Once you have your business up and running the chances are that you will use a web site to promote your product or services and, unless you are able to design and produce a web site yourself, you will have to instruct a designer and negotiate the terms of a web site development agreement. Highlighted below are some of the principal terms to look out for:
Specification
Timetable/implementation plan/project milestones
- is time of the essence?
Intellectual property rights ownership and indemnities
- licensing of key intellectual property rights from third parties
- are there standard elements ?
Pricing and payment arrangements
- tie into project milestones?
- are there caps on price increases?
Acceptance arrangements
- objective and measurable yardsticks are generally required
- who has responsibility for testing and "sign off"?
Warranties
- conformity to specification
- performance
- Virus free
- duration of warranties
Ongoing support arrangements
- service levels?
- minimum periods?
Treatment of source materials
- escrow agreement?
Liability issues
- are there exclusions and limitations
- liquidated damages for late delivery/non-performance?
Termination and consequences of termination
- termination for breach/insolvency
- treatment of materials on termination
Project management/change of control.
Specification
- look and feel
- security considerations?
Scope of Supplier's services
- server specification and procurement?
- internet service provider ("ISP") recommendation and contract?
- procurement of third party software?
- domain name registration?
Acceptance testing
- allow for rejection on both objective and subjective grounds
Restrictions on Supplier's activities
- no independent use of domain name
- no framing
- no linking to third party sites without consent
- non-compete (in terms of "look and feel")
Confidentiality
- no misuse of information posted by users
Ongoing support arrangements
- cover must be 24 hours a day, 365 days a year
Warranties
- portability of site to other hardware platforms or ISP?
Termination
- assistance in migration to another host/ISP
- access to designs, graphics and source codes?
A website development agreement is essentially the same as most software development agreements and, as ever, the most important terms relate to intellectual property, firstly, to ensure that the website developer has obtained all necessary third party licences to use the text and graphics etc on your site and secondly to ensure that if you decide to terminate your website development agreement, you will be able to continue making use of the intellectual property contained on your website.
If you would like further information, please contact commercial partner John Armstrong by e-mail at john.armstrong@cms-cmck.com.
