Beta Agreement

CS Shirish Bhootra
Jan 13, 2023
3 min read

Written by CS Shirish Bhootra

Rahul, the owner of RV Creations, wants to create an app that provides details regarding all the articles available at the outlet. But he also fears that sensitive information related to the outlet should not be made public and the app should be as per expectations. He searched on the internet regarding various apps similar to his expectations. While searching one app, an agreement appears wherein all details related to the app, terms and conditions and other relevant mentioned. He had also thought to execute such an agreement to reduce fear or to mitigate risk related to sensitive information. He contacted app developer MIKI Creations and outlined details regarding the expectations related to the app or what the app should be able to provide its users.

He consulted with SWETA CONSULTANCY SERVICES, where a team of legal experts helped draft such agreements as per Rahul's requirements and execution of such agreements to have a legal and binding effect of such agreements on all parties involved.

Introduction

A beta agreement is said to be an agreement wherein two businesses are involved. One business entity agrees to test a product or service created by the other business. It allows the business entity to test a product or service in a real-world environment and receive feedback from customers. It also allows a business entity to test the product or service to get a discounted price on the product or service.

Beta Agreement: Meaning

A beta agreement is a contract between two business entities; one is testing a new product, and the other is its beta testers. A beta agreement specifies the terms, privacy policy, and non-disclosure agreement between the entity or company and the testers.

A beta agreement is also referred to as a beta test agreement, beta test software agreement, beta policy, or beta license agreement. It covers situations when a business entity or company rolls out a new software product to a limited group of testers and doesn’t want to disclose sensitive information about the product to the public.

Beta agreements contain non-disclosure agreements, but they are different from NDA. Beta test agreements cover privacy and disclosure and other usage terms and conditions. It also contains aspects like how long testing will last and details regarding the powers and roles of parties involved in an agreement.

Beta Agreement: Purpose

Beta agreement purpose is said to be twofold. It serves to:

act as a safeguard against the company’s intellectual property during testing phases
formation of guidelines and expectations for testing

A beta policy discloses what a business entity would be provided to testers and what testers will provide in return. It also discloses guidelines concerning timelines for testing and protecting sensitive information related to the product. Furthermore, it also covers aspects related to the settlement of disputes, if any arise concerning beta tests or products.

Beta Agreement: Ingredients

Beta agreements comprise various parts, including:

Details concerning roles and powers of the company and tester.
Disclosure related to the duties of all parties involved, including tester feedback provision.
Details related to copyright and ownership.
Protection against liability.
Non-disclosure agreement.
Disclosure related to the privacy policy on data gathering and sharing.
Details related to the term and date of termination.
Support terms.
Dispute resolution process.
Additional sections like fees and payment, assignment, governing law and jurisdiction are included; it varies from entity to entity, as well as product and type of testing.

Beta agreement: Limitations

Beta agreements comprise termination dates, which renders such agreements invalid once there is a completion of the testing cycle. If testers still have access to the beta product or roll over to become regular users of the final product, be aware that there would be no applicability of the original beta agreement. Numerous agreements must be executed in case entities participate in numerous testing cycles.

Conclusion :

Beta Agreement plays a crucial role in business. It protects against the protection of sensitive information related to the product. It outlines against roles, powers and duties of all parties involved, which minimizes or reduces disputes related to the product and testing.