What is a Website Contract?
A Website Contract is an agreement between a website owner and an independent contractor to provide website or online business-related services. The agreement should detail the terms and conditions under which the services are provided to the website owner. A Website Contract should be used with an independent contractor, not an employee.
Why would I need a Website Contract?
A Website Contract provides a number of benefits, for both the website owner and the service provider, including:
- Detailing the outputs or outcomes required, project timing and terms of payment
- Clarifying expectations between the website owner and service provider
- Protecting the ownership of the completed work and any confidential information that is shared with the service provider, etc.
What type of services should a Website Contract be used for?
You can contract specialists to do almost anything you need on your website. For example:
- Website design, graphics and multimedia
- Website or application programming
- Search Engine Optimization (SEO) to help a website rank higher in the search engines
- Online business consulting and marketing services, etc.
And in each case you can use a Website Contract to specify the deliverables, due dates, deadlines, payment schedule, etc.
What happens if there is a disagreement on the progress or the quality of the work?
The Website Contract specifies that in the event that progress on the project or the quality of the work is not meeting expectations the website owner may inform the service provider to cease work and only pay for the work completed to date. The website owner will own the IP and all work done up to the time the project ceased.
This provision in the contract does not mean that the website owner can choose some of the completed work and only pay for that part but requires fair payment to be made for work completed. In addition, a website owner cannot change their mind arbitrarily but they need to communicate effectively with the service provider if they are not happy with the results to-date.
What happens if the website owner and service provider can’t resolve an issue?
In the event that the website owner and service provider have a genuine dispute about the quality of the work, there is a clause in the Website Contract requiring both parties to submit to an independent, specialist arbitrator who will decide the matter. In this case, both parties agree to abide by whatever the arbitrator determines and pay their own costs.
How do I ensure there is no dispute about services provided or the project terms?
The best way to try to minimize misunderstandings and ensure clarity of expectations between both parties is to clearly define the project or services in the Website Contract. The more detail a website owner provides to the service provider, the more likely it will be understood and delivered.
Creative design elements can be particularly tricky to communicate effectively. If you are the website owner, it is best to give as many photos, pictures and examples as you can find to the service provider. In addition, ensure that the service provider knows that this is all part of your idea for your business and forms part of the confidential information that is not to be disclosed to or used for other clients. This will help ensure your idea is protected.
Where or in which Australian States is my Website Contract valid?
The Australian States where the Website Contract is valid can be specified in the “Schedule” that forms part of the agreement. It is recommended that your State be specified as the jurisdiction. Otherwise in the event of a dispute, if you have not specified your State, you may have to pay for advice from someone who is familiar with the jurisdiction of your service provider and possibly incur further costs for travel and dispute resolution in that State.
How do I sign or “execute” a Website Contract?
If the website owner and service provider meet in person, both parties must sign 2 copies of the Website Contract and exchange them (i.e. website owner and service provider sign two copies and each keep one). However, if a face-to-face meeting is not possible, the next best alternative is for one party to sign 2 copies of the Website Contract and post them both to the other party. The other party then signs both copies and sends back one of those copies. If this is not possible, then one party could fax their signed copy of the Website Contract to the other party who then signs it and faxes it back. As a last resort, the Website Contract can be emailed between the 2 parties with an accompanying message agreeing to the terms. This is the least satisfactory arrangement and is not recommended.
Does a Website Contract need to be witnessed?
No, a Website Contract does not need to be witnessed. However, both the website owner and service provider need to be over 18 years of age for the agreement to be valid.
Does a Website Contract need to be in writing?
Yes. It is recommended that you use a formal Website Contract to clarify expectations between the website owner and service provider. In addition, it is recommended that verbal communication is confirmed with an email to avoid any misunderstandings.
What risks are there in not having a Website Contract?
There are a number of possible risks arising from not using a Website Contract, including:
- Disputes over services provided
- Disputes over non-payment
- Disputes over terms of payment
- Loss of ownership of confidential information, business ideas or brand identity
- No indemnity for the website owner against the service provider’s actions, etc.
Do I need to get legal advice before negotiating a Website Contract?
No. Most Website Contracts are very straightforward to negotiate between website owner and service provider. However, if your circumstances are complex or large sums of money are involved it is recommended that you get legal advice.