Internal Development Cost Clause Samples

The Internal Development Cost clause defines how costs incurred by a party for developing products, services, or intellectual property internally are treated under the agreement. It typically specifies whether such costs can be included in reimbursable expenses, how they are calculated, and any limitations or exclusions that apply. For example, it may clarify if employee salaries, overhead, or use of company resources are considered part of internal development costs. The core function of this clause is to ensure transparency and agreement on which internal expenditures are recognized, thereby preventing disputes over cost allocation and reimbursement.