Negotiating Website Agreements

There are a number of issues website developers and clients should consider when negotiating a website development agreement. This memorandum assumes that the developer will also keep the website on its server.

Ownership

A website is text, programming codes and graphics. Who owns the copyrightable work product? Most developers are independent contractors. Under copyright law, independent contractors own their copyrightable work unless there is a written "work-for-hire" agreement. The developer might want to reuse some or all of the elements in future projects and would want to retain the ownership. On the other hand, the client might want ownership to prevent reuse.

The developer might be using graphics created prior to the current project. If so, a "work-for-hire" agreement is not be enough to transfer ownership of those graphics to the client. The developer would need to transfer the rights through an assignment agreement.

Control

Often, the developer will house the website on his server. The developer will maintain the site and be responsible for adding or changing the site's content when requested by the client. The developer could be accused of helping the client cause damage to a third party, such as copyright infringement, defamation, or obscenity. The developer will want the right to delete or refuse to add content which causes a problem. If the client is not paying the required fees, the developer will want the right to close down the site. These rights must be clearly spelled out so the developer cannot be sued by the client for lost profits and other damages when exercising these rights and the client does not have the site closed without notice and a chance to cure. A developer cannot always be aware of the potential liability posed by content and might also want the client to indemnify the developer against any such liability.

Acceptance

Creating a website is like having custom software developed. It is best if the agreement contains specifications on the desired appearance, components and functionality of the website. Before final payment is made, the client will want to perform some acceptance tests to verify that the site was designed correctly. The process of agreeing on the acceptance testing specifics usually educates both parties as to what is expected and what can be delivered.

Response Time

A web page that opens slowly has the same effect as slow service in a restaurant - customers do not come back. Many factors can cause slow response. Some are controlled by the developer, such as how the site is designed and the technology used on the server. Clients can require that those elements under developer control should result in defined acceptable response times, while taking into account factors that the developer cannot control.

Maintenance

Where the developer maintains the site, the client wants to know that requested changes will be made in a reasonable time. Links in a site, which bring visitors to other relevant sites, need to be reviewed and updated or they become dead. Finding dead links is like going to a restaurant and finding they are all out of a lot of things you want. The parties need to agree who is responsible for keeping the links current.

Client Publicity

After a developer works hard and creates a great new site, it will usually want to place a link on at least the home page identifying the developer in order to attract new clients. What if the client does not want the developer's name to appear on the site? To avoid this, the developer will have this right of publicity in the agreement. This right can be more valuable to the developer than the actual fee received.

Developer Publicity

Putting up a website does not mean anything if people do not know it is there. Various efforts can be taken to publicize a new website. There can be the minimal effort of notifying search engines of the new website. On the other hand, substantial time can go into making sure that the site is indexed on the search engines in a manner likely to be found by the desired customers. Clients should understand what level of publicity, if any, the developer is providing.

Backup

The client will want to require that the developer regularly back up the site, so that if the server crashes, the site can quickly be installed on another server. The client will want a current backup copy so that if the client decides to move to a different server, the client does not have to wait for the developer to deliver a disk. This is especially important where the reason for the client changing servers is a dispute with the developer.

Non-competition & Confidentiality

Sometimes a developer has earned a reputation for developing websites for a particular industry. In that case, a client knows that the developer might create a site for one of its competitors. In other cases, a client might be introducing the developer to a new industry. In that case, the client might want to restrict the developer for a reasonable amount of time from creating sites for its competitors.

Soliciting Employees

In the course of a long and expensive project, it might occur to a client to terminate the agreement and hire away one of the developer's key employees to complete the work. Developers can contractually restrict the client from doing so.

Liability

When a company depends on its website for a large portion of its business, it can incur large losses when things do not go right. Developers can contractually shield themselves from liability for such losses.

Law & Jurisdiction

The internet poses problems for courts to decide which state law to apply and in which state a party can be sued. To avoid spending a lot of time and money resolving these issues, the parties should resolve them in advance in the agreement.

Everything cannot be anticipated and covered in a website development agreement, especially given the speed at which the technology is changing. Nevertheless, both parties are best served when the issues listed here are resolved in the contract.