How to Write a Proper Contract for Your Website

by in Strategy

Tags: OwnershipLegal

No one enters a business relationship expecting to have problems. Unfortunately, if anything goes wrong, your contract will be put to the test. A well-written contract protects both parties and helps ensure that you and the web developer are on the same page throughout the project. A man much wiser than I once said, “Paperwork will make us friends.”   

Most web developers will provide a separate contract for each project.  Some will ask you to sign their proposal as the main contract.  Either way, you should begin the project only when you have fully reviewed the terms of your relationship in writing.  Embarking on a project without a signed contract is just too risky and not sound business practice.

These recommendations are not intended as legal advice. Ask your attorney to review the contract before you sign it.

The following essential elements should be included in every contract for a website project, so get the assurance of your attorney that these clauses are covered:

What is and isn’t included?

Details of important services and features to your business need to be included in your contract. Devote sufficient time to incorporating every detail into your contract. Web developers will quote the project based on their understanding of the scope of work. It is important that you have a clear, mutually understood plan from the beginning of the project.  Your web developer cannot be held responsible for something that is not in writing.

Our friend John learned it the hard way.  He realized midway into the project that many important services were not included.  For example, he would have additional charges for SEO, he would have to write his own copy for the new website, and cover his licensing fees for stock photography.  This came as a costly surprise, and John learned the deal was insufficient for his needs.

Your contract should clearly state the detailed services and features. It is your responsibility to ensure that your contract is all-inclusive. Get it in writing. You may even want to list specific optional aspects of the project for future consideration, so it will be clear to both sides that these aspects of the project will not be billed separately.

How are changes and additions handled?

Websites evolve naturally, so you will have changes or additions to your project that were not included in the original contract. In fact, you can almost count on having a need for extra work as your project progresses. Successful websites need to be maintained and updated so they can accommodate the true growth and expansion of your business. Expect an ongoing relationship with your web developer.

When changes to the project occur, the web developer will most likely charge a fee for the added work. Establish an agreement on the hourly rate for all such work.

Following commencement of the project, you must provide your web developer with consistent direction and feedback. If you change direction or provide contradicting instructions, the web developer may charge extra for the resulting inefficiencies.  You must establish a mutual understanding on the policies throughout the course of your project, including the cost structure. Many web developers limit the number of design revisions. This should be agreeable to both parties and be detailed in the contract.

What are the milestones and deliverables?

A website project should have milestones regardless of its size. Detail deliverables and milestone deadlines in the contract. This will facilitate the flow of the project, meet deadlines and reduce the risk of major problems.

Indicate what is to be delivered at the completion of each milestone:  designs, copy, functioning website, etc., and as each milestone date approaches, see that deliverables are provided in a timely fashion.

In addition to tracking actions of the web developer, your own responsibilities should be in your focus as well, such as reviewing and signing off on work, providing feedback, and so on.  Delays on your end will cause delays on the web developer’s side.

Milestone planning depends on the project itself.  For most websites I recommend the following four standard milestones:

Milestone Activities Deliverables Payment
Discovery This phase includes all the activities in the beginning of the project such as the schedule, competitive analysis, kick-off meetings and interviews. - Project Proposal- Contract Deposit is due prior to commencement of work.
Design This project phase focuses on the structure, flow, look and feel of the new website, such as the sitemap, wireframes and mock-ups, as well as the completed designs. Often this phase includes copywriting as well. - Site Map- Wireframes- Completed Designs- Copy 2nd payment is due when the design is completed and approved.
Development This phase focuses on implementing the design and programming functions and features of the website. - Functional Website 3rd payment is due when the functional website can be reviewed and tested.
Launch This phase provides for website testing and preparation for launch. - Finalized Website Final payment is due when the website is launched.

What Are the Payment Terms?

Your contract should state the hourly rate and the total cost of the project. It should also show the payment timeline. The project should be divided into milestones. Payments should be scheduled at the completion and delivery of each milestone.

Most web development companies require a deposit at the beginning of a project. This amount should not exceed 50% of the project’s total.  The reason for assigning payment milestones is to ensure prompt delivery, as the web developer will have an incentive to complete work on time.

The contract must state the due date and the method of payment.  Ensure that your funding source can accommodate these payment terms, so project work is not delayed.

Is there a warranty and what’s covered?

What happens if something on the website is not working after the project is completed?  Are you required to pay for the repair work?  You may want to see that all work is covered by a warranty.  This means that if an error, a glitch or a flaw in logic is discovered post-launch, it will be fixed in a timely fashion by the developer at no cost.

The contact should clearly state what is and is not covered and if there are restrictions.  Reasonable warranty terms are 1-3 years, and it is generally accepted that if a third party tampers with the website, it voids the web developer’s warranty.

How Is Confidential Information Protected?

A Non-Disclosure Agreement (NDA) may be a part of the main contract or a separate agreement. It is commonly used to protect a company’s confidential or proprietary information (ideas, methodology, concepts, designs or processes).
In the course of working on your project, the web developer will need to have access to information that may be considered confidential. Some examples are: client lists, sales numbers, marketing ideas, and unique concepts (prior to securing patent or copyright protection). An NDA prohibits use and disclosure of such confidential information outside your working relationship.

 

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Legalese and Fine Print

A good contract for a website project may include the some of the following important clauses and provisions. The specific clauses important to your project should be established with your attorney:

  • Termination – what happens if your company or the web developer wants to terminate the relationship prior to completing the project?
  • Jurisdiction – this is especially important when working with a web developer who is out of state or overseas. If issues arise, you need to be aware of governing law of the web developer’s state or country.
  • Force Majeure – what happens if either party cannot meet their responsibilities due to circumstances out of their control?
  • Limitation of Liability – this limits the liability of the client and the web developer. The maximum amount of liability for both parties should be the amount paid for the project.
  • Severability – this states that if any portions of the contract are found invalid or unenforceable, the rest of the contract remains in effect.
  • Notices – this explains how future changes to the contract will be executed, and where notices should be sent.


This blog post is not meant to replace legal advice. Remember to consult with your legal counsel before signing the contract. Depending on the specifics of your project, there may be other necessary clauses or conditions that need to be covered. Having attorneys negotiate contract language could be the least pleasing part of the process, but it will protect both parties from possible issues down the road.

 

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