The Importance of Having a Web Design Contract
The success of any project hinges not only on the quality of work produced but also on the terms under which every aspect of the project is governed. A web design contract sets the framework for this successful relationship, ensuring that both the client and the service provider have a mutual understanding of their roles and responsibilities.
First and foremost, a web design contract protects both parties. In the absence of an agreement, either party may determine that the expectations or standard of services have not been met and absolve the obligation without reprisal. However, a thorough contract establishes a mutual groundwork for expectations, deliverables, and timelines, and as a result, also provides recourse in the event of a breach.
Not having a contract puts both client and vendor at risk of future disputes. Creativity , like all professions, has an inherent business side. From time and resources to confidentiality and liability, both clients and vendors are best served when the terms are agreed to in a transparent manner. Having a contract guarantees that the scope of services is clearly defined, and provides guidance to each side should issues arise mid-project.
In the case of small projects, contracts are frequently passed off as superfluous. Yet, with every facet of professionalism behind every deliverable, this dismissive approach puts both parties at risk of abandoned projects and legal action.
Web design contracts are similar to other contracts governing the administration of services. In this case, customization of the contract for the situation is good contractual practice and protects both parties in the case of future disputes.
Essential Components of a Web Design Contract
The contract should set out exactly what work you are expected to produce and what the client will be paying for. At one extreme, a complicated website may require you to produce detailed functional specifications. At the other end of the spectrum, you may find that your clients are happy to sign a contract which sets out no more than a high-level description of the service they require from you.
It is advisable to set out the scope of the work in full. If there are further stages of the project, such as a separate design phase, then this should be made clear. If the client has specific requirements for the website (for example, particular logos or images), then these should be mentioned, together with a statement that the client will be responsible for providing these or procuring them for the designer.
Although it is always good to have more detail and for the scope of the work to be clearly set out in writing, this will not necessarily protect you if the client is not happy with the work. Clients sometimes complain that particular aspects of the website are not as they had envisaged, although they may not have set out their expectations in the contract. A good way to combat this is to ensure that the client is asked to approve the website at various stages of the process. This could include approving test versions of particular pages of the website or proof-reading texts before final sign-off.
Providing a fixed price to the client will be appealing, but it can be a double-edged sword. If the project ends up being delayed, or there are unanticipated amendments that need to be made to the site, the client will not be happy where you seek to charge for these. Conversely, you will be affected by any delays or changes that are the fault of the client, with the fixed price possibly not reflecting the work done.
It is important to protect yourself, while also being flexible. On the one hand, the client should have a right to extensions of the timeline if it gives you written notice and provides a reasonable explanation for its delay. On the other hand, you should have the right to extend the timelines if the client is delayed at its end (e.g. if it does not respond to your queries timely or is slow in approving website pages).
The contract should state that the website will remain the property of the designer until the purchase price is paid in full.
The designer should not release the website into the public domain until payment is received in full. Unless provided for in the contract, the website should not be transferred to the web host until the designer has received payment.
The designer should insert a warranty regarding ownership of IPR in the website. The designer should warrant that the website is not based on copyright works belonging to third parties, save for where the appropriate third-party permissions have been obtained.
Typical Clauses Found in Web Design Contracts
Your contract should discuss when and how you or the client can terminate the agreement. Check if there are any applicable laws where you do business that affect termination of contracts and also be sure to spell out what happens upon a termination. Typically a termination clause will allow either party to terminate the contract upon giving some specified notice or after delivering a specific notice. It is wise to include language that addresses what happens upon termination, including return of property to the client and payment on work completed. If you accept a retainer in advance of your work, you will want to be clear about how that will be handled upon termination.
A confidentiality agreement (also referred to as a non-disclosure or non-circumvention agreement) prohibits the workforce from disclosing or using information that doesn’t belong to them. You should discuss this with your client so they know that it applies to their confidential information and trade secrets as well. Again, there may be laws outside of your contract that require all workers to sign confidentiality agreements (lawyers and doctors, for instance).
Unclear language about revision policies is one of the most common issues web designers and developers face. This is a great reason to have a contract to begin with, as it’s easy to get off on the wrong foot the very first day and this leads to frustration and money loss for both you and the client. The revision policy commonly spells out how revisions will be made and who is responsible for the cost of the revisions. You might include how many revisions are included in the project, additional fees on revisions, whether a meeting is required for revisions, and anything else that is relevant to the project. You want to ensure both parties are on the same page as far as what will be considered a revision.
Creating a Web Design Contract: A Step-by-Step Process
There are literally hundreds of examples of web design contracts that can be found online. They range from one-page "work-for-hire" templates to elaborate sixteen page agreements that look a lot more like a detailed consultant contract. The best practice though – the practice that will allow you to sleep at night – is to have a custom contract drafted for each project you undertake. Your design contract should be specific to your business and it should be specific to the project you’re working on with each client.
If you were to get a client to sign one of the pre-packaged contracts you find on the web, I think you’d be taking a pretty big risk. Most of these contracts cover issues broadly and don’t recognize the specific needs of a web design firm. Also, many of them have pretty biased IP provisions and project termination clauses that can severely limit your rights as the developer. That generally isn’t the path to success so you should do your best to have a custom contract in place that is tailored to your project.
The good news is that we’ve prepared a free template web design agreement that you can use to start drafting your own contract. However, as much as you can desire it to be good enough to simply "fill in the blanks," there’s really no alternative to having your contract professionally drafted so it covers the particular issues relevant to your company and the project you’re currently working on.
