Before I started designing Web pages, I retained an attorney to create a contract. Even though I am a third- year law school student, I still needed outside assistance because the legal issues for the Internet are complex and require specialized knowledge.
How do you find a good attorney? I talked to my intellectual law professor, who referred me to an attorney. Since professors at law schools are more than glad to talk to you, and know who is qualified to provide advice, you should explore this option.
My attorney is expensive, charging $225 per hour. However, this is worth it—especially if you avoid a lawsuit (which can destroy your business).
The following are important clauses that my attorney recommended. This information is not intended as a full contract and, as stated above, you should seek legal counsel.
The Rights and Duties of the Parties
The purpose of a contract is to specify what both parties should do. This allows for predictability and, in many cases, prevents future conflict.
In your contract, make sure you specify the pricing and the timetable of the project, and define the specifications so you'll know when the project is finished. This is usually the result of negotiation and thus does not require an attorney; you never want an attorney to make your business decisions.
You should also make sure you retain the ownership of your code, programming ideas and design layout. After all, this is the product of your hard work and talent.
Customer will provide Web Design Co. (WDC) with the text and visual images that will comprise the home page. As against Customer, WDC agrees that it acquires no rights to such text and visual images by virtue of its programming and consulting services. All other intellectual property rights in the home page and the work performed by WDC, including without limitation, software copyrights, software patents, and trade secrets, shall be the sole property of WDC. Nothing contained in this agreement shall be construed to convey any intellectual property rights to Customer. Customer agrees to execute any documents necessary or desirable for confirming WDC's ownership of such intellectual property rights.
Since the above paragraph creates ownership in the Web page to you, you then must provide your customer with a license to use it. This license allows the customer to use the page on one server. In other words, the customer cannot mass-produce copies of the code and layout onto other sites.
With regard to WDC's intellectual property rights in the home page, WDC grants a permanent royalty-free, non-exclusive license to use such intellectual property for the purpose of a single home page to be resident on a single server.
Protection From Copyright Lawsuits
Essentially, WDC sites are areas of information. However, information such as pictures, movies, sounds, etc. is copyrighted. If you use someone else's copyrighted material, then you are liable for damages.
Suppose you construct a WDC site for Company X. This company, unfortunately, puts material on the site that violates copyright law (perhaps it puts three chapters from a John Grisham book on it). Are you liable, even though you are only the designer? Well, according to copyright law, liability extends up and down the chain of distribution. So yes, you are liable.
One suggestion is that if you consider material to be copyrighted, you should request that the company provide you with a form that indicates that the holder of the copyright has granted permission to use the material. If the company does not, then go to another customer. The legal implications of a copyright suit are too costly.
The following is a clause that, in the event of a copyright violation, requires the company to pay for your damages and legal fees. Then again, this clause is good only if the company has enough money to pay for these expenses.
Customer warrants and represents that it has the full right, power and authority to use all information or material that it has provided to WDC including, without limitation, the above-referenced text and visual images. Because such information and materials will be transmitted, published, and displayed to third parties, customer agrees to defend, indemnify, and hold WDC harmless against all claims, suits, costs, damages, judgments, attorney's fees, settlements or expenses incurred, claimed, obtained or sustained by third parties, whatever the cause of action including, without limitation, defamation, misappropriation, invasion of privacy, intellectual property infringement, or otherwise, whether such claims are meritorious or not, with regard to said home page.
Because of the nature of Web sites, the likelihood of being sued for a design defect is remote. But, since you are dealing with company information and possible online orders, the potential for legal complications arises.
The following clause basically waives liability to the extent of the price of the Web design project:
In the event that any work performed by WDC, including the home page, is found to be defective due to fault of WDC or for other reasons, WDC's liability shall be limited to the refund of the moneys Customer paid to WDC. Customer expressly disclaims and waives the right to any additional damages including, without limitation, direct, consequential, punitive, or any other kind of damages.
No contract can completely prevent a lawsuit; individuals and companies file meritless lawsuits every day. In your contract, you can specify the law to be used if a lawsuit arises, as well as the forum for the litigation. After all, you do not want to go to court in another state.
Here's an example:
This Agreement shall be governed by the laws of the State of California and Customer further consents to jurisdiction by the state and federal courts sitting in the State of California.
Make sure your contract represents your full agreement. You do not want the other party to bring in other communications to amend your contract. This is called an integration clause and can save you some potential headaches:
This Agreement constitutes the complete and exclusive agreement between WDC and Customer with respect to the subject matter hereof, and supersedes all prior oral or written understandings, communications or agreements not specifically incorporated herein. This Agreement may not be modified except in a writing duly signed by an authorized representative of WDC and Customer.
Severability clauses are important for Web design contracts, because the law of the Web is new and evolving. Suppose you have a clause in the contract and after a year, a court rules that such clauses are not enforceable. Does this mean your whole contract is void, or is only the clause void? Well, a severability clause will save the rest of the contract.
Here's an example:
If any provision of this Agreement is held invalid or unenforceable by any court of final jurisdiction, it is the intent of the parties that all other provisions of this Agreement be construed to remain fully valid, enforceable and binding on the parties.
With the key clauses above, you can then go to an attorney and have him/her construct a contract. Because you already have an outline, your attorney will not have to spend as much time and you will thus save legal fees. Once this is done, you can do what you really want to do: make money designing Web pages.
KUESTERLAW - The Technology Law Resource
Provides extensive information on intellectual property issues (including information on Internet law).
Legal Information Institute
Provides information on intellectual property issues.