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This article is written by Snehasree who pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

What will you, as a lawyer do when your client hasn’t updated you with the fees or hasn’t got back to you on time regarding their project?

The web design contract is the rescuer here.

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What is a web design contract?

It is a  legally-binding contract between the designer and the client. It includes the pricing, timeline, deliverables, copyright, etc, which are relevant to the project. 

For example, you can avoid some scenarios like a non-timely response from the side of the client, non-payment of the project, claim of copyright, claim of refund when the client feels like he wants to terminate the project, so on by adding these clauses in your contract so that you won’t get affected by such accusations.

A contract with a good draft should be able to give answers to:

  • What happens next, when the client claims the copyright for the project?
  • What happens next, when the client gets away with the project without any payment?
  • What happens next, when the client doesn’t give a timely response?
  • When will additional charges be made in the project?
  • What happens when the client wants to terminate the project in the middle?
  • What happens when you want to terminate the project in the middle?
  • Should a copy of the project be kept with you? If so, for how long?

And any such questions which are relevant to the contract.

Here are some ways by which you can enhance your contract’s draft.

  • Simplify the draft

It is always to be seen that a draft that is being drafted by the lawyer seems to be very difficult for the client to read and understand. A complicated contract would leave your client in confusion and frustration.

Keep your draft as simple as it can. Avoid using jargon. Always draft in such a manner that a layman can understand. Make the clauses simple and explain them in a good manner. A draft is not a place to show your knowledge of English skills.

  • The statement of work clause

Sometimes, some clients are not satisfied with the nth draft also. They make us draft and draft till they are happy with the final draft. Overwork and no result as expected will lead to tensions and fights. The expectation from the end of the client thus expands and the client will make you draft the clauses which were not at all in the contract.

At these times, a clause as “Statement of work” comes to the rescue. Speak with the client to know his expectations from you. Sign up for what the client requires you to do. Take additional payment for the work that you haven’t signed up for.

  • Include client responsibility

Certain responsibilities are to be carried out by your client. They have to respond within the time limit of the completion of the project. Update with the designer upon where all the corrections are needed.

  • Ownership of work

The copyright ownership always goes to the Designer of the contract. However, if the client needs to get the credit of the ownership, he can pay accordingly and take up the ownership right.

  • Define payment terms

What to do in case of overwork or change in a clause? Yes, payment plays a very important role here. If you are burdened with the work you are doing or if the client wants to do some more patchworks in the contract, you have all the rights to ask for an extra amount to be paid. 

  • Get the contract signed

Always make sure that both of the parties( the designer as well as the client ) get signed in the contract. If tomorrow, any conflict happens between both of the parties, the signature by both the parties would be a lifesaver.

What all clauses are to be included in your Web Design Contract?

  • Payment Clause

A payment clause saves your time from running behind your client for the delayed fees and expenses of the hard work and efforts that you have put up for. A reasonable rate in the payment clause will be beneficial in any project’s contracts.

E.g. You can argue upon if your client fails to pay you your money for the extra hours that you have put up into the project using this clause.

An example of the Payment clause is given below:

The Web Designer will charge __________ for the services mentioned above as a fixed price, or at an hourly rate of __________. The payment will be divided into __________ payments, with a first deposit of __________ being paid before work commences.

  • Warranty of services 

The services which are being delivered can be warranted. The designer can put up a specific timing for getting back regarding the project by the client. some clients who are not satisfied with the draft even after thousands of revisions. At such a time, all the designer can do is to ask for extra payment for the extra hours which are being put up by him. 

An illustration of the warranty of services clause goes like this:

___________(web designer) warrants that the Services will be performed in a professional and workmanlike manner consistent with applicable industry standards. This warranty will be in effect for a period of _________days from the completion of the applicable Services (the “Warranty Period”). If during the Warranty Period, web designer receives written notice from Customer of non-conformity with the performance of the Services outlined in this contract, a web designer will, as Customer’s sole and exclusive remedy and web designer’s entire liability for any breach of the foregoing warranty, at its sole option and expense, promptly re-perform any Services that fail to meet this limited warranty or refund to Customer the fees paid for the non-conforming Services. 

