Legal Guide for Web Developers, Website Designers and Coders

Last updated: 11 October 2021

Legal Guide for Web Developers, Website Designers and Coders – This legal guide is for professionals who design and develop websites for Australian clients. These professionals are typically called web developers, website designers or freelance coders. If you design or develop websites then this guide is for you and covers:

  • Protecting your design, development and coding work
  • Selling your website services online, and
  • Structuring your business optimally

Alternatively, if you provide graphic design services, we have a separate legal guide especially for you: Legal Guide for Graphic Designers

Legal issues covered in this guide

Click on any of the questions below to jump to that section of this legal guide.

If after reading this guide you still have a question, get in touch as we’d love to keep adding your questions to this comprehensive guide.

Protecting Your Web Dev Work

Who owns a website design once it is completed?

It depends. You may own it or your client may own it. It will be a question of what was agreed between you and your client when the project was initiated and what Terms & Conditions apply to your relationship.

If you don’t have a written agreement with your client, ownership of the website design may be ambiguous. The circumstances of the project and the relationship between you and your client would have to be interpreted – and in a worst-case-scenario, decided by a court. When any professional ‘creates’ any work, under copyright law, they immediately own it. However, if you are paid to do so, depending on your contract, this may automatically be licensed to your client upon payment.

If you were engaged by the client through a freelance website like Upwork or design competition website like 99designs, then ownership of the design would be determined by their Terms & Conditions. In the case of 99designs, full ownership of the design is transferred to the client once final payment has been made and the terms are clearly laid out in their “Design Transfer Agreement”.

We recommend that you always have a signed agreement (Web Design Agreement) with your client that clearly spells out ownership of the final work and the associated rights that accompany that ownership.

Who owns any custom code that has been developed?

Again, this will depend on what was agreed between you and your client and what Terms & Conditions apply to your relationship.

If it is important to you that you retain ultimate ownership of any custom code so you have the right to re-use it, even after handing it over to a client, then you will need to have Terms & Conditions that makes this clear. The code could be provided to your client under a license – permitting them to use the code in accordance with the terms of that license – but not actually transferring ownership of the code.

Copyright protection is free and applies automatically when ‘work’ is created.

The HTML and CSS you develop is protected by copyright and you own the copyright. In addition, if you created any photographs, artwork or logos for the website, then these may also be protected by copyright.

Obviously, if you copied somebody else’s creative work – for example, downloading an image from the Internet – then you will not own the copyright to this work!

How can I protect my web designs and code from being copied?

There are a few practical steps that you could take to protect your web designs and code from being copied:

  • Encrypt your code and add extra security layers
  • Disable the copy/paste functionality on the website
  • Place a Copyright Notice prominently on the website, etc.

Then actively pursue any unauthorized copying of your designs or code. Start with Google searches for unique text, images or code snippets that you have used and, if necessary, use a professional service. Once found, ask them to take down the copyrighted material and lodge ‘take down’ requests with Google.

What should I do if my web designs or code are copied without my permission?

Firstly, track down the owner of the site and make contact with them. The owner’s information will usually be available somewhere on the site (or use a service like WhoIs).

In some cases, owners simply may not realise that the site has been copied. For example, they might have hired somebody to build the website for them and might be unaware that the site has actually been copied.

This actually happened to us at Legal123! (and we got the whole website taken down)

If the owner does not respond to your initial contact, or refuses to take the site down, then you may send a more stern message, notifying them that if they do not take the site down, you will be taking legal action and outlining the repercussions that they may face.

If that still does not work, then you may consider issuing a “takedown notice” to the relevant Internet service provider. This is a notice, provided in accordance with Schedule 10 of the Copyright Regulations 1969, requesting the Internet service provider to take down the infringing content. Upon receiving a takedown notice, the Internet service provider will remove or block access to the site and then issue an infringement notice to the offending party.

Don’t send false or misleading takedown notices – this may be a criminal offense and you may face civil penalties or have to pay compensation. So if you’re in doubt, seek professional legal advice.

Web Design Agreements

What is a Web Design Agreement?

A Web Design Agreement or Web Design Contract is an agreement between a web developer and their client. It is a very important document and sets out the entire scope of the website design project, the relationship between the web designer and client, timing for phases, payments and completion and other important rights and obligations of each party. Having a professionally drafted Web Design Agreement can help a website design project be successfully completed as well as help avoid any disputes.

Should I use a Web Design Agreement with my clients?

Yes, absolutely!

Problems arise in a website design project if there are misunderstandings with variations, timing or ambiguities between you and your client. A professionally drafted Web Design Agreement will set out these matters clearly and ensure you and your client understand your various responsibilities and undertakings.

Without a sound Web Design Agreement, you significantly increase the probability that you will encounter a dispute with your client down the track.

What are the risks of not using a Web Design Agreement?

