Whether you have an existing site that needs to be modernized or want a new site, a written website design agreement will be important protect you and your business from costly mistakes. The contract will also reduce the chances of conflict between you and your designer that end up in court.
Sometimes referred to as a “website development agreement,” here are some of the key issues you’ll want to have addressed in your contract.
- Scope of Work. Also known as a “statement of work,” the scope of work section of your contract should identify in detail what is to be done by your designer. To protect himself, your designer may also want the agreement to specifically exclude certain design and development tasks that do not fall within the scope of the work to be performed.
- Change Orders. If you decide that work needs to be done beyond the Scope of Work, the contract should provide for the use to change orders to modify the scope. This may also include changes in deadlines and pricing to reflect the additional work.
- Work Timetable. If it is not addressed within the Scope of Work, your contract should identify elsewhere the timetable for deliverables, including milestones that trigger certain events (e.g. partial payment to the designer). The timetable should also include a beta testing phase so that you can feel comfortable the site works as intended.
- Payment. How and when you will pay your website designer should be included in the agreement. As the business owner, you’ll want to pay as little up front as possible and back end payment(s) so that it encourages your website designer to perform all of the services within the Scope of Work. On the other hand, there’s an incentive for the designer to get paid up front to avoid getting stiffed for design and development services rendered. Needless to say, payment provisions are negotiable and you should be able to come to an arrangement that satisfies both parties.
- Independent Contractor Status. Your website design agreement should make it clear that your designer is working as an independent contractor instead of an employee for your business. You do not want to end up in a legal mess where your designer has filed for unemployment compensation or worker’s compensation against your business based on alleged employment status.
- Intellectual Property Ownership. Many business owners mistakenly believe that website design done on a work-for-hire basis automatically means the business owns the intellectual property created by the designer. That may not be the case. You should address IP ownership in the agreement. Many designers create their own swipe files of work that they use as-needed to design and develop sites for multiple clients. If you want exclusive ownership, you may have to pay a premium to the designer. You may also have to pay to license certain content (e.g. stock photography and software apps).
- Warranties and Disclaimers. Your agreement should have a section that specifically covers what warranties your designer is giving, what warranties are excluded, and possibly limitations on liability.
- Confidentiality and Non-Competition. The contract should make sure that your confidential information that’s shared with your designer stays confidential. The agreement should also prohibit your designer from competing against you and perhaps working for your competitors for a certain period of time.
- Assignment and Subcontracting. You should make sure that your agreement restricts or prohibits assignments and subcontracting by your website designer. Your website designer may balk at this, particularly if parts of the work is being done overseas by freelancers who work for the designer. If you decide to permit such to occur, you’ll want to make sure those freelancers are bound by the same protections you’re provided in the agreement (e.g. confidentiality and non-competition provisions) as well as make it clear that you’re not liable for paying subcontractors if the designer decides not to pay them for some reason.
- Applicable Law and Dispute Resolution. Your agreement should state what law governs the agreement (e.g. the laws of the State of Texas and applicable federal law of the United States of America). Your agreement should also address how disputes will be handled. There can be different paths to take depending on the severity and type of breach. For example, if there is dispute as to whether your designer has substantive performed the Scope of Work on a timely basis, you may want that type of dispute handled by commercial arbitration. On the other hand, if the designer clones the website you paid for and sells it to your competitor, you may want to be able to march into a court and seek injunctive relief.
Of course, the terms of your website design agreement will vary depending upon your specific needs. So if you need a new agreement to protect your interests or have the designer’s website agreement template (that favors the designer) professionally reviewed and revised before you sign, your first step probably should be to set up a telephone consultation with a qualified Internet lawyer.
