SOFTWARE ESCROW CONTRACTS

Abstract

Because for many companies, continuous operation and maintenance of custom software are crucial, they usually want to ensure that this continues even if the software licenser cannot operate in the future, for example, due to bankruptcy. The easiest way to overcome this for the licensee is to get a copy of the updated source code. Software developers are understandably reluctant to give a copy of their proprietary source code to the customer. The most significant asset of software developers is usually their source code, which can contain valuable trade secrets. One of the ways a software developer can deal with a client that requires access to the source code is to agree to store the source code using a triple escrow agreement. Under the escrow source code agreement, the developer provides a copy of the source code and documentation to a neutral party for safekeeping. The third party will hand over the source code to the buyer only after certain conditions defined by the contract have been met, such as the bankruptcy of software developers. That keeps the developer's source code confidential while, in theory, giving the user access to it if necessary. In this paper, we present the term software escrow contract.