The implication of this question is that a contract must be a written document. While this may often be the case, for better or worse (depending on who you ask), it is not strictly true. A contract can also be made orally or through the conduct of the parties.
For a contract to be legally binding there must be an offer, acceptance of this offer, an intention to create legal relations and certainty of terms. In addition, in most circumstances, there must also be ‘consideration’: that is, a reciprocal promise which benefits or detriments one or both of the parties. For example, if you agreed to start providing an app for a mobile phone to a customer, and that customer also paid you a fixed monthly fee (or ‘consideration’) for this, a contract may come into existence through conduct.
So, we have established that a contract may exist regardless of whether it is written down or not. This does not answer the question as to whether it should be written down. To follow on from the example above of providing an app for a monthly fee, no other clear obligations may have been expressly established. Does that mean that you have no further responsibilities other than to continue providing this app for the monthly fee? Not necessarily.
‘Good’ or ‘service’
English law has not conclusively established whether an app is a ‘good’ or a ‘service’, but assuming that the app can only be downloaded over the Internet, it is likely to be the latter. If so, you will need to provide the app with ‘reasonable skill and care’, irrespective of whether you have a written contract, and what this means will be fact- and context-specific.
For instance, if the app relates to remote hosting of your customers’ data but there is frequent downtime, you may be in breach of contract. In addition, various other rights and obligations may be ‘implied’ into this contract, including when the contract can be terminated (e.g. immediately or with one months’ notice).
Why this matters
This matters for several principal reasons. You may be liable for a breach of contract if you provide the app to a standard which is lower than what is expected under English law and, if so, your financial exposure may not be capped if this results in a successful claim against you. From a commercial and reputational perspective, your customer may feel aggrieved if the app does not function as they hoped because their expectations differ from yours.
Moreover, if you have a presence in other countries, you may also want to ensure that any legal disputes, should they arise, can only take place in one jurisdiction. The list goes on and it is worth noting that the scope of what you can and cannot do under a contract depends on several factors including whether the customer is a consumer or a business.
Many implied rights and obligations can be excluded from a well-drafted contract (although not all) to ensure you are only committing to obligations you are prepared to accept. It also ensures that both parties are on the same page and there is a certainty of expectations (through gritted teeth or not). By having a robust written contract in place which clearly outlines the rights and responsibilities of each party, many issues can be pre-empted and resolved pre-signature and before they risk becoming a more significant problem.