Web Sites And Widgets

Businesses of all sizes and types should not buy Web sites like a commodity.

Though it's true that many smaller firms have Web sites, good site design and coding require too much skill and creativity to risk using the lowest-cost provider.

Instead, a successful Web-site development contract requires business oversight by the proper personnel ' a team of them ' just as the negotiation of a joint venture or other complex deal does. For instance, the computer administrator certainly must review technical specifications, but that person may not have the contract-negotiation skills to ensure that the site achieves its business goals, and at a reasonable price. And that's where another person with another salient type of oversight expertise should enter the fray.

Fees, Fees, Fees: Always A Major Concern

Perhaps most important for a small or start-up firm, the business owner should examine contract fees, as in the case of purchasing any service and prior to signing any contract. Investing in Web site development is no frivolity; indeed, it could, in more ways than one, make or break a business' success.

Good developers, like other professionals, usually work by the hour, rather than for a fixed fee. But no firm can afford to allow its Web-site design agreement to become a blank check to the designer.

First, there will be design alternations, so clients should ask whether changes made to the initial design, or done to correct problems after each inspection, will cost extra. The cost of normal site updating, to keep the site fresh, can be controlled by training employees to do it in-house. Changes affecting site functionality, however, usually require additional fees (a good reason to review the site plans carefully, before design work starts). Site hosting also usually costs extra.

Other costs may be hidden. Cutting-edge software, for instance, may impose additional third-party license fees, and require new, better, servers and other equipment.

Costs will also depend on a fundamental design choice – to build from scratch, or to use a packaged design. Businesses that want a unique site may have no alternative to commissioning a new design. That course, however, will generally cost more ' without any cap ' and take longer.

Not Just Fees: Think The Contract Through

Of course, a Web-site design agreement involves much more than fees. For example, start with even the most technical document, the specifications (often referred to as the statement of work or SOW). Usually an exhibit to the contract, the SOW describes what the developer will make the site do. Often, executives turn the SOW over to the technical specialist unread, because it appears too complex.

That lack of attention can be a fundamental mistake. Contract writers must ensure that the basic site description specifically and unambiguously includes what they want the site to accomplish. Otherwise, much effort and expense may be wasted before the designer is told to change a particular approach. Legally, that exhibit will be critical in a lawsuit if the site doesn't work. A Web-site development contract typically includes a promise ' a warranty ' that the site will conform to the SOW. Unless the judge, who may know nothing about your company or about Web-site design, can clearly compare what the site was supposed to be (the SOW) to what was delivered, he or she will not be able to find any default by the developer. Therefore, the SOW must provide enough details to let the court make that comparison.

But even with details, that comparison may be too subjective for a court. Instead, many contracts rely on detailed timetables for site completion ' and client inspections of each delivery. If the site turns out differently from what was expected, then that problem can be fixed at an early stage, before it's too late ' or expensive ' to do so.

And Who Owns It?

Creation of a new site also highlights the issue of site ownership. Businesses investing substantial sums of money in an innovative site often want something more definite than simply a contract right to use the code. A firm that has paid dearly for a design that provides a competitive advantage should not expect it to be offered for sale to anyone, let alone to a competitor. But many developers work from basic templates. They cannot give clients anything more than a right to use the design, or they would be out of business. For the same reason, they cannot allow a client to resell the site design to others, even if the designer gets a royalty.

While established developers rarely limit their right to reuse a common design for other clients, they might agree not to create a similar site for a client's competitor. If the developer has been well compensated in hourly design fees to build a new site, however, then the developer might be willing to assign the copyright.

Back-up copies and code escrows also protect clients' access to their sites, without creating a fight over code ownership. The client knows that should the developer ever fail, it can get a copy of the site code, so that its investment is not wasted. For this technique to work, though, the back-up copy must be updated each time the site changes. Escrows can also be quite expensive.

(For more on escrow, see “Guard Your E-business Against Tech Pitfalls With Software Escrow,” in the August 2003 edition, and “Avoiding Technology Pitfalls: How Software Escrow Can Protect Development Projects,” in the November 2003 edition of e-Commerce Law & Strategy.)

Do Contract Diligence

Contracts, like the jobs they cover, can be complex and diverse. They can cover many other issues, like claims that parts of the Web site were stolen from others, or the developer's publicity rights. The developer should also indemnify the client against any ownership claims that independent contractors the developer hires might make. The client, on the other hand, should insist that no secret code allows the developer to shut the site down over a dispute (typically about fees).

Keep in mind, too, that some points may truly be nonnegotiable. Most business contracts today generally, including those for Web-site design, impose strict limits on the developer's liability to a client.

Hobby Web sites can be built in an afternoon with FrontPage or other software. A successful commercial site, in contrast, combines the creativity of a skilled design professional, and the insight of an executive with marketing and sales goals. Together, they can write a contract that will allow a company to implement a site that can help the firm satisfy its business objectives on reasonable terms.

