The Website Development Contract and Other Legal Issues to be Aware of When Hiring an Agency to Redesign Your Company’s Website

By Adam Levin (Information Experts) and Peter Fish (McMahon, Welch and Learned, PLLC)

The first article of this three-part series identified the primary reasons businesses should consider hiring a website development firm to redesign or re-do their existing website.

Now that this decision has been made and you have selected an agency, you are going to be presented with a legal contract to review and sign before the work can begin. Like all legal agreements, it is always good advice to have an experienced business lawyer review this contract and clarify any aspects that you do not fully understand before you sign it. First and foremost, the written agreement needs to accurately reflect the business arrangement between the parties.

While a website re-design does not raise as many significant legal issues as are involved in establishing a brand new website for a new business, there are still a number of legal issues to be aware of. Many of these legal issues should be addressed in the website development contract, including:

1. Ownership of the Content. From your perspective as the client, your agreement with the website development firm should make it clear that all of the content (either pre-existing or newly created for the redesigned website) belongs to your company. The legal term of art for the ownership of newly created content being transferred from the producer to the customer is “work made for hire”. The only acceptable exception would be an acknowledgement that the developer retains ownership rights to the pre-existing development tools it uses in the course of performing the work.

2. Legal Protection for IP Infringement. One of the legal risks that you definitely want the website developer to be responsible for is intellectual property infringement. In other words, you need protection in the contract to cover the possibility that something the agency contributes or includes in your redesigned website was unauthorized by its author/creator or otherwise infringes on the intellectual property rights of a third party. Such infringement claims could be related to a wide range of types of items from the written content, artwork, photos, video, logos or designs, to software or other technology. A common misconception many folks have is that if it is out there on the web, that item is “public domain” and free to use by anybody. But that is just plain wrong.

For example, some businesses get themselves into trouble by simply lifting photos from other websites and incorporating those into their own site. If you were to do that, the owner of that photo could make a copyright infringement claim against you. The legal and proper way to handle that would be to either (a) purchase or license the rights to use any photos for your website from a licensing agent such as Getty images or iStock photo, (b) have your website development agency or another third party take the photos for you and make sure they assign to you all of the rights (so that the photos qualify as a “work made for hire”), (c) only use photos from royalty free/no attribution sources such as pixabay or freerange, or (d) take all the photos yourself.

3. Other Contractual Issues. Like any other agreement you make with another business, you want to make sure the rights and responsibilities of each of the parties are precisely spelled out in a way that are both reasonable and make sense to you. Among the most important contractual issues to be addressed by agreement are the scope and duration of the project, changes/delays, review and acceptance process, payment terms, term/termination, and dispute resolution.

There are also other legal issues that may come into play during the process. For example, your company should generally claim ownership of the copyright of the website content with a copyright notice (e.g., “Copyright 2018. All rights reserved.”). Trademarks and service marks owned by the company should also be appropriately labeled. Finally, your website should include a written data security and privacy policy, especially if your site includes any mechanism through which information about visitors to the website is collected.

The bottom line is that you need to do your due diligence, carefully read the agreement, and have it reviewed by experienced legal counsel before proceeding with the project.

Obligatory small print legal disclaimer: This blog is for educational purposes only. Nothing posted on this blog constitutes or substitutes for legal advice, which can only be obtained from a personal consultation with a qualified attorney. Using this blog does not create an attorney-client relationship between you and the author and/or McMahon, Welch and Learned, PLLC. Although the author strives to present accurate information, the information provided on this blog is not guaranteed to be complete, correct or up-to-date. The views expressed on this blog are solely those of the author and do not necessarily reflect the views of McMahon, Welch & Learned, PLLC.