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Do I need a contract for my website?

Written by Izaz Ali on 20 May 2014

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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 take here.

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 it fine.

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 between them.

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 – what hardware equipment is required to run the software and support any ancillary databases etc.
*System Software and Software Tools – what ancillary software components are required to provide support to the software being developed?
*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 breached?
*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 off.
*Training/ Warranties and Updates- what training is required now and in the future.

*What warranties are given and will the software be easily upgradeable to cater for the purchaser’s future needs?

Will there be regular updates to iron out any problems as and when they occur? *

What will the developer’s 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 the agreement?
What will be the extent of the developer’s 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.

If you'd like to know more about this article please send an email to Michael Coyle quoting the article title and any questions you might have, alternatively call the office number on 02380 235 979 or send an enquiry through our contact form.

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