There are many. But at a basic level, the risk is that there are misunderstandings between you and your client in relation to the project. For example:

  • You may discover that you and the client had different ideas about how much or the scope and exact work you would actually undertake.
  • The client may change their mind and may demand extra work or numerous variations from you, which goes beyond the scope of the original project as you understood it.
  • The client may dispute your fees, method of payment or refuse to pay you.
  • The client might suffer a loss as a result of the work (for example, the website is not finished by the deadline date and potential revenue is lost). Without appropriate limitation of liability clauses, you could become liable for these losses.
  • You may inadvertently give away ownership of your code and designs.
  • There may be a misunderstanding about timing for finalisation.

In many cases, well-meaning parties may end up in a dispute, simply because they failed to discuss these issues upfront and later discovered they had misunderstood one another. An upfront discussion about the terms of a Web Design Agreement can ensure that both parties are on the same page regarding the project.

What clauses should my Web Design Agreement include?

A well-written Web Design Agreement should include the following clauses:

  • Services to be provided and specifications of the project (e.g. content management system, theme or template used, custom code required)
  • Project timeline and any deadlines
  • How the work is to be delivered with specific output formats
  • Responsibilities of the client (e.g. to provide copy in a timely fashion)
  • Total fees, any milestone payments and method of payment
  • Ownership or licensing rights over the final work, code and images
  • How the client may request amendments and any additional fees
  • Dispute resolution, particularly in the event that the client does not think the finished product meets the brief
  • Confidentiality of any client material provided or code provided
  • How the contract may be terminated
  • Limitation of liability and disclaimers, etc.

Unless these aspects are clearly stated in your contract, you could find an ugly misunderstanding between you and your client!

Protecting Custom Code

Should I license the custom code I develop to my clients?

The question of whether you should license your custom code to your clients is a matter of personal preference.

If you need to be able to reuse the code for multiple clients, then you will need to license it, rather than transferring ownership absolutely. This means that you own the code, but your client is permitted to use it in accordance with the license.

In some cases though, clients want the freedom to be able to do what they like with the website and code you’ve developed for them. For example, they might want to sell it to a third party or to modify it at some point in the future. Therefore, they might insist on owning the code outright. In this case, you no longer own the code and are not able to reuse any parts of it for other clients.

What is a Custom Code Development Agreement?

A Custom Code Development Agreement is a contract under which a web developer agrees to provide custom code to a client.

The Agreement should include a detailed description of the code, ownership and intellectual property rights, timelines for production, pricing and payment schedule, warranties, details about any ongoing maintenance arrangements, etc.

Should I license the websites I design to my clients?

This is an option, however, it’s not very popular. Most clients want to “own” their website, be able to sell them to a third party at a later date and not be tied into a perpetual website maintenance contract.

However, if you do choose this option, make sure your client knows exactly what they are agreeing to. If this is not clearly understood by your client it could easily look like an abusive agreement, that a client signed without proper knowledge.

Selling Your Website Development Services

How do I ensure no disputes over services provided or the project terms?

59 percent of small businesses in Australia do not have a website

Most disputes arise, not through any malicious intent, but through the parties simply misunderstanding one another. A well drafted Web Design Agreement can help you to avoid these misunderstandings.

Your Agreement should accurately outline how you will provide your services and what your client should expect. It is important that you understand what the Agreement says, how it works and that you actually provide your services in the manner set out in the contract.

It is also important that your clients understand the terms of your Agreement. Clients may find it helpful if you provide a summary explanation of your key terms.

What happens if there is a disagreement on progress or quality of the work?

You should look at your contract to see what it says about how these disagreements may be resolved. A good contract will explain the required progress and quality of work, and will make it easy to determine whether or not you are in breach of the contract. It should also explain how such disagreements should be resolved.

If a dispute has arisen and you do not have a signed Web Design Agreement, then the procedure will be more complicated. Review all email correspondence, meeting and telephone notes to clarify where the miscommunication has taken place.

What happens if my client and I can’t resolve an issue?

Seek legal advice immediately.

There may be a number of ways in which to address the issue, including mediation. A good lawyer will be able to advise you about your options, so that you are able to embark on a course of action which is most likely to lead to a positive outcome.

How do I collect overdue web design fees from clients?

Many failures to pay occur through genuine oversight or misunderstanding. So before diving into any aggressive debt recovery procedures, you should consider whether this could have occurred in your case.

First start with a gentle payment reminder to your client – in many cases this is enough to prompt your client to make payment. If the client still fails to pay your fees, then consider issuing a Letter of Demand. This is a formal letter notifying the client that you will be taking further action if they do not make payment promptly.

If that does not work, you may consider referring the matter to an external debt recovery agency. Lastly, you may consider commencing legal action against the client.

Can I sub-contract out web design or coding to another freelancer?

This depends on the terms of any agreement between you and your client. Some contracts permit this, while others do not.

Importantly, if you do engage sub-contractors or freelancers, then you should make sure you have a Contractor Agreement with them. This should cover: ownership of the work, failing to complete the project, client confidentiality, liability in the event that the contractor makes a mistake which costs the client money, etc.

Website Legals

What Terms and Conditions should my website include?

Normally your website is for your visitors. So it should include a Privacy Policy, Website Disclaimer and your general Website Terms & Conditions.

