Law For Information Technology Newsletter

Web Site Development Agreements

As most businesses wishing to create web sites do not have the necessary expertise in house to develop their own, they will retain specialized companies for such services. A web site development agreement should be executed to protect both the developer and the end user for which the web site is being developed. The developer will want to ensure that it gets paid and will want to limit its liability. It will want to ensure that he has a clear definition from which to work from as well as to ensure that it gets paid extra for any changes that the end user wants that increases costs. The end user will want to protect itself by dealing with issues like ownership of the web site.

In discussing and negotiating such an agreement, the developer and end user will be able to come to a better understanding of what each of them has to do in order for a successful implementation of a web page. There will be less risk of misunderstanding with an agreement in place.

The following are the major issues that are contained in a web site development agreement:

1. Preamble Clauses: provides necessary background information i.e. that the developer will develop the web site for the end user.
2. Administrative matters: to define contacts for each of the parties and who has authority to agree to design specifications and acceptance testing. To define such committees as the parties may feel is necessary.
3. End Users and Developer Responsibilities: To define what each of these parties must do in order to achieve a successful implementation of a web site as well as a time table to specify when these responsibilities must be done.
4. Problems and Corrective Actions: The end user will want the agreement to address problems that could arise such as bugs and that the developer will correct them promptly while the developer must be concerned that the agreement does not require it to do too much such as promising a totally bug free web page.
5. Change Procedures: It is important to define what procedure must be followed in the event that the end user wishes to amend the specifications and how a change would effect the cost and schedule.
6. Design specifications: It is very important in small as well as large web site development projects to define the web site. This protects both the end user and the developer so that there are less misunderstandings. The developer may be retained to develop the specifications while working closely with the end user and in this case, the agreement may provide that the project be completed in stages, with the specifications being completed in the first stage.
7. Other Services the agreement would define other services to be provided to the user and associated fees.
8. Fees and Payment: The contract should provide for when the fees will be paid as well how much the fees are. It is very important to determine if the fees are to be based on a fixed amount or on hourly rates.
9. Testing and Acceptance The testing data and criteria for acceptance must be defined.
10. Confidentiality and Non-Disclosure: The end user will want to ensure that its confidential information is protected and not shared with its competitors while the developer will want to ensure that its business is not unduly restricted.
11. Intellectual Property and Ownership It is important to define ownership of the result of the web page development. The developer needs to define which components of the development it can freely use in other projects while the end user will want ownership of all components developed for it and for which it paid. The end user will want to know which of the components it does not own.
12. Warranties and Representations & Limitation of Liability: The end user will want warranties from the developer but the developer needs to limit its liability to a reasonable level. The developer will not want to be liable for any third party actions such as down time by an internet service provider.
13. Term and Termination: The parties will want to define the length of the contract and what
14. General Terms: The contract will contain general legal terms that provide for such items as jurisdiction and that the written contract is the complete contract. It is very important for both web site developers and end users to have an agreement executed. A web site developer or an end user wishing to have a web site developed for it, should discuss, negotiate and execute an agreement that defines the terms and conditions of the web site development process.

    Disclaimer:

    This information is provided as general information only. It is not intended to be provided as legal advice. The reader is advised to seek independent legal advice. Copyright 2001 George C. Eyre All Rights Reserved