EM Law are experts in drafting, negotiating and advising clients on website contracts including website design, development and hosting agreements. Our lead website contract lawyer is Neil Williamson who has extensive experience in advising clients on a wide range of software and technology law matters.
Website contracts govern the design and development of websites, along with any subsequent provision of web hosting services. A website design and development contract is often similar in nature to a software development contract so there are essentially two choices of route to take: either the waterfall route where a detailed specification will be used from the outset or the AGILE route were the designer and client will work together to build a website in accordance with the client’s wishes as the project progresses.
The first issue for a company wishing to establish an internet presence is how the website should be designed and constructed. Very few businesses have the resources or skills to undertake this task internally. Instead, companies usually instruct web designers to do this. The objective of website contracts is to ensure that a company gets the website it requires by imposing obligations on the designer to create the site according to the company’s specifications.
Website contracts should set out the customer’s requirements for the website in terms of a functional and performance specification although when using an AGILE process these requirements will be general. Website contracts should also set out the company’s requirements in terms of any visible content which the designer is to provide. The company should also seek to ensure that the developer is contractually bound to meet key milestones, in particular the date for launch of the site. Provision should be sought for review of the quality and speed of progress, giving the company contractual remedies where sufficient quality is not being achieved or the key milestones are not met.
The customer may also want to ensure that it is granted sufficient rights in the design of the web pages and any underlying software involved. By ensuring that it has the right to exploit the copyright and related rights in all aspects of the web pages, the customer can transfer the website to another designer to complete the project where, for example, the current designer is not performing. Where a complex site using bespoke software is being developed, the company may also want to require the software to be placed in an escrow arrangement. This will allow the company or a third party to continue development of the site if necessary.
The two most important areas in the contract for the designer will be the payment terms and intellectual property rights. The designer must ensure that the payment terms are clear and that any milestones are not too heavily weighted towards the end of the project. This is especially relevant for large projects with young companies that can easily fall into financial difficulties. Website contracts generally provide for the intellectual property rights in the site code to belong to the designer with the customer receiving a perpetual license to use the site that is built for them. If the designer is engaging third parties to contribute to the website content, for example, video or music arrangements then the designer must ensure that its contract covers the licensing of these elements appropriately as well.
The web hosting arrangements can be included as part of the design and development agreement but could also be a separate agreement with a different supplier. The scope of the services in the agreement should be given careful consideration by the customer to ensure that the obligations of the host mirror the precise requirements of the customer. A comprehensive definition of the services agreed will minimise the potential for future disputes.
In addition to the basic obligation on the host to make the site available on the web from its server, the services might also include other obligations on the host. These obligations might include:
One of the most important issues for the parties to address in website contracts is what should happen when the hosting arrangements end. How will the website be transferred to another hosting services provider and what support will the current host need to provide to effect the transfer?
For any questions you may have concerning website contracts including on their design, development and hosting arrangements contact Neil Williamson.
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