Your specific web development terms (i.e. your Web Design Agreement) are usually provided to your clients only. You can still publish them on your website but, “hide” the link and only provide it to clients when they engage your services.

You need to make sure that your website legal notices (i.e. Privacy Policy, Website Disclaimer and Terms & Conditions) are easily found and not hidden from website visitors or potential clients. The Internet norm is to link to these notices in the footer of your website – and make sure they are available from every page of your website.

Should my website include my Web Design Terms and Conditions?

This is up to you. Your Web Design Agreement is just between you and an individual client. This is different from your Website Terms & Conditions, which apply to anyone who visits your website.

One way or another, when a client engages you, you will need to provide a copy of your Web Design Agreement to your client and have the client agree to these terms.

From a practical perspective, you can either provide a “hidden” link to your Agreement for your clients to agree to online. Or simply email a copy of your Web Design Agreement in PDF format for your clients to sign and send back.

In previous sections of this feature article we’ve highlighted the importance of having:

  • A Web Design Agreement with your clients, and
  • Privacy Policy, Website Disclaimer and Terms & Conditions for your website

If you have employees in your web development business, you should consider having the following:

  • Employment Contracts with each of your employees that include well written confidentiality and non-compete clauses, and
  • Employment policy documentation, including Employee Handbook, OH&S Policy and Social Media Policy

If you hire freelancers or sub-contractors, then you’ll need:

  • Contractor Agreements with each of your freelancers that also include well written confidentiality and possibly non-compete clauses

Structuring Your Web Development Business

What business structure should I use for my web development business?

In Australia, there are generally 4 options for structuring your business:

  • Sole trader
  • Pty Ltd Company
  • Partnership, and
  • Trust

The best business structure for you will depend on your personal circumstances – and getting this decision right is very important. So talk to your accountant about the pros and cons of each option. Here’s a quick summary of each option.

Being a Sole Trader is the simplest and least expensive option. Designed for business owners who are the sole proprietors of their companies, this structure doesn’t give you much protection if things go wrong. Your personal assets are unprotected from any claims arising from your business.

Incorporation (i.e. forming a Proprietary Limited Company, Pty Ltd) effectively makes your business a separate legal entity from you. This structure involves quite a bit of paperwork and can be more expensive to maintain but it offers your personal assets protection from liability. Only your Company assets are at risk in the event of any legal actions and Company debts.

Creating a Partnership allows you to go into business with multiple people and share income. Partnerships are easier and less expensive than Companies to set up. However, all partners together are personally responsible for business debts and actions against the Partnership. And each partner is individually liable for debts incurred by the other partners. This means you have unlimited liability, unlike a Company structure.

A Trust isn’t an organisation at all, but instead a legal structure to hold assets. For example, you might set up a Trust to hold your business assets, then appoint a Trustee to manage them. Typically, the Trustee is a Company and the Trust provides asset protection and limits liability from operating the business. Trusts are very flexible for tax purposes. However, a Trust is a complex legal structure and establishing a Trust costs significantly more than a Sole Trader or Partnership.

For more detailed information on each of these business structures, see our feature article: How to Choose the Right Business Structure in Australia.

Just because you set up a Pty Ltd Company or registered your business name with ASIC, this does not protect your brand name if it is not trademarked. Any business can use your brand name. The only way to protect your brand name and restrict its use, is to register it as a trademark with IP Australia.

This concept is one of the most misunderstood aspects of starting or running a business. And business owners frequently contact us because someone has started using their brand name – which they thought they owned!

For more detailed information on the process and costs of trademarking, see our feature article: How to Trademark Your Business Name and Logo.

Should I register my web development business for GST?

If you expect that your website development business is going to generate more than $75,000 per year in revenue, then you will need to register for GST.

Do web developers or coders need professional liability or business insurance?

Evaluating whether you should take out insurance is a complex business and personal decision. Here are some of the risks in running your website development or coding business that you might want to mitigate with professional liability or business insurance:

  • You might inadvertently use some copyrighted material
  • There might be one or more errors in your code, which results in harm to the client or their business
  • You might be accused of plagiarism, piracy or copyright infringement
  • Somebody might claim you have committed slander or libel against them
  • A client might accuse you of negligence or of errors in your work, and might claim that this has harmed the client’s reputation and cost their business
  • You might suffer a security breach and data loss
  • If you have a physical office or showroom somebody might be injured on your property
  • Your equipment might be damaged or stolen
  • If you have employees then one of them may suffer a work related injury

Exactly what forms of insurance you require will depend on the nature and structure of your business. You should discuss your situation with an insurance broker as well as getting legal advice.

We hope you found this Legal Guide for Web Developers, Website Designers and Coders helpful.

About Vanessa Emilio

Vanessa Emilio (BA Hons, LLB, ACIS, AGIA) is the Founder and CEO of Legal123.com.au and Practice Director of Legal123 Pty Ltd. Vanessa is a qualified Australian lawyer with more than 20 years experience in corporate, banking and trust law. Follow this link to read the full bio of Vanessa Emilio.