---
title: "Software development agreement with AI coding-assistant and open-source terms"
url: "https://ailawframework.com/precedents/technology-media-and-telecommunications-it-contracts/software-development-and-ai-code-agreement"
type: "precedent"
site: "AI Law Framework"
id: "a24-software-development-and-ai-code-agreement"
area_id: "A24"
kind: "agreement"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-17"
---

# Software development agreement with AI coding-assistant and open-source terms

> Original Australian-law agreement for custom software development that controls developers' use of AI coding assistants, deals with ownership of AI-assisted code and the human-authorship gap, manages open-source…

Canonical page: https://ailawframework.com/precedents/technology-media-and-telecommunications-it-contracts/software-development-and-ai-code-agreement  
Law stated as at: 2026-10-17

Site index for agents: https://ailawframework.com/llms.txt

Original Australian-law agreement for custom software development that controls developers' use of AI coding assistants, deals with ownership of AI-assisted code and the human-authorship gap, manages open-source licences and SBOMs, and sets acceptance, warranty and IP indemnity terms.

## Key facts

- Kind: Agreement. A contract between two or more parties.
- Practice area: [Technology, Media & Telecommunications / IT Contracts](https://ailawframework.com/precedents/technology-media-and-telecommunications-it-contracts.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-17
- Status: Maintained. Checked on 2026-10-17 against the 6 authorities it cites, for Australia.

## When to use it

Use when a client commissions custom software, an app or integration from a developer or agency, especially where the developer's team uses AI coding assistants. For SaaS subscriptions use the SaaS agreement; for staff augmentation on time-and-materials terms, adapt clauses 4 to 6 into the services contract.

## How AI may be used

AI may draft the statement of work and schedules from the proposal, and check the agreement against the client's playbook. A lawyer settles the IP position, the AI coding controls and the warranty and indemnity package.

**AI may:**

- Draft the statement of work, milestones and acceptance criteria from the proposal for the lawyer and client to check.
- Build the approved AI tools schedule from the developer's written confirmations about tool settings.
- Compare an SBOM or licence scan with the prohibited licence list and flag items for review.

**AI must not:**

- Must not decide whether copyright subsists in particular code or who owns it; that depends on the facts of human authorship.
- Must not put the client's confidential source code or specifications into a tool that trains on inputs.
- Must not classify an open-source licence as permissive or copyleft without the lawyer or a licence tool confirming it.

**The lawyer checks:**

- Chain of title: written assignments from contractors and moral rights consents from individual developers.
- The approved AI tools schedule reflects enterprise settings the developer actually uses (no training, retention, code-matching filters).
- Open-source obligations for the intended distribution model (internal use, SaaS, app store or on-premises distribution).

## Authorities

- [Copyright Act 1968 (Cth) s 10 (definitions of "computer program" and "literary work")](https://www.legislation.gov.au/C1968A00063/latest/text)
- [Copyright Act 1968 (Cth) ss 35(2), 35(6), 196(3), 197 (ownership, employee works, assignment in writing, future copyright)](https://www.legislation.gov.au/C1968A00063/latest/text)
- [Copyright Act 1968 (Cth) s 195AWA (written consent to acts affecting moral rights)](https://www.legislation.gov.au/C1968A00063/latest/text)
- [Telstra Corporation Ltd v Phone Directories Company Pty Ltd 2010 FCAFC 149](https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2010/2010fcafc0149)
- [Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) ss 23–28, 60, 64, 64A](https://www.legislation.gov.au/C2004A00109/latest/text)
- [Privacy Act 1988 (Cth) Sch 1, APPs 6 and 11](https://www.legislation.gov.au/C2004A03712/latest/text)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/technology-media-and-telecommunications-it-contracts/software-development-and-ai-code-agreement and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*