Category Archives: Internet

Website Development Contracts (and tips for software development deals too) 

Many companies do not have the capabilities, resources or desire to produce a website.  They need help with their website efforts.  They must necessarily rely on independent website developers. 

Companies (and individuals) often move forward with an independent website developer without a written contract to govern the relationship.  I’ve been asked to get involved as a lawyer in numerous website projects gone wrong in which the only signed writing is a vague set of specifications and a bottom-line price. 

Before hiring a website developer, the company should first develop a clear vision of what the website will do.  A company that knows what it wants typically gets it.  Open-ended or vague specifications do not benefit the ongoing relationship at all.  Someone is generally unhappy when the website project is ill-defined. 

The starting point for developing a clear vision for the website is to consider what the website will do.  Does the company merely wish to use the website for advertising? Or does the website sell a product or service through the company’s online catalog?  Will users of the website generate the content—like what happens on Pinterest, Facebook or YouTube?  Knowing in advance what the website will do shapes the agreement between the company and the website developer.

A website development agreement may, and probably should, address the following:

  • Services. The agreement should describe the scope of services that the developer will provide.  The company may want detailed schedules that describe the work to be done and the time frame for delivery. Some contracts or incorporated exhibits have layouts of the entire website.  I saw one recent contract in which the layout of each page was put into a PowerPoint presentation and attached to the agreement.     
  • Cost. The project could be billed hourly or by the task.  Some deals say that the developer gets paid at the conclusion of certain periods of time—like the end of each month.  When I represent businesses that want a new website, I generally draft the agreement so that payments are tied to specific objective milestones, and not the passage of time.  I have generally found that such projects move forward faster.  
  • Intellectual property ownership and protection. The agreement should specify who will own the website content.  Work made for hire language that addresses the critical issue of copyright ownership may be appropriate.  The issue of ownership is often overlooked to the frequent detriment of the company.  Generally, in the absence of a written contract providing otherwise, independent website developers (independent contractors by definition) own the intellectual property they bring to a website even if the company pays for the website work.  A detailed discussion of the intellectual property issues involved in the typical software and website development deal exceeds the scope of this article.  The attorney who drafts website development deals will want to have a good understanding of the relevant issues.     
  • Technical considerations. The agreement may set forth the software the developer will use.  Websites need to be readable and glitch-free on all of the major Internet browsers, including Explorer, Chrome, Firefox and Safari.  Websites should be smartphone-friendly too. 
  • Advertising and promotion. The agreement may provide that the developer will promote the website, place advertising on the website, or both. Many people use search engines to find websites, and the agreement could obligate the developer to list the website with search engines or perform tasks that make the website “search engine optimized.”  The website developer may want to include an acknowledgement on the website to highlight its work.
  • Hosting services. Some website developers possess the capability to host the website. If so, the agreement should set forth the terms of the hosting arrangement.
  • Updates and new features. Companies often wish to change the content, functions and features available on their websites. If the website developer will retain responsibility for updates and modifications, the agreement should set forth payment terms and schedules appropriate to the circumstances.

These are just a few of the terms a company may want to include in the website development agreement. Ultimately, the agreement should be tailored to the company’s specific needs and preferences and anticipate the issues that may arise during the life of the website. 

FTC Publishes New Online Advertising Disclosure Guidelines

The new FTC guidance .com Disclosures: How To Make Effective Disclosures In Digital Advertising can be found by clicking here.  Among other things, the guidelines address the application of the clear and conspicuous disclosure rules to online advertising.  The guidelines acknowledge the multiple ways that consumers access internet content and the expanding use of handheld devices and smartphones with small screens.  Regardless of the device used by the consumer to access the content, disclosures should be prominent (not buried) and in appropriate proximity to the relevant claim.  
Many websites put disclosures in hyperlinks.  The guidance stresses the importance of appropriate labels for such hyperlinks.  
The FTC guidance should be required reading for online advertisers.    

Dot-com, Dot-net and … Dot-anything

For the last two decades, there have been a relatively small number of generic top-level domains (gTLDs) on the Internet. A gTLD is essentially the part of the domain name after the dot. But the number of gTLDs is about to increase dramatically.  On June 20, 2011,
the Internet Corporation for Assigned Names and Numbers (ICANN) announced that beginning on January 12, 2012, companies and organizations will be able to register virtually any gTLD they choose – for a price. The initial registration will be $185,000, with an annual renewal fee of $25,000.

For details about the implications of this change, read the article “New Top-Level Domain Names Available”.