Red flags when hiring an app or software developer

Why is a missing written scope a red flag?

Without a written scope there is no agreed description of what will be built, so there is nothing to check the finished work against and no basis for pricing changes. A scope should name the people who will use the software and what each can do, list what is included and what is deliberately left out, identify every system it connects to, and set out the order of delivery, how each part is accepted, the price and the payment schedule.

Be cautious with a firm quote given before anyone has asked how your business works. Ask what assumptions it rests on, and ask for those assumptions to be written into the scope.

Who owns the code when I hire a software developer?

Your business should own the code written for it from handover, and the contract should say so. IP Australia states that intellectual property created by a contractor is the property of the contractor unless otherwise stated in the contract. Read the ownership clause before you sign, and check whether the developer keeps rights in reusable components and licenses them to you instead of transferring them.

Source: IP Australia, Who owns intellectual property?

A licence can be reasonable for a developer's standard libraries, as long as it lets you keep using, changing and hosting the software if you part ways. If the contract says nothing about ownership, ask for a clause that assigns the intellectual property in the work to your business.

Why do I need access to the code repository and hosting?

The source code should sit in a repository you control or can take over, and hosting, domains, app store listings and third-party services should be registered in your business's name, with the developer given access that you can remove. If the developer holds every account, you depend on them for every change and cannot easily move the work to someone else.

Ask for access at the start of the project. Seeing the repository during the build lets you, or an adviser, confirm that work is happening and that the code is stored where it should be.

How do I know if a developer’s timeline is too vague?

A timeline is too vague when it gives only an end date, or a range such as a few months, with no milestones in between. A useful timeline breaks the project into phases, says what working software you will see at the end of each one, and states what the developer needs from you and when. Without milestones, you learn about a delay only when the final date is missed.

Ask how often you will see working software. Regular reviews catch misunderstandings while they are still cheap to fix, and they give you a record of progress if the project runs late. Put the milestones in the contract next to the payment schedule, so each payment follows delivered work.

What should a handover plan include?

A handover plan lists what you receive when the project ends: the source code, credentials for every account, documentation of how the software is built and deployed, and enough information for another developer to take over. It should also say whether there is a period after launch in which defects are fixed at no charge, what counts as a defect rather than a change, and how any ongoing support is priced.

The documentation should explain how to run the software on a new machine, how it is deployed, where configuration and secret keys are kept, and which third-party services it depends on. Without it, a new developer spends paid hours working these things out before any change can be made.

Ask a developer to describe a recent handover step by step, and whether that client has since had anyone else work on the code.

What are the red flags when hiring an app developer?

Other warning signs include pressure to sign quickly with a discount that expires, a request to pay most of the price upfront, no working software to look at until the end, vague answers about who will write the code or whether the work is subcontracted, and promises about outcomes the developer cannot control, such as guaranteed revenue.

Contract terms matter too. Since 9 November 2023, proposing or relying on unfair terms in standard form contracts with small businesses has been banned in Australia. The ACCC's examples include terms that let only one party end the contract or change its terms, and the protection covers businesses with fewer than 100 employees or less than $10 million in annual turnover.

Source: ACCC, Contracts (unfair contract terms)

What should I do if I see a red flag?

Raise it with the developer and ask for the fix in writing: a written scope, an ownership clause, access to the repository and accounts, milestones, or a handover plan. If the developer will not put these things in the contract, keep looking.

The guide to choosing a custom software development company lists the questions to ask on a first call, and the guide to what custom software and app development cost explains how to compare quotes.