E-Commerce

Website Development

Perhaps the key aspect in protecting your website from a legal point of view is to ensure that there is an appropriate agreement in relation to the website's development. It needs to be borne in mind that many of the issues that are important to the developer are of little benefit to the client and therefore may either be unsatisfactorily addressed or not dealt with at all. Web development companies are often small and have not developed a legal document acceptable to a remotely sophisticated client. In such cases it will be in the client's interest to put their own form to the developer.

Some of the issues to be considered by the client in such an agreement are discussed below.

This article focuses on the main issues to be addressed in the agreement from the client's point of view, concentrating on areas which may be contentious or require more careful consideration.

SERVICES

The most important aspect of any agreement for the provision of services is to clearly define the services which are being supplied. In a web-development contract, there can be a range of potential services apart from pure web development work. For example, the developer may also be providing some or all of the following:-

Hosting

Many small companies do not host their own website and usually the provider of hosting services will allow the client to place software and content relating to the client's website on the provider's servers which are connected directly to the internet. The provider is responsible for managing those servers and maintaining the connection. Although this scenario is attractive to the client from a cost perspective this is a cost efficient solution, it can raise questions regarding the performance of the site and the bandwidth which is made available. These are issues which should be addressed in the contract.

Co-location is also worth considering. This is where the customer has his own servers but locates them at the providers facility. Here the provider is responsible for maintaining the servers, for their overall security and for their connection to the internet. No other website will be hosted on the same server, which will be dedicated to the client's website. Whilst this is a more expensive solution but one which may provide the client with greater performance and guarantee of bandwidth availability.

Domain name registration

Generally clients should avoid outsourcing the registration and management of domain names unless it is managed and closely regulated by contract. Clients should ensure that the details of the registration are correctly set out and while the developer may register the clients domain names, they must be in the client's name and not in the developer's name. The contract and billing details that are provided with the domain name registration will be used by the domain name registrar to provide reminders and invoices when renewal fees are due. If the developer's name and details are entered and the renewal fee is not paid, the domain name may be lost and can then be difficult and expensive to recover. This is a risk given that the relationship with the developer may not continue beyond the development of the agreement.

Training

If the content on the website is to be maintained by the client, the client's staff may need some training from the developer in uploading and updating. The nature and extent of this such required training should be clearly specified.

Support Services

The client should consider entering into a support agreement under which the developer agrees to maintain the site following the initial development. This may mean that the developer will be assisting the client with updating content, or it may just mean that the developer is fixing any bugs that appear or making changes as requested from time to time and providing support to the client's staff managing the content.

Marketing Services

These may also be provided by the developer in terms of registration of the website with search engines, promoting the website and providing to the client periodic website statistics and analysis with recommendations for action.

SPECIFICATION

The aims and objectives of the website will be described in the specification, together with, its functionality and content, and how data is to be collected and processed. It can also specify in more technical detail such matters as performance levels, capacity, response times and browser compatibility. If e-commerce is involved on the website, the specification will need to address the data processing at a more detailed and technical level as well as any interfaces with back-office systems of the client.

Phasing

In the main, provided each aspect of the website is addressed in sufficient detail in the specification, it will be difficult for the client to reject the site, withhold payment of make any form of claim or complaint that the developer has not performed in accordance with the agreement. At the same time however, it may well be impossible or uneconomic to develop a specification which contains every last detail. Often the specification produced by the client will be a rather general and inadequate document from a contractual point of view. Sometimes, the client will not have the expertise to develop the specification itself. Indeed, this may be one of the services which the client is looking for from the developer. In this situation, part of the developer's brief will be to develop the specification and the design concept for the website. Here, no technical work will commence until the specification has been agreed. The parties may thus never reach agreement on the specification, in which case the development will not move forward. In these circumstances, the contract may need to be written in phases so that the parties only move to phase two if the specification being written in phase one is agreed.