  • Ownership right 

The ownership right is the other clause that comes into the picture. It’s always the designer who is having the ownership right of the project. But the client can always approach the designer to pass on the ownership right in his name.

Sample draft of ownership clause:

Material and associated intellectual property rights developed by a party before or outside of the scope of a Statement of Work (“Pre-Existing Material”) shall be, as between the parties, owned by the developing party. _______(Web designer) shall own all rights, title, and interest in all scripts, methodologies, processes, and documentation, and all intellectual property rights therein, developed during the provision of the Services involving:

  1. implementation or installation of products of Web designer (the “Licensed Product”) into Customer’s environment, 
  2. a configuration of workflow or reporting capabilities of the Licensed Product, and
  3. optimization of the use of the Licensed Product in the Customer’s environment (collectively, the “Web designer-Owned Work Product”). Web designer hereby grants to Customer, for the license term applicable to the Licensed Product licensed to Customer under the applicable contract, a nonexclusive, worldwide, right to use, reproduce and create derivative works of any Pre-Existing Material owned by Web designer and incorporated into deliverables of the Services, and the Web designer-Owned Work Product, for Customer’s internal business purposes to aid in Customer’s use of Licensed Product licensed by it.
  • Confidentiality

There will be times when the client doesn’t want the information to go out into the public or any third party to know about it. Or that the designer does not want to disclose certain information to other than the client. At times like this, it is always good to keep up confidentiality terms with the client.

Sample draft of Confidentiality clause :

The following are to be considered confidential;

  •  for the web-designer, Pre-Existing Material and designer-owned Work Product; 

for Customer, Custom Work Product; and for both parties, Jointly Owned Material,

  1. each party’s software products, in byte code or binary form, source code form or otherwise, and any authorization keys and passwords delivered  to operate such products; 
  2. product documentation, product road maps, and development plans, and product pricing information, whether or not any such information is marked or otherwise identified as confidential or proprietary; 
  3. any information of a party that, if disclosed in writing, is marked “confidential” or “proprietary” at the time of disclosure, or, if disclosed orally, is identified as “confidential” or “proprietary” at the time of disclosure, and is summarized in a writing sent by the disclosing party to the other party within thirty (30) days of such disclosure; and 
  4. the Customer-specific terms and pricing outlined in any Statement of Work or this contract.

Things to be excluded:

Confidential Information does not include information that: 

  • is or becomes generally known or available to the public through no act or omission of the party receiving Confidential Information (“Receiving Party”);
  • is rightfully known by the Receiving Party before receiving such information from the other party (“Disclosing Party”) and without restriction as to use or disclosure;
  • is independently developed by the Receiving Party without the use of the Disclosing Party’s Confidential Information and breach of this contract; or 
  • is rightfully received by the Receiving Party from a third party without restriction on use or disclosure.

The existence of this contract and the nature of the business relationship between the parties are not considered Confidential Information.

  • Termination

What happens when there occurs a fight with your client and you or the client wants to put an end to the project? A cancellation clause is a lifesaver here. 

The client or the designer can terminate a project if either of them feels like the deal can’t be taken forward.

Sample draft :

Sample draft of termination clause:

Termination

Each party will have the right to terminate this contract or any Statement of Work if the other party breaches any material term of this contract or Statement of Work, as the case may be, and if such breach is capable of cure, the breaching party fails to cure such breach within ____ days after receipt of written notice thereof. Either party will have the right to terminate this contract if the other becomes insolvent or makes an assignment for the benefit of creditors, or a trustee or receiver is appointed for such other party or a substantial part of its assets, or bankruptcy, reorganization, or insolvency proceedings shall be instituted by or against such other party. Termination of this contract under this section terminates all Statements of Work entered into hereunder.

