by Ilene B. Stern, partner at Kurzman Eisenberg Corbin & Lever, LLP
Congratulations! You’ve graduated from doing business with a handshake to a generic written contract downloaded from the Internet. But don’t pat yourself too hard on the back. Web development contracts can be legal minefields, as many web site developers learn the hard way. Make sure your contract protects you from potential liability, non-payment after delivery of work product and other unintended consequences.
My advice? Draw up contracts that specifically address these six big questions, or you will leave yourself wide open to possible disputes:
1. What happens if the web site goes down?
A business can grind to a halt when its web site goes down, particularly if e-commerce is involved. As the person or entity responsible for designing the site, you can be held liable if your client incurs financial losses as a result of a web site crash. You can protect yourself from this kind of liability, as well as other liabilities relating to the web site, with appropriate disclaimers and limitations of liability.
2. Who is liable for possible intellectual property rights infringement?
The creation of a web site will involve many intellectual property rights issues. Developers typically use off-the-shelf programs, stock images and videos to construct sites. The client often supplies much of the written material, art and photos for the web site. A contract should state that you make no representations or warranties regarding non-infringement of any patent, copyright, trademark or trade secrets rights. The client should warrant to you that the materials it provides for the web site are owned by the client or that the client has permission from the owner to use such materials. Appropriate indemnification provisions are also advisable for your protection.
3. How much can the client rightfully claim in damages?
It is possible that you may fail to deliver the product as promised. Your contract should limit damages to your fee only. You should make no representations or warranties that the web site will meet your client’s expectations of traffic or business and you should specifically exclude any liability on your part for damages to your client or any third party based on the performance or design of the web site, including consequential or special damages, lost profits and other incidental damages.
4. What is the scope of the project?
You probably learned the first time you designed a site how dangerous it is to leave project scope open-ended. Your contract should spell out in detail the scope of work to be delivered, including a comprehensive description of functional and design specifications that include the number of pages, graphics, programs and the amount of content required. The scope of work should include dates for each deliverable, with testing and acceptance periods and the client’s obligations for providing materials, text, code and graphics, and reviewing work in progress.
5. When will I get paid?
You should specify the fee for the project and a payment schedule. The contract should state how many revisions the fee covers and include the charges for revisions or modifications that exceed that limit. Web sites can be enormously complex and, in general, it is difficult to proceed to the next step unless the client does what’s needed in a timely manner, so include an initial retainer in your fee schedule to cover delays.
6. Who gets the credit?
Okay, this isn’t a real landmine, but you’re leaving something on the table if you don’t grab it. Your portfolio is your greatest asset, so make sure your client permits you to claim credit for your services either by posting a link to your web site on your client’s site or by inserting on your client’s site other identifying tags.
Even a small project can present big problems, so protect yourself. Work with your attorney to make your contracts as “bullet-proof” as possible.
Ilene B. Stern is a partner who represents information technology clients at Kurzman Eisenberg Corbin & Lever, LLP, attorneys in White Plains, N.Y.