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               Checklist of Issues for Web Site Development Contracts

Many emerging companies contract out the development of their Web sites to third-party developers. The contract with the Web site developer should address several key areas, including ownership and intellectual property rights, the development process, functionality of the end product, problems that may arise and corrective measures required to be undertaken, covenants of the developer, confidentiality and other provisions. The following is a checklist of issues.

A. Ownership and intellectual property issues. The development agreement should clearly address the issue of ownership of and intellectual property issues related to the content, screens, software and information developed, including:

 

checkbox The Web site developer is an independent contractor performing a "work for hire" service under the Copyright Act

 

checkbox All screens, graphics, domain names, content and the look-and-feel of the site developed shall be owned solely by the company, together with all underlying software, object code, digital programming, source code and the like.

 

checkbox Whether the developer retains rights to use any materials or software it gains from its creation of the Web site

 

checkbox All intellectual property developed in connection with the site will be owned solely by the company

 

checkbox The developer, in developing the site, will not infringe or violate the copyright and other intellectual property rights of third parties

 

checkbox If the developer is bundling or using any prior intellectual property that it owns and of which it wishes to keep ownership, the company will receive a perpetual, irrevocable, worldwide royalty-free transferable license to the same

 

checkbox Which party is responsible for securing various rights, licenses, clearances and other permissions related to works, graphics or other copyrighted materials to be used or otherwise incorporated in the Web site.

 

checkbox A copyright notice will be displayed on designated parts of the company´s site

 

B. The development process. The development agreement can address various issues associated with the development of the site, progress payments and acceptance procedures, including:

 

checkbox A timetable and budget for completion of the site, including specific payment milestones as progress is made on site development.

 

checkbox A mechanism allowing for change orders by the company regarding the specifications for the site, without the change orders resulting in exorbitant additional costs or delays.

 

checkbox The developer will provide timely documentation and source codes for all software associated with the site.

 

checkbox The developer will train employees of the company to use and maintain the software associated with the site, both initially and at the time of each upgrade; the number of business days and the location of the training can be specified.

 

checkbox The developer assumes responsibility for transferring the site -- including all software -- to the company´s server and (if applicable) agrees to oversee the site´s installation on that server.

 

checkbox The developer provides alternative interface designs for the company to review and decide upon.

 

checkbox A commitment by the developer to a period of joint beta testing of the site and a subsequent "acceptance testing" period during which the company may evaluate the site on its premises to make sure the site functions as anticipated and in accordance with the agreement.

 

checkbox The company will have the right to reject the site if it does not meet designated specifications, and the company has certain options regarding corrections at the time of a rejection.

 

checkbox A copyright notice will be displayed on each page of the company´s site.

 

C. Functionality of the site. The development agreement should clearly specify the anticipated functionality and technological requirements from the site, including provisions that address:

 

checkbox Use by the developer of the most current technology in development of the site.

 

checkbox The maximum download time for any Web page.

 

checkbox The inclusion of a user option for a low-graphics version of the site in order to minimize download time.

 

checkbox The site is compatible with the latest versions of Internet browser software, especially the Microsoft, Netscape, and AOL browsers.

 

checkbox The number of users that will be able to simultaneously access the site, as well as response time for user requests.

 

checkbox How the site will be properly integrated with the company´s intranet or other data server structure.

 

checkbox Additions, corrections or modifications to the site can be made by the company without interference with site operations.

 

checkbox Security safeguards, procedures and firewalls that the site must contain.

 

checkbox The expected functionality of online credit verification and acceptance procedures.

 

checkbox The scope and procedure for the company being able to easily access, record and compile information about the site´s users and customers.

 

D. Problems and corrective measures. The development agreement should address the problems that may arise and the developer´s duty to promptly correct them, including:

 

checkbox Any bugs and failed links, including maximum time for correction.

 

checkbox The revision of the site to comply with the functionality specifications.

 

checkbox Any particular warranties or disclaimers by the developer.

 

checkbox The developer agrees to ensure that any software for the site is free of any viruses or disabling devices.

 

checkbox The rights of the company to terminate the agreement and the liability of the developer upon such termination.

 

E. Covenants of the developer. The development agreement may impose a variety of additional duties on the developer, such as:

 

checkbox The developer will, if requested by the company, publish information about the site with a mutually agreeable set of search engines and directions..

 

checkbox The developer will not, during development or thereafter, use the company´s trademarks, service marks or logos, except with the company´s express written approval.

 

checkbox The developer will not use its service affiliation with the company for its own promotional purposes without prior written consent.

 

checkbox The developer will comply with all applicable laws in connection with its activities.

 

checkbox The developer will maintain satisfactory insurance and will provide proof of its policies.

 

F. Confidentiality. The company will want to obligate the developer to keep all confidential or proprietary information that it learns about the company or its customers strictly confidential, and not use such information other than in connection with the developer´s obligations under the development agreement. The agreement may also require that the developer´s employees and consultants working on the project execute a Confidentiality and Invention Assignment Agreement. The agreement may also address the issue of whether the developer is permitted to subcontract portions of the development project.

 

G. Miscellaneous. As in any good contract, the following types of clauses should be considered for the development agreement:

 

checkbox In the event of a dispute, the prevailing party will be entitled to recoup its attorneys´ fees and costs.

 

checkbox Whether disputes will be handled by litigation or arbitration.

 

checkbox What governing law will govern and where any disputes must be brought.

 

checkbox The contract contains the complete and entire understanding and agreement of the parties.

 

checkbox The agreement can only be amended in writing.

 

checkbox The agreement is not assignable by the developer.

 


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