Effect of Termination

Upon the expiration or termination of this Contract or any Statement of Work: 

  1.  each party will promptly return to the other party all Confidential Information of the other party in its possession or control; and
  2.  __________(Customer) will, within ______ days after receipt of Synopsys’ invoice, pay all accrued and unpaid fees and expenses.

Survival

The rights and obligations of the parties contained in Sections ___________will survive the expiration or termination of this Contract or any Statement of Work.

  • Indemnification

Is there any person or any company or any institution which can stand as security to any damages being caused, or any liabilities, or any damages or expenses incurred.

This problem will be discussed in the indemnity clause.

Sample draft of the Indemnification clause:

___________(Web designer) will defend or settle any action brought against Customer by paying all costs, damages, and reasonable attorneys’ fees that are finally awarded against Customer to the extent those amounts are based upon a third party claim that the Services performed on a Customer site, as specified by the web designer to Customer under this Contract and used by the Statement of Work, directly results in:

  1. bodily injury, including death, 
  2. the breach of Confidential Information or 
  3. tangible property damage, caused by Web designers’ gross negligence in performing such services. 

However, Web designer’s obligations under this section are subject to the following conditions:

  1. Customer must promptly notify the web designer in writing of the action; 
  2. Customer grants web designer sole control of the defense and settlement of the action; and
  3. Customers must provide a Web designer, at Web designer’s expense, with all assistance, information, and authority reasonably requested for the defense and settlement of the action. A web designer will not be responsible for any compromise made or expense incurred without its consent.
  • Amendment

What should the client do in case he wants to bring an amendment to the project? Where can he go? Or is there any specified party who can be assigned to do the amendment? Or if the client needs to make a new draft to add certain things?

The answers to this question come under the Amendment clause. Sample draft of the Amendment clause:

This Contract, including all accepted Statement of Works referencing this Contract, constitutes the complete and exclusive understanding and the contract between the parties regarding its subject matter and supersedes all prior or contemporaneous contracts or understandings, written or oral, relating to its subject matter. Customer agrees that additional or different terms on Customer’s purchase order shall not apply. Failure to enforce any provision of this Contract will not constitute a waiver of future enforcement of that or any other provision. Any waiver, modification, or amendment of this Contract will be effective only if in writing and signed by the Customer and an authorized representative of Synopsys. If for any reason a court of competent jurisdiction finds any provision of this Contract invalid or unenforceable, that provision will be enforced to the maximum extent permissible and the other provisions of this Contract will remain in full force and effect. The word “including” when used in this Contract will be included without limitation of the generality of any description, definition, term, or phrase preceding that word.

  • Governing law

What happens in the case, if the client or the designer wants to complain regarding the project when both of them are not able to come to good terms?

Which law shall be governed by? Where shall they go to complain, which jurisdiction would be applicable etc will be covered under the Governing law clause.

Sample draft of the governing law clause:

Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

  • Act of God and force majeure

Act of God is a legal term used to describe events that are beyond human control. Earthquakes, floods, landslides, etc include some of them. If an unforeseen event like a flood occurs,  the designer must be able to explain this through the clause and what happens next? Does the contract get terminated or how does payment get affected?

Sample draft of the Force Majeure clause:

Force Majeure

Neither party will be responsible for any failure or delay in its performance under this Contract (except for any payment obligations) due to causes beyond its reasonable control, including, but not limited to, labor disputes, strikes, lockouts, shortages of or inability to obtain labor, energy, raw materials or supplies, war, terrorism, riot, natural disasters or governmental action.

Thus, by adding these clauses, you will be able to save your side. However, it’s always advisable to approach any lawyer for getting your contract drafted. You can save your time, money, energy, and headaches by adding such clauses.

A copy of the template draft is attached herewith. 

Conclusion

Most businesses have an online presence through their websites so as to reach a wider clientele base. In the process of creating these websites, entering into web design contracts is an inevitable prerequisite. Your clients approach you with utmost trust and respect. Try to keep up that and know as much information as possible regarding the project and draft without leaving any of the important clauses. Always cultivate a healthy business relationship. 

References

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