Litigation Risks and Practical Safeguards for Contractors in Agile Development (Part 4): The Critical Importance of Communication and Expectation Management with Users
Jul 04, 2025
Introduction
Agile development is a methodology that emphasizes flexibility and rapid responsiveness to change. However, in practice, it often results in increasing workloads that frequently extend beyond the originally planned development period. Explaining this reality to users can be challenging, and if handled poorly, it can easily escalate into serious disputes.
This article analyzes the root causes of such situations, proposes practical countermeasures, and explores how to build and maintain trust with users.
Agile development is widely adopted for its adaptability, but in the real world, it is not uncommon to see projects “go up in flames,” face legal risks, or damage trust irreversibly. At the core of these failures lie structural misalignments in expectations and a lack of transparency between users and vendors.
1. Structural Challenge: The User–Vendor Perception Gap
What Users Really Care About
In reality, clients (users) are not necessarily interested in Agile as a methodology. Their primary concerns tend to be:
Keeping the project within budget
Delivering tangible results within the agreed timeline
Minimizing involvement in process details, which they often find cumbersome
Maintaining only minimal interest in regular meetings or backlog updates
Typical Misunderstandings on the Vendor Side
Vendors often make dangerous assumptions, such as:
“They attend regular meetings, so they must fully understand the status.”
“They see the backlog, so they feel reassured.”
“Agile means they’ll naturally accept any scope changes.”
This disconnect is frequently the first step toward a project spiraling out of control.
2. Common User Behaviors That Trigger Problems
In practice, users often display typical behaviors that create additional risks:
After-the-fact Changes & Shifting Blame
“We didn’t know the requirements would be like this.”
“Why didn’t you confirm this with us?”Concealed Assumptions & Decision-making Contexts
Important background conditions are withheld, yet rework is demanded without hesitation.Low Cost Awareness for Rework
Users often assume rework is an obligation and underestimate its impact on costs and timelines.
Why Does This Happen?
Specifications often remain unclear internally on the client side.
Political factors (departmental coordination, executive approvals) take precedence, undermining vendor alignment.
There is a common internal misconception that “Agile means we don’t have to finalize requirements upfront.”
This behavior is a structural risk that exploits Agile’s flexibility in bad faith.
3. Why Legal or Contractual Arguments Alone Don’t Resolve the Problem
When projects start to go off track, some vendors rely on legal defenses such as, “It’s a quasi-delegation contract, so deliverables are not guaranteed,” or “That’s how Agile works.” This is extremely dangerous.
User’s Mindset:
When the link between money spent and deliverables becomes unclear, trust deteriorates rapidly.
Users are more likely to claim, “We didn’t know,” or, “Why didn’t you confirm with us?”
They can easily paint the vendor as solely responsible, justifying payment refusals or litigation.
Legal arguments should be the final line of defense — building relationships and ensuring transparency must always come first.
4. Solution: Using Velocity and Story Points to Manage Expectations
Basic Concepts:
Story Points: A unit for estimating workload and complexity.
Velocity: The number of story points that can be completed in a single sprint (typically 1–2 weeks).
Improving the Quality of Conversations:
Effectively using these concepts helps:
Make it clear to users that every change has a cost impact.
Discuss upfront that the current pace cannot absorb unlimited rework.
Show why thorough specification confirmation is critical.
Practical Tips:
Integrate Story Points and Velocity explanations into user education.
Highlight the impact of rework as quantifiable numbers during sprint reviews.
When rework occurs, clearly estimate its impact and get explicit user acknowledgment.
5. Building a Structure Where Users Feel Comfortable Paying
Five Key Elements for Trustworthy Billing:
Pre-Agreed Unit Labor Rates
Align on unit prices for different tasks and shared value recognition.Transparency of Tasks and Deliverables
Visualize progress and output clearly, even for non-technical stakeholders.Change Records and Accountability
Always share meeting notes and impact estimates for added functions or scope changes.Leveraging Velocity and Story Points
Raise conversation quality and make cost and timeline impacts of changes self-evident.Communicating Estimation Uncertainty
Share the inherent estimation range with users to align expectations realistically.
Conclusion
Agile is designed to embrace change, but it does not have built-in resilience against “bad-faith exploitation of change.” Managing retroactive claims and hidden assumptions must be addressed through governance designed from the outset.
Three Principles for Success:
Legal arguments should be a last resort.
Use numbers and visualizations at the day-to-day conversation level.
Intentionally educate the user on these practices.
Such governance frameworks are the key to project success in the Agile era. Without them, trust will be destroyed long before any court ever hears the case.
Therefore, even after the kickoff meeting, preparing a clear high-level estimate remains essential.
You are welcome to contact us via the Contact Form to discuss and for more information.
