Looking to hire a web development company for your upcoming project? Are you about to sign the contract? This checklist of a web development contract will help you understand the key aspects of such a contract. Read this post to make sure you are entering into the right type of contract.
At Axis Web Art, being a web development company in India, we believe in complete transparency and share a detailed contract we prepare for every new project.
Importance of a website development contract
Every project starts with positive intent but sometimes the situation comes where things don’t go as intended. In cases like this, the contract you sign with the company plays an important role to decide the judgment. A website development contract not only defines the job of both the parties entering into a contract but it also ensures that both the parties are working towards the same goal. When a well-defined development contract is in place it negates the possibility of misunderstanding, confusion, and disputes between the two parties. Development contract helps a client in getting a clear understanding of what they will get as a result. At the same time, a development contract plays an equally important role for us as a web development agency. Some clients start over expecting from what we do for them and in cases like this, a web development contract helps in keeping the project on track. That way a contract helps the client in getting what was promised and a development agency in keeping the project profitable by not doing extra things not included in the project scope.
Key elements of a website development contract
A website development contract or agreement is one of the important documents for each project. It includes answers to all the questions arising through the lifetime of a project. A well-defined development contract covers every aspect of the project including objectives, deliverables, expectations from both the parties, timeline & resource engagement, cost breakup & payment terms, technical aspects of it.
Key elements of a website development contract are –
- Scope of the work
- Project timeline & resource engagement
- The breakup of cost and payment terms
- Ownership of the source code, graphics, and intellectual properties
Checklist for a Web Development Contract/Agreement
With this post, I am sharing with you the key things you should check with the development company before finalizing the contract. This checklist covers the important factor of a good development contract. Cross-check your contract against this checklist and if you’re satisfied with most of the things mentioned below in the document then you should be good to go.
Scope of Work –
Scope of Work is the most important part of any software or web development contract. This part of the contract defines the deliverables a client will get from the service provider. It’s important for you as a buyer to clearly understand what’s written in this part of the contract to make sure it covers everything you desire to have in your end product. Here at Axis Web Art, we clearly define each module required to make the application complete. Each module clearly describes the features and functionalities it provides in the overall system. This is standard industry practice and I am sure most of the companies do the same. Read it with full attention and make sure anything you need is not missing from this part of the contract.
Custom design or standard template
If you want to make your website stand out from the crowd and don’t blend with plenty of other websites around the internet? Then pay close attention to this. One can easily find tons of ready-made templates for almost any industry and platform on template markets like ThemeForest etc. A readymade template can be used by plenty of websites. Sometimes a template becomes so popular that it gets used by thousands of websites. That way your website becomes exactly similar to 1000s of different websites on the internet. Custom design, on the other hand, gives you something of your own. However, project cost goes higher when a development agency designs and develops a custom template. Whatever way it is, just make sure you are getting what you are paying for.
Ownership of the source code, intellectual property, and graphics-
Many clients assume that ownership of intellectual property will be theirs but legally it depends on the agreement you have signed. Very often we see clients coming to us saying they hired a developer earlier and they didn’t get the source code once the project was completed. This time around they want to be double sure that ownership of source code, intellectual property & graphics will be theirs or not. So while entering into a new contract with a web development agency simply make sure that you get the full ownership of the source code and it should be mentioned in the contract. Then you get complete control over the future development of the application. You can hire an in-house developer or a new development agency for any future development. At Axis Web Art, we provide complete ownership of the source code, intellectual property & graphics to the client. Our contract covers the following –
- Who owns the source code of the application?
- Who owns the graphics and website design template?
- Do we intend to use any open source project? There relevant licenses.
- Do we intend to use any of their party modules? Status of their relevant licenses.
Status update and communication –
Once the contract is started, regular communication is required throughout the lifetime of the project. Having this documented in the contract helps in streamlining the process. It’s good to have below points included in the contract document –
- What will be the process of the regular update?
- Where the status updates will be communicated? Over email or on a project management tool like Trello or Asana.
- What are the expected deliverables in each status update?
- A mechanism to tackle delay caused by any of the parties
Payment Terms & Cost –
Cost and payment terms need to be clearly defined on a web development contract. This is important to avoid any confusion or delay in payment and project delivery going forward.
- What are the payment milestone and how much is to be paid upfront?
- What is the estimated total price?
- When a final payment would be made?
- Clarification on the inclusion of tax or any other govt duties
- Clarification on license cost for any third-party services if any to be used
- What are the conditions where payment can be kept on hold
- Clarify on website hosting & domain registration cost
Support and Maintenance –
Many times this part is completely ignored by the development contract. Doing this leads to misunderstanding going forward so it’s better to have written clarity on the website support and maintenance. A good contract should have a section covering website maintenance part even if maintenance services are not part of it
- Is there any free maintenance period included as part of the development. Some agencies provide 90 days of free maintenance.
- Does the agency provide maintenance services post-development?
- How the updates on the website handled post-development?
To complete the project with extreme success there needs to be a defined set of obligations for both parties. A good contract clearly defines these obligations so everyone is clear on their responsibility from the very first day. From a client’s perspective –
- Share your graphic identity, trademark or photos to be used on the website
- If it’s an eCommerce website, share your product catalogue information along with product images
- License agreement to use any required third party application or APIs like integration with payment gateway, integration with shipping partner, integration with any ERP or CRM software
While doing this make sure you have the proper license and copyrights to use any such things required to be used on the website. Resolving copyright or licensing issues can be a nightmare going forward.
Development Company’s Obligations
A good way to avoid misunderstanding going forward is to set clear obligations for the website development company too. A good contract should have a clear understanding of the following subjects –
- Every application requires a set of usages guide so going forward client or any employee working in the client’s company can refer these documents any time in the future. A proposal should clarify who is responsible for preparing these training manuals and usage documents.
- Is there any warranty provided by the development company to maintain the application? A specification on how long and what’s included in the warranty terms should be indicated in the proposal.
- Who will handle the upgrade required on the third-party API/Application used and whether its part of the warranty program or it will involve separate cost?
- Gathering information and collecting feedback/approval process can be also defined as part of the development contract.
Confidentiality & Data Security Clause
While working on a project, a development company gets access to several confidential properties of the client. Check the proposal and make sure that the development company has put enough safeguards to protect all the sensitive information. Another thing you need to make sure about the confidentiality of the project.
- What is strictly confidential about your project?
- Do you allow the web development company to talk about the project or include in their portfolio?
- A noncompete clause that prevents both parties from cross hiring employees of each other’s organizations. The time frame for this type of clause generally varies from six months to a year.
- Date security clause to safeguard confidential information.
- If the web development company indents to subcontract the project further include a relevant clause to safeguard confidential information.
Force Majeure Clause
Force Majeure is a french word which means supreme force. In legal terms, this is used for any unexpected event causing a delay in the completion of a project or making it impossible to fulfill the contract. Usually, this refers to natural disasters like floods, earthquakes, etc. and men made disasters like riots, war, crime, etc. The absence of a force majeure clause can leave both the parties in contract on the mercy of local laws.
Website Acceptance and Acceptance Testing
In certain website development contract, customer can request a detailed acceptance testing provisions to be included. Contract should include the required remedies if a web application does not perform or work as expected.