Businesses of all sizes and types should not buy Web sites like a commodity.

Though it's true that many smaller firms have Web sites, good site design and coding require too much skill and creativity to risk using the lowest-cost provider.

Instead, a successful Web-site development contract requires business oversight by the proper personnel ' a team of them ' just as the negotiation of a joint venture or other complex deal does. For instance, the computer administrator certainly must review technical specifications, but that person may not have the contract-negotiation skills to ensure that the site achieves its business goals, and at a reasonable price. And that's where another person with another salient type of oversight expertise should enter the fray.

Fees, Fees, Fees: Always A Major Concern

Perhaps most important for a small or start-up firm, the business owner should examine contract fees, as in the case of purchasing any service and prior to signing any contract. Investing in Web site development is no frivolity; indeed, it could, in more ways than one, make or break a business' success.

Good developers, like other professionals, usually work by the hour, rather than for a fixed fee. But no firm can afford to allow its Web-site design agreement to become a blank check to the designer.

First, there will be design alternations, so clients should ask whether changes made to the initial design, or done to correct problems after each inspection, will cost extra. The cost of normal site updating, to keep the site fresh, can be controlled by training employees to do it in-house. Changes affecting site functionality, however, usually require additional fees (a good reason to review the site plans carefully, before design work starts). Site hosting also usually costs extra.

Other costs may be hidden. Cutting-edge software, for instance, may impose additional third-party license fees, and require new, better, servers and other equipment.

Costs will also depend on a fundamental design choice – to build from scratch, or to use a packaged design. Businesses that want a unique site may have no alternative to commissioning a new design. That course, however, will generally cost more ' without any cap ' and take longer.

Not Just Fees: Think The Contract Through

Of course, a Web-site design agreement involves much more than fees. For example, start with even the most technical document, the specifications (often referred to as the statement of work or SOW). Usually an exhibit to the contract, the SOW describes what the developer will make the site do. Often, executives turn the SOW over to the technical specialist unread, because it appears too complex.

That lack of attention can be a fundamental mistake. Contract writers must ensure that the basic site description specifically and unambiguously includes what they want the site to accomplish. Otherwise, much effort and expense may be wasted before the designer is told to change a particular approach. Legally, that exhibit will be critical in a lawsuit if the site doesn't work. A Web-site development contract typically includes a promise ' a warranty ' that the site will conform to the SOW. Unless the judge, who may know nothing about your company or about Web-site design, can clearly compare what the site was supposed to be (the SOW) to what was delivered, he or she will not be able to find any default by the developer. Therefore, the SOW must provide enough details to let the court make that comparison.

But even with details, that comparison may be too subjective for a court. Instead, many contracts rely on detailed timetables for site completion ' and client inspections of each delivery. If the site turns out differently from what was expected, then that problem can be fixed at an early stage, before it's too late ' or expensive ' to do so.

And Who Owns It?

Creation of a new site also highlights the issue of site ownership. Businesses investing substantial sums of money in an innovative site often want something more definite than simply a contract right to use the code. A firm that has paid dearly for a design that provides a competitive advantage should not expect it to be offered for sale to anyone, let alone to a competitor. But many developers work from basic templates. They cannot give clients anything more than a right to use the design, or they would be out of business. For the same reason, they cannot allow a client to resell the site design to others, even if the designer gets a royalty.

While established developers rarely limit their right to reuse a common design for other clients, they might agree not to create a similar site for a client's competitor. If the developer has been well compensated in hourly design fees to build a new site, however, then the developer might be willing to assign the copyright.

Back-up copies and code escrows also protect clients' access to their sites, without creating a fight over code ownership. The client knows that should the developer ever fail, it can get a copy of the site code, so that its investment is not wasted. For this technique to work, though, the back-up copy must be updated each time the site changes. Escrows can also be quite expensive.

(For more on escrow, see “Guard Your E-business Against Tech Pitfalls With Software Escrow,” in the August 2003 edition, and “Avoiding Technology Pitfalls: How Software Escrow Can Protect Development Projects,” in the November 2003 edition of e-Commerce Law & Strategy.)

Do Contract Diligence

Contracts, like the jobs they cover, can be complex and diverse. They can cover many other issues, like claims that parts of the Web site were stolen from others, or the developer's publicity rights. The developer should also indemnify the client against any ownership claims that independent contractors the developer hires might make. The client, on the other hand, should insist that no secret code allows the developer to shut the site down over a dispute (typically about fees).

Keep in mind, too, that some points may truly be nonnegotiable. Most business contracts today generally, including those for Web-site design, impose strict limits on the developer's liability to a client.

Hobby Web sites can be built in an afternoon with FrontPage or other software. A successful commercial site, in contrast, combines the creativity of a skilled design professional, and the insight of an executive with marketing and sales goals. Together, they can write a contract that will allow a company to implement a site that can help the firm satisfy its business objectives on reasonable terms.