Which law governs software creation?

The Civil Code's contract-for-work norms: the contractor performs the work, the customer pays the agreed remuneration. No special statute exists.

Who owns the product created?

If the developer creates it with his own materials, ownership of the article passes to the customer. For a generic thing the rules of sale apply.

When does the client pay?

After performance of the work, unless the contract provides for instalments. Upon acceptance the remuneration must be paid, and if the client does not accept the work within the period set by the contractor, it is deemed accepted.

Within what period can a defect claim be made?

Within one year of acceptance of the work; for work connected with a building, within five years. The customer may terminate the contract at any time but must compensate the work performed and the damage.

Software Development Agreements in Tbilisi, Georgia

The legal nature of software development agreements

Custom software development in Georgia is not regulated by a special statute — it is governed by the norms of the Civil Code on the contract for work and labour. Under the concept of Article 629, under a contract for work the contractor undertakes to perform the work provided for by the contract, while the customer is obliged to pay the contractor the agreed remuneration. In the software context this means: the developer produces a result, and the client provides compensation.

The question of ownership is also important. Where the work involves the making of an article and the contractor makes it from materials acquired by himself, he transfers to the customer ownership of the article made. Where a generic thing has been made, the rules of sale are applied. In other words, a software product created by a developer with his own resources passes into the customer's ownership in the manner established by law.

The same article resolves the question of cost estimates: the drawing up of a cost estimate connected with the work is not reimbursed unless otherwise provided by agreement. This means that a model based on counting time and materials is available only by contract — the law establishes a presumption of result-oriented payment.

Payment of remuneration and acceptance of the work

Under Article 648, the customer is obliged to pay the contractor the remuneration after the performance of the work, unless the contract provides for payment in instalments. The payment schedule is a matter for the parties: the law's presumption is payment after delivery of the result, and advance or staged payments must be written directly into the contract.

Article 649 regulates the acceptance procedure: where under the contract or the nature of the work performed its transfer is necessary, the customer is obliged to accept the work performed. Upon acceptance the customer must pay the remuneration. The work is deemed accepted if the customer does not accept the work performed within the period set by the contractor. This last rule is practically significant: refusing acceptance through inaction does not reproduce the result — after the expiry of the period the work is deemed accepted.