In general, the process for creating a web design contract should look something like this:
1. Prepare a list of the things that you need to address in your contract. For example, you probably need to address the following issues: ownership of IP created as part of the work; the project fee and payment terms; project deadlines; early termination rights; if you can terminate the contract for client’s failure to pay; indemnification of damages; non-circumvention; and binding arbitration.
Also, if your contract is reciprocal, the language covering these topics will generally be stated in the Client’s section or the Consultant’s section (i.e. we ask the Client for a deposit and we give them 30 days notice prior to an invoice being considered overdue).
2. Draft a contract. Don’t try to pull a contract off of the web and just fill in the blanks. Each contract should be customized for you based on responses to the issues in paragraph 1. If you have a superior drafting skills, you may be able to do this yourself. Otherwise, it’s best to have an attorney draft the contract for you.
3. Execute the contract. If you’re working with an attorney, your attorney can draft the contract and then execute the agreement yourself. Regardless of whether you wrote the contract yourself or had it prepared by an attorney, review it with the Client before executing the document. You should understand everything in the agreement prior to signing and returning it to the Client.
Web Design Contract Templates and Resources
Pre-written web design contract templates can provide a convenient starting point when it’s that time of year again, but they can come with some serious caveats.
While using a readily available template is much better than working without one, a contract template developed for web design isn’t much good if it’s for an entirely different line of work. You’ll want to be sure that the template you choose addresses the concerns typical in the type of work you do. Further, there are many online resources for templates or forms you might use that could be of questionable pedigree.
Additionally, a template takes the place of a written agreement; therefore, you should not simply copy it word for word and hand it to your client. Ideally , you should fill in the blanks, make edits as you see fit, and then import and export portions of text either from your old contracts to the new contract or from your new contract to provide appropriate definitions.
A good strategy is to start with a good boilerplate template and then over time, as you use it for new contracts and/or renewals, to customize it more toward your own flavor of how you do business, by removing less relevant language or adding more details to the areas that really matter to you. A good source for templates is Nolo. Some universities even have free samples or templates online. A good broker like adjusterpro.com might have a basic contract sample for you as well.
Legal Issues to Consider for Web Design Contracts
Ensure that your contract has been reviewed by an attorney. We are not talking about a law firm partner, but an attorney that does not work on anything other than web design contracts and protecting intellectual property rights in websites. This will help ensure that the contract has been reviewed by someone with specific web design contract experience, and ensure that it protects you to the fullest extent possible. Plus, having someone who is experienced in reading and writing contracts review it ensures that it makes sense. And then take it even further by having the contract read by both parties before signing so that any questions are asked ahead of time.
If you are developing a custom website for a Canadian company and your company is based in the United States (or vice versa), then having the governing law provision provide that in the case of a dispute with the contract, the laws of jurisdiction where your company is located governs will be acceptable. However, if your company is an American company and is developing the site for a US-based company, then you want to make sure that your governing law provision provides that in the event of a dispute regarding the agreement, the state and federal courts where your offices is located are the only ones that can hear the dispute. If it needs to be a state court, then a Superior Court or a Court of Common Pleas is the correct state court. Additionally, though we recommend specifying that the governing law is to be the state and federal courts where your office is located, if your office is in a jurisdiction such as Las Vegas, Nevada, or Miami, Florida, and you have not registered your company to do business in those states, then that may be more difficult.
Among the things that our contracts contain clauses about is confidentiality, non-competition, non-disclosure, etc. Odds are that the client is going to use the real version of the contract for the first project, and all subsequent projects will use a contract that is accepted via email or electronically without a physical signature, so the contract should at a minimum contain protection against competition. Be aware that in some jurisdictions, such as Florida, non-compete clauses after a certain period of time are not enforceable, so be sure to check the jurisdiction to determine for how long after the design project is completed do you want to prevent this client from competing against you.
Negotiating a Web Design Contract
The details of a web design contract can be pretty basic – at least there is no ambiguity there. Or, they can be as complicated as you can imagine, and at times even more so. The question is: how do you negotiate favorable terms in a web design contract? The answer to that is the same as in any other negotiation. You make your value proposition ring true, and make sure you agree on every last detail before any money changes hands, and certainly before delivery. Let’s not forget about that pesky Termination clause, because if it’s not in your interest, you can expect trouble later on. Check these out among other key negotiating points:
• Terms – Is it "net-10," "net-15," "net-30," or some other term? Make sure you get it right, and that everyone agrees to the period.
• Rate – So, what will you be paid? If you’re a designer or developer, you might want to stick with hourly rates with time and expenses because most websites are open-ended and there’s no telling how many hours a project may take .
• Payment Schedule – Will you expect a retainer, an up-front fee, payments on certain milestones or when the job is completed? Make sure you get it, and especially if you are just starting out.
• Product – What are you actually delivering? Are you getting a printed design, a link to a website, both? You need to know up-front what you’re supposed to be handing over.
• Rights – This is the big one for both sides. For the client, who owns the rights? Will it be a work for hire (that means it’s your client’s property) or not? The control also comes down to ownership of source code, resale of the work, and re-use (i.e., can you use the work for future clients)?
• Termination – The biggest piece of the puzzle. Make sure you’re comfortable with the terms if you should need to terminate the relationship, and vice versa.
There’s a lot that both designers and clients will need to pay attention to in these negotiations, rest assured that going in prepared will help you.