Do I need a contract for my website
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Written on 20 May
Website and software development contracts are often seen as
complex and time consuming to negotiate and put together as the
interests of the purchaser and the developer differ significantly.
Take for example fees. There are a number of two options to
1. The development can be on a fixed price or
2. on a On a time spent basis, or even a
3. Ccombination of both if the development/ programming is split into
different stages/ modules.
A fixed price contract greatly assists the purchaser in
budgeting and prevents any nasty surprises in relation to project fees
during the project. As for the developer, it is preferable to opt for
the time spent basis so that it is paid for all its time/ effort. Also,
usually there is no financial incentive for the developer to complete
the project within a specific time period so this arrangement will suit
Whichever option is taken it is crucial that the purchaser
spends time and effort in putting together a project brief so as to set
the goal posts and work out how complex/ extensive the development of
the software will be. With this information to hand it will be easier
to tender the work and obtain a quote from several developers. Once a
developer has been selected, the project brief can then form a part of
the contract between the two parties.
We would always recommend that the oral discussions between
the parties be concluded in the form of a written contract so as to
avoid any arguments later on any of the terms provisionally agreed
The following checklist should serve as a useful pointer as to
what terms should be specifically discussed with a developer when
negotiating a software or website development contract:
*The Functional Specification and Time
Scales- what the software is required to do and when it is required for.
*Site Map, Site Plan, and Screen Design- an overlay of what it should
finally look like. This should be tied in to progress meetings and
reports so that progress can be monitored regularly.
*Hardware Ė what hardware equipment is required to run the software and
support any ancillary databases etc.
*System Software and Software Tools Ė what ancillary software
components are required to provide support to the software being
*Intellectual Property Rights- who owns the right to what is being
created? Is there any specific software component that the developer
will keep back and only licence to the purchaser? Is an escrow
arrangement required? Will the developer warrant and indemnify the
purchaser that in developing the software no third party rights will be
*Testing & Signing Off Procedures- how will the software be
tested and under which system? Ideally this should be identical to that
of the purchaser and the final payment should be linked to the signing
*Training/ Warranties and Updates- what training is required now and in
*What warranties are given and will the
software be easily upgradeable to cater for the purchaserís future
Will there be regular updates to iron out
any problems as and when they occur? *
What will the developerís response time be
to critical and n-on- critical problems? Is maintenance &
support required? If so on what terms?
Other general legal terms that the lawyers
can address, which should include, the following:
What would happen in the event of a
dispute- will arbitration or some form of mediation apply,?
Wwhich countries law will apply to the interpretation/ enforcement of
What will be the extent of the developerís liability if the software is
not developed within the time frame agreed between them or if the
software does not meet the functional specification?
What would happen in the event of something happening which is outside
the control of both the purchaser and the developer?
Will any of the terms that have been agreed be assignable to others?
Lawdit isare able to provide precedent
contracts that set out what should generally be agreed between the
parties for you to adapt to suit your needs. Alternatively, we can
draft a bespoke/ tailor made contract to suit your exact needs.
Written by Izaz Ali
About the Author
Solicitors offer services and advice for litigation,
commercial contracts, Intellectual Property and IT legal agreements. We
are experts in commercial law with a heavy emphasis on Intellectual
Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of
Higher Court Advocates and we are the appointed Solicitors to the
largest webdesign association in the world, the United Kingdom Website
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Article Published/Sorted/Amended on Scopulus 2014-05-30 09:09:42 in Legal Articles