Essential Insights into IT Industry Contracts
- Apr 10
- 5 min read
1. What types of contracts are most commonly used in the IT sector?
In Romania, the agreements most common in the IT sector are:
Service contracts are highly popular for freelancers and external collaborators. It can be signed between SRL companies or between these and self-employed individuals (PFA), providing flexibility in contractual relationships for various IT services, such as graphic design, maintenance, development etc.
Employment contracts are used for employees in their relationship with employers. When an IT developer is employed by a company, an individual employment contract is signed, complemented by the company's internal regulations and other domain-specific documents.
A software development contract is used for specific projects such as developing applications or platforms, with a set duration. It can also be used for long-term or indefinite projects. You can also use a contract for SaaS supply.
Maintenance and technical support contract - order contract
Maintenance and technical support contracts are signed between an IT service provider and a client, ensuring the maintenance, updates, correct functioning, and troubleshooting of IT systems, applications, websites, or infrastructures. It is common for platforms already delivered, internal networks, turnkey software solutions, or websites with complex functionalities.
Software licensing contract - order contract
A licensing contract represents a legal agreement between a software developer (or copyright holder) and an end user (individual or company) that specifies the right to use a software in a particular way without transferring ownership of the software/source code.
Outsourcing contracts - order contract
Outsourcing contracts are agreements where a company (client) entrusts another entity (provider or third party) with responsibility for delivering specific services or performing activities typically carried out by the client's employees. In IT, outsourcing is frequently used for services such as software development, IT maintenance, technical support, and IT infrastructure management.
2. Service contract vs. employment contract – how to differentiate them correctly?
The essential difference lies in dependency and subordination. If the person works according to your schedule, from your office, and under your daily coordination, you are likely dealing with an employment contract. A service contract would be risky in this case. For independent collaborators (freelancers), a service contract is appropriate, but there must be true autonomy.
Risk of requalification by ANAF
The risk of ANAF reclassifying independent activities as dependent arises when tax authorities consider that activities performed under an independent contract (such as service contracts) should be treated as dependent (in the form of an employment contract). Reclassification to a dependent activity can lead to changes in the tax relationship and retroactive payments of additional taxes. This risk is significant and frequent, so it is advisable to consult a specialist lawyer before entering into the relevant contract.
3. What should a software development contract include for legal clarity and security?
Clear definition of deliverables (what is being developed, in which versions);
Milestones and delivery deadlines;
Testing and acceptance conditions, along with performance criteria;
Remuneration (fixed, hourly, or mixed);
Intellectual property clauses (who owns the source code, what rights are transferred);
Confidentiality and data protection;
Warranty and post-delivery support;
Termination clauses and penalties.
4. Who owns the source code if nothing is specified in the contract?
Source code ownership is an important issue in IT contracts and depends on the specific agreement between the parties (usually between the software developer and the client). In general, there are a few main scenarios regarding source code ownership:
Developer ownership: If no clear agreement is made, rights to the source code remain with the developer, and the client only receives a usage license.
Client ownership: In a software development contract with a transfer of ownership, the source code becomes the client's property after the project is completed.
Source code licensing: The source code remains with the developer, and the client is granted a usage license, which may be exclusive or non-exclusive.
Joint ownership: In rare cases, the rights to the source code may be shared between the developer and the client, especially in long-term partnerships.
Outsourcing: In outsourcing contracts, source code ownership depends on the signed agreement, but the client usually gets ownership rights to the results, which must be clearly stipulated in the agreement.
5. Can I include non-compete and confidentiality clauses in IT contracts?
Yes, and they are even recommended. Especially in contracts with developers, testers, or DevOps professionals who may have access to the source code, product strategies, databases, etc. Confidentiality clauses can be unlimited in duration.
Non-compete clauses should be territorially limited, last a reasonable time (e.g., 2 years), and in some cases, they should be compensated, particularly in employment contracts. As a rule, non-compete clauses cannot overly restrict a person’s right to perform professional activities from which they earn their income.
6. What risks arise if I work without a contract or only based on emails?
Even though emails can prove some elements of collaboration, and in the event of a dispute, even the existence of a contract between parties, the absence of a written contract has significant consequences:
Complicated debt recovery: Lack of a written contract often makes it impossible to use efficient debt recovery procedures such as payment orders.
Unclear intellectual property matters;
Exposes you to fiscal risks (e.g., reclassification of activities as disguised employment).
7. What’s the difference between a fixed-term service contract and a project-based contract?
A fixed-term IT service contract specifies an exact end date, regardless of the project’s stage. It is ideal for projects with a determined duration and fixed budget.
A project-based contract, on the other hand, ends when all deliverables outlined in the contract are completed and accepted by the client. This is suitable for projects where deliverables and objectives are well-defined and must be met for the contract to conclude.
8. What are the differences between an IT consultancy contract and a software development contract?
An IT consultancy contract focuses on providing expertise and advice to improve the client's IT infrastructure, optimize processes, or implement technological solutions. It may include IT audits, strategic planning, and training.In contrast, a software development contract involves creating a specific software product tailored to the client’s needs, including design, programming, testing, and implementation stages.
9. What’s the difference between an IT maintenance contract and an IT support contract?
An IT maintenance contract involves regular upkeep of IT systems and applications, including updates, security patches, and issue prevention. Its main purpose is to ensure the smooth and uninterrupted functioning of IT infrastructure.
An IT support contract focuses on providing technical assistance to resolve problems and incidents arising during the daily use of IT systems. This may include helpdesk, remote support, and on-site interventions.
10. How does a software licensing contract differ from a customized software development contract?
A software licensing contract grants the client the right to use an existing software, developed by a provider, in accordance with established terms and conditions. It often includes limitations on usage, the number of users, and software modification.
In contrast, a customized software development contract involves creating a new software tailored to the client's specific needs and requirements. The client typically owns the intellectual property rights to the developed software.
11. What’s the difference between an IT outsourcing contract and hiring an IT specialist directly?
An IT outsourcing contract involves outsourcing specific IT functions or services to a specialized external provider. This type of contract is used to benefit from specialized expertise, lower costs, and flexibility.
On the other hand, an individual employment contract involves hiring an IT specialist as part of the company’s internal team. This offers greater control over activities and the integration of the specialist into the company culture but may come with higher costs and additional human resource management responsibilities. Furthermore, the employment contract can only be terminated under conditions specified by labor law and entitles the employee to various benefits, such as leaves.
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