Understanding website contracts more effectively

A number of issues will be encountered by a company when setting up and operating a website, and these issues will need to be addressed in the contractual arrangements that are necessary in order to establish the company’s internet presence, whether the website is a fully interactive e-commerce site or comprises only a simple promotional statement about the website owner. 

In addition to the key legal and commercial issues that arise in relation to the specific contracts which need to be put in place when setting up and operating a website, there are also a number of practical drafting issues to consider. These issues are generally considered and negotiated from the perspectives of both of website owner and the supplier of website services or content, except in the case of the website terms and conditions and linking licences, which are usually standard terms drafted by the website owner for publication on the website and are not normally intended to be negotiated. 

The first issue for a company wishing to establish an online presence is how the website should be designed and developed. Very few businesses have the required resources and / or skills that are required to undertake this work internally. Instead, it is commonplace for a company to instruct a web designer / web design company to provide these kind of resources. If a company already has some internal design skills, it may only require programming time, in which case this could be obtained by some form of a "people-shop" agreement. If, on the other hand, the company does not possess any of the relevant technical, design or project management skills, a more detailed website design and development agreement will need to be agreed with a company that offers website design services. 

The objective of a website design and development agreement is to legally ensure that the company gets the website that it requires by imposing a legal obligation on the designer to create the site according to the company's specifications. The legal agreement is therefore not significantly different from a general software development agreement for an IT system. It is there to give clarity and understanding to the works due to be undertaken and delivered.