Pricing and IP ownership

Again, if the parties have not agreed the details of the specification when they enter into the contract, it may be impossible to agree on the price for developing the site, as the precise scope and extent of the site will not have been agreed. As a result one of the prerequisites for entering phase two of the agreement may also be an agreement as to price for the website development. Commercially, however, the client's negotiating position may be weakened at this point as it may feel largely committed to the developer who has developed the specification and its concepts. A point to be borne in mind here is the ownership of the intellectual property in the specification where this is written by the developer. If the parties part company, will the client be able to take the specification forward with another developer?

Technical Issues

The specification should address technical issues relating to the site, for example the compatibility of the site as between browsers. Different web browsers - and even different versions of the same web browser - may display web pages differently because there is no consistency between web browsers in the HTML standards adopted. HTML is an evolving, open standard, so a consistent appearance among different web browsers is difficult, perhaps impossible. At a basic level, the client could ensure that the website adopts the lowest common denominator in terms of browser standards, but then some more highly functional elements may not be available. At the other (more expensive) end of the scale the site could be developed in different versions so that the appropriate version is delivered according to the browser used.

Perhaps the best solution is for the developer to develop the site without worrying about slight differences in presentation, but with a basic obligation to ensure that the site performs generally consistently across all browser platforms.

Particular difficulties can arise with graphics, their colour presentation and the choice between whether to use the GIF format or the JPEG format. Although a website can deliver multimedia, it is a poor medium for a high quality graphical interface, although technologies like Flash have moved this on. One of the difficulties is that the graphical capability of users browsing the site will vary according to the quality of their monitor, their settings, and so on. Although JPEG files can support 24 bit colour, many computers will only support 8 bit colour offering only 256 colours, which is the limit of the GIF format. To address performance issues, the parties can agree on maximum file size for graphics, which graphical format is used in different situations and that all graphics should have, as far as possible, a consistent cross-platform appearance.

Feature Creep

This is where ideas develop and features are added which were not contemplated in the original specification. If the developer seeks additional payment for features not specified in the original specification, the client may be aggrieved if it had not pre-agreed any increase in the price or believed that all work was included in the original price. This is chiefly a matter of contract management, but it can be assisted by a change control provision, so that if the original specification changes, the developer must provide a price proposal for this which must then be accepted by the client before being progressed. Changes made by the developer other than by following this procedure and without obtaining the client's consent would be unpaid.

Implementation Timetable

The implementation timetable is an essential aspect of the agreement setting out milestones during the development. These could include agreement on the specification, delivery of a pilot website for assessment of the general look and feel for client feedback, content loading, delivery of website for testing, acceptance and going live.

It is also useful to link the payment schedule with the achievement of the milestones as this avoids a situation in which the developer is entitled to payment regardless of the stage he is at.

Depending on how critical the timeframe is, you may wish to consider any or all of liquidated damages for delay, bonus payment for achievement of the target dates and ultimately termination of the agreement and recovery of monies paid for failure.

Acceptance Testing

This is crucial. An acceptance usually involves a final or substantial payment it motivates the developer to ensure acceptance.

It may not be possible to test all aspects of the site, but acceptance tests should test the functionality of site e.g. verification of response times, veracity of links, overall conformity with the specification etc.

The acceptance clauses may be similar to those in complex software development agreements, but it needs to be borne in mind that the performance of a website in a controlled environment may be very different from that where it is live with multiple users accessing it simultaneously. This very point was shown in a case where a website was developed for a popular broadcasting company and was to be launched in a splash of publicity. The website was operating fine before the publicity launch, but within hours of launch it received several hundred thousand hits, collapsed and had to be taken down with much embarrassment.

In the event that the site fails acceptance tests, the developer should correct the problems as quickly as possible and the tests can then be repeated. The client should have some control over how many times they can be repeated. After perhaps two rounds of acceptance testing, the client should have more serious remedies. This might include accepting the site as is, albeit deficient, with some retention or reduction in price. In serious cases, where the site is unacceptable, the client should have the ultimate remedy to withdraw from the agreement and recover monies paid. As previously mentioned, the client may want to be able to pick up the pieces left by the developer so that another can continue the work without intellectual property problems. The reality here however is that it will be more difficult to for a third party developer to pick up the work of someone else without significant re-engineering. In particular, an incoming developer would not wish to provide any warranties regarding the work which it had taken over. In some cases, therefore, the only solution may be to start again.