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Website Development Agreements

Website Development Agreements

One of the questions clients often ask is "We're about to hire another company to create a website for us - what are the terms we should include in our contract?"

The starting point is that website development agreements have to address certain key points like who owns the copyright to the site, how quickly the development work will be done, the price, when you have to pay, what kind of input you will have during the design process, and precisely what the developer will deliver. This week, I'm going to discuss these and other things that go into a good website development agreement.

Defining Your Website Project

The hardest part of putting together a contract for website development is defining what the site will look like and what it will do when it's done. It's much like a design and construction contract for a building. You don't really know what you'll have until it's done. It's not easy to write a contract about something that will have an unknown result.

Sophisticated commercial websites are not simple creatures. They may include thousands of web pages of text, graphics, photographs, sound, audio, and sophisticated programming for animation, entering orders, and credit card processing.

The contract for such a website creation should break the process into discreet, if not somewhat arbitrary, stages. Often, the agreement will call for partial payments at the completion of each step.

The Developer's Form Contract

Typically, the developer will have a form agreement and want the customer to use it as the starting point. As with most legal forms, if they're any good, they're one-sided in favor of the person serving up the form. I know, I've drafted a lot of developer agreements for my clients.

Unfortunately, when dealing with Internet contracts, the scenario can be a little different than with other industries. Internet contracts often aren't good for either side-they aren't so much one-sided as incompetently written.

Even though we've had the Internet for over a decade, I think that there are still a number of common reasons for this. One is that new technologies are still entering the market every day, so even the forms can't keep up. Secondly, there are still very few lawyers with even passing familiarity with the technical and legal issues that arise from these agreements. Finally, the website development industry still commonly uses forms written by attorneys not familiar with the Internet. Or I've found that companies are clinging to a single form they hired a technology attorney to draft for a deal ten years ago. People fall in love with their forms, but unfortunately most forms out there are mucked-up versions of someone else's incompetently written form.

If you're investing significant money into the development of a website, you'll probably want to engage a technology attorney to help with the drafting of a meaningful agreement. I know that you're probably cringing at the thought of hiring and yes, even paying, a lawyer to prepare this agreement for you.

Nonetheless, there is something worse than paying a lawyer before the work starts. That something worse is paying a lawyer to litigate over a garbage agreement where a clear contract should have been; losing that lawsuit because, after all, it is a website; and then, paying for the website. Ouch. That's a triple whammy that hurts. Oh yes, then there's strike four which is that you pay for the website, but the developer owns the copyright.

This is where you'll be unless you have an agreement which clearly states what's supposed to be done, how much it should cost, how long it will take to do, and that you own the copyright.

The Stages of Development

Earlier, I alluded to a contract breaking the project into several stages. There's no magic formula here or even an industry standard way to do this. I like to think of the process as having six basic stages.

The first is the conceptual stage. This is where you and your developer are going to agree on basic issues like appearance, features, size, and what kinds of programs you are going to use within the web page itself.

Many companies choose to create two and sometimes three versions of their website. Sometimes, they'll have a cutting edge version with all the bells and whistles, a second version that lacks some or all of the advanced stuff, and then maybe even a text-only version.

Your company's need to do this arises for a couple of reasons. For one, cutting edge versions often require a reasonably fast connection to the Internet. The unfortunate reality is that many people are still out there using dial-up connections over a telephone line. Even with acceleration technologies ISPs commonly offer their dial-up customers, waiting for a feature-laden site to load is about as exciting as watching weeds grow.

Another reason for multiple versions of a site is that not everyone with a fast modem is using the latest browser, or even a compatible browser. Sometimes sites that have some kind of connection to Microsoft will demand that visitors use Internet Explorer to access the website, and not a competing browser like Firefox or Opera.

The second stage is design. In this stage, the parties lay out and agree to the basic style of the website. Here, the developer might show you illustrations, flow charts, sample graphics and text, and often offer some choices.

The third stage is the development stage. Now, the developer is actually putting the site together. Real programming is being done and tremendous effort is being expended. Any changes now are likely to be costly.

The fourth stage is the testing stage. The developer tests links and all other aspects of the site. Websites are often works of sophisticated programming and things always go wrong. This is when the problems are discovered and fixed. (My motto with everything that relates to computers is that nothing works the first time. Absolutely nothing. That's Grossman's first law of computing. My second law is that the more time critical the task, the less likely it is that your computer will work right.)

The fifth stage is "going live." That's the day that the world can access your site over the Internet. If the world's not interested, now you can at least show it to your kids from your home computer.

The final stage is maintenance. This is not strictly a development stage, but you still may choose to mention it in your development agreement.

After your site is up, it will need updating, links checked to make sure that they continue to work and other caretaking. A static, unchanging website is a dead site. A website worth putting up and investing money in, deserves and requires regular changes to keep people coming back to it. You will probably want your original developer involved with the updating and maintenance.

Copyright Ownership

One of the key provisions in your agreement is who owns the copyright to the site. As the company paying for the work, you may feel that you should own all rights connected with the design and functionality of the site. Often that may be fair and proper, but unless you have a properly written and clear agreement to that effect-surprise-guess who owns the copyright? You lose. The website developer owns it.

That may be a counter-intuitive answer to you and many others who feel that the company that paid for the work should own the copyright. Maybe that should be the way it is, but it isn't that way unless you have something in writing that says so.

Be Cautious and Get Good Advice

I've only touched upon a few of the basic issues in this area. There's a whole bunch more that's involved in contracting for website development. This area is so complicated that this brief column barely scratches the surface. Just be sure that you get competent, expert advice before you invest heavily in a website development project.

A little mistake like not owning the copyright to the website can be disastrous. There are many other traps for the unwary in this area. So, be careful.

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