment
Once approved, the software is deployed into operation and formally handed over for use. This stage typically involves deploying the system to production servers or cloud environments such as AWS or Microsoft Azure. At this point, risk, liability, and, depending on the contractual terms, ownership may transfer from the developer to the client. Where ownership is transferred, the lawyer’s role is to ensure that intellectual property rights are validly assigned and that all required transition activities, such as training, documentation, and acceptance sign-offs, are completed. Where the software is provided under a licence, lawyers are responsible for drafting Terms of Service and End-User Licence Agreements (EULAs) to regulate user rights, restrictions, and liability. In highly regulated industries such as Financial Services and cross-border industries such as telecommunications, regulatory compliance and governing law clauses become especially critical to manage enforcement.
To encourage performance during the deployment phase, lawyers often include clauses that require developers to deliver or provide compensation, typically pre-agreed, when service-level agreements are breached. Prominent amongst them are “service credits, a noncash remedy mechanism entitling the client to a reduction in fees where the system experiences excessive downtime or performance failures. They operate as a commercially acceptable alternative to litigation and preserve the working relationship.
2.7 Maintenance and Ongoing Evolution
After release, attention turns to long-term sustainability. Software must be updated to fix vulnerabilities, comply with new regulations and remain competitive. Legal mechanisms at this stage include Service Level Agreements (SLAs) to guarantee performance and uptime, retainer contracts to ensure ongoing developer support and data breach response protocols. Lawyers must recognise that this phase is not a one-off exercise but a continuous process. Each new regulatory development must be assessed against existing systems and contractual arrangements to ensure continued compliance. A forward-thinking lawyer will also monitor emerging best practices and periodically align current agreements with them. This proactive approach distinguishes a traditional end-stage contract lawyer from a strategic legal risk and control partner.
3.0 Legal Governance of Software Development Agreements: Legal Elements Beyond the SDLC
The SDLC provides a structured framework for understanding how software is conceived, developed, tested, deployed, and maintained. From a legal perspective, the SDLC helps align contractual obligations with technical deliverables. It does not, and cannot, fully capture the broader legal architecture that governs software development agreements and contracts in general. Certain legal elements operate across all SDLC stages or entirely outside them, yet they are decisive in determining enforceability, risk allocation, regulatory compliance, and dispute outcomes. These elements may be described as the “bird’s-eye view” legal constructs that frame and give commercial meaning to the SDLC itself. We will examine these macro legal governance elements and explain why lawyers must address them independently of the SDLC phases when contracted to work on software development agreements.
3.1. Governing Law, Jurisdiction and Dispute Resolution
Regardless of how well-structured and organised a software is developed, disputes are bound to occur. Software development is a complex endeavour, layered with project management and IT jargon. Ghana’s jurisprudence has not kept pace with fast-moving software development, and it is only a matter of time before it becomes increasingly complex to situate these complexities within our traditional Ghanaian legal framework. E.g. Can a court compel a litigant to disclose its source codes as part of disclosures or in a dispute in relation to that same source code based on the best evidence rule under section 165 of the Evidence Act 1975 (NRCD 323)? A robust arbitration clause that allows expert determination is necessary to resolve disputes arising from software contracts.
3.2 Risk allocation and liability management
Beyond the SDLC, lawyers must advise clients on macro-level safeguards that protect against professional risks. One important mechanism is the requirement that developers maintain professional indemnity insurance, which provides a direct remedy for losses arising from negligent performance, IP infringement, or failure to meet contractual obligations. This insurance function serves as a risk-transfer tool, ensuring that clients are indemnified without solely relying on contractual remedies. For freelance or developers working on small projects, clients may also insist that developers are ISO-certified or otherwise professionally accredited, creating an additional layer of accountability. In the event of serious contractual breach or professional misconduct, the client may report the developer to the issuing authority, which has the power to sanction or even expel the professional from the relevant registry. These measures, though situated outside the SDLC stages, help with the overall viability of the project.
3.3 Termination and Exit Strategy
Despite careful planning, some projects must be terminated before completion. Contracts should distinguish between termination for convenience and termination for cause, such as material breach or persistent non-performance. A termination clause may allow the client or developer plan for failure as a potential outcome. It should provide for a phased handing over, in addition to an escrow arrangement for source codes, should the circumstances call for it.
Moreover, structured termination will allow the client engage alternative service providers with minimal disruption. In essence, a well-crafted termination governance structure reduces an inherently high-risk stage of software projects into a legally managed exit strategy, balancing commercial interests with enforceable legal obligations.
4.0 Conclusion
Software development is no longer purely a technical exercise; it is a complex process that intersects with legal, regulatory, and commercial considerations. Lawyers have a critical role beyond drafting contracts, they must actively participate in each stage of the Software Development Lifecycle to anticipate risks, structure enforceable obligations, and safeguard their client’s interests. Ultimately, effective legal oversight transforms software development from a risky technical process into a strategically managed commercial project. Lawyers who integrate themselves into the SDLC are not merely enforcers of the law, they serve as partners in preserving value, protecting capital, and enabling sustainable innovation. In today’s fast-moving digital world, this proactive legal approach is indispensable for both developers and clients, as it ensures that software projects deliver their intended benefits without costly interruptions or disputes.
Disclaimer: The sample clauses and guidance provided in this article are for educational and illustrative purposes only and do not constitute legal advice.
Co-Authors: Lordinah Anyamah Ofei, Mavis Asantewaa Yirenkyi, John Michael Aggrey, Jessica Elorm Ashiettey, Fritz Ba-Taa-Banah and Richard Kwaku Mawuenam Hadzor
Peer Reviewer: Lily Oblie
REFERENCES
Boehm, B. (1988) – “A Spiral Model of Software Development and Enhancement
Mishra, A., & Alzoubi, Y. I. (2023). Structured software development versus agile software development: A comparative analysis. International Journal of System Assurance Engineering and Management, 14(4), 1504–1522. https://doi.org/10.1007/s13198-023-01958-5
Apecheta Corporation v. Linclare Inc. Civil Action No2 16-2030
Watford Electronics Ltd v. Sanderson CFL Ltd [2001] EWCA Civ 317
Supra note 1, at pp. 223-224
Trappler, T. J. (2010, June 24). If it’s in the cloud, get it on paper: Cloud computing contract issues. EDUCAUSE Review. https://er.educause.edu/articles/2010/6/if-its-in-the-cloud-get-it-on-paper-cloud-computing-contract-issues
Pleaders. (2023, March 13). An escrow arrangement is when a neutral third party holds the software code until certain agreed conditions are met All you need to know about source code escrow agreements. https://blog.ipleaders.in/all-you-need-to-know-about-source-code-escrow-agreements/