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Providing a time-limited version for testing certainly is legal. Just make sure your client knows this and it's in the contract. Display a notice like "Note: this beta version of the software will not run after 1-4-2013".

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Well, that's just a time limit and obviously there's nothing wrong with that.

But the concept of a time bomb is that it's hidden and can cause harm at some point.

(http://en.wikipedia.org/wiki/Logic_bomb)

Exactly. If the client was warned, removing the time bomb from the code wouldn't be hard.

Cryptography to the rescue! Years of research and expenditure on DRM says it should darn well be possible. It might also be possible to break it, but just imagine the irony of someone who refused to pay bills for contracted software dev work from one company, trying to hire a team to crack the DRM from the previous contractor?

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