Project Management

Traditional vs Agile Development Contracts


Here at Merlion Solutions we recognize that contracting is an inherently complicated process, even more so in an industry of high complexity and uncertainty such as software development. To ease this burden, the team at Merlion Solutions utilizes Agile to reduce risk and waste in our software development process. Waste such as; the feature creep, timeline delays, development revisions, miscommunication, and wishful thinking can all be reduced by a well formulated contract with an agile framework. This is because an Agile framework is dependent upon customer collaboration with the development team.

The traditional contract is comprised of a few essential requirements that are needed to be held valid in the court of law. Those components are; the offer, acceptance, competent parties, lawful subject matter, mutuality of obligation, and consideration. Within the offer there is the intent to contract, a specific proposal in certain terms, and an identification to whom the offer is being made. The acceptance is the unqualified consent of the other party to the terms of the offer. Similarly, the contract must be of a lawful subject matter to be enforceable in court. Mutuality of obligation is met when both parties have a common intention or “meeting of the minds” regarding the terms of the contract. Finally, consideration which is typically money or a promise, that cements the parties’ obligation to each other. Each of these parts are important in their own right but underlying all of them is a goal of making tangible and certain the true nature of the bargain being made.

The Agile contract is substantially the same for purposes of remaining a valid contract, but the operational process and delivery of goods and services has been altered to reduce the risks and wastes mentioned above. The Agile framework can be described as an adaption of the scientific method of empiricism, where the customer and development team enter a cyclical process of; planning, developing, testing, and deploying small increments of the whole software product. This process of rapidly deploying incremental deliverables reduces risk and waste for both the customer and developer by limiting the scope of the deliverable and the extent of payment required. Furthermore, the Agile process gives the customer and developer the flexibility they need to discover and pursue the value in any given piece of software by focusing on the features that are beneficial and ignoring those features which are no longer necessary.

Merlion Solutions understands that the key to the benefits of an Agile contract is frequent communication and collaboration with the customer. For us the measure of a successful contract is not the wealth and depth of defenses and protections the parties have access to if trust breaks down, but in how the contract is able to further promote and ensure the completion and success of the project contracted for.