LAW4IT.COM NEWSLETTER [2002] LAW4IT.COM 01
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
events will result in termination for cause or otherwise.
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.
LAW4IT.COM NEWSLETTER [2001] LAW4IT.COM 02
Law For Information Technology Newsletter
Copyright 2001 George C. Eyre All Rights Reserved
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