1. Selecting a website developer

At present there is no system of accreditation for website developers. Things to consider when selecting a developer include:

* what sites have they developed and the results;
* existing clients of the developer;
* recommendations from satisfied customers;
* availability of a broad range of skills appropriate to the site;
* appropriate size of developer to your organisation; and
* are they from a similar industry background.

2. Why enter into a written website development agreement?

To minimise the legal risk that may arise from the development and operation of a website, you should enter into a written website development agreement with any third party engaged to develop a website. Where an internal website developer is used, other risk management strategies (eg insurance) should be considered.

Without a written agreement:

(a) the third party developer (and not the customer) will own the intellectual property in the website and:

* the customer may have limited future control over the development and hosting of the website;
* the website developer may be able to reproduce the customer's website design for another customer if the customer is not the intellectual property owner; or
* the continuing use of artwork or other copyright works by customer will be dependent upon the copyright owner granting it a licence to do so.

(b) owning the intellectual property and not having possession of the source code can be a very frustrating and potentially disastrous situation. Escrow should be considered when the developer is not prepared to supply the source code;

(c) the customer is exposed to significant liability arising from programming and other errors with the website;

(d) the customer and developer can have different interpretations of delivery dates, the development timetable and the liability of the parties for delay;

(e) the unsuccessful developer is potentially exposed in the case where a pre-contractual development proposal is put forward but not accepted and that proposal is used in a future site created by another developer.

You should maintain records such as minutes of meetings to document the fact that you have relied upon the knowledge and expertise of the developer. Such evidence makes it difficult for a developer to defend a claim of misleading and deceptive conduct made against the developer.

3. Contents of a written website development agreement

The website development agreement should clearly state the website specification (graphic design and website functionality) and the developer's responsibilities. Issues to cover include:

(a) Usual commercial terms of business

Dealing with price, payment, termination, liability and indemnities and insurance.

(b) Website development plan:

This should set out:

* a definite plan for the scope of the project (unless prepared to spend a large amount of money on a time and materials basis to investigate the options). Project variables include style, size and included features.

* what the developer is to deliver, the date by which it must be delivered, testing procedures and criteria (preferably performed by a third party) to evaluate the standard of the services delivered and any penalties for contract failures. When testing is complete, the website should be ready to go live;

* the level of information security required (see Secure Electronic Transactions fact sheet);

* responsibility for providing hardware and software;

* directions the developer must comply with;

* notification procedures for delays;

* an agreed procedure for any review or variation of the website specification and an acceptance testing regime appropriate to the level of complexity (or simplicity) of the website;

* as the monetary value likely to be in question would probably not justify litigation, a dispute resolution procedure should be incorporated into the contract;

* additional duties of the developer, such as website maintenance or periodic content update (eg checking hyperlinks), domain name registration, procuring and creating web art and photographs, website hosting; submitting websites;

* flexible procedures for any future website development and maintenance including the introduction of new technology and information; and

* if appropriate, a mechanism to permit the developer to subcontract development of parts of the site to third parties.

(c) Intellectual property issues

Including the following:

* ownership of the intellectual property rights in the website;

* responsibility for obtaining any intellectual property rights and licences necessary to develop, maintain or update the site;

* future assignment of intellectual property rights created in the development of the website;

* use of any third party trade marks. The registration of a trade mark in Australia does not mean its use will not infringe other parties' trade marks outside Australia (see Trademarks);

* intellectual property warranties and indemnities (see below);

* proper attribution of intellectual property used on the website;

* a clause which prevents the developer from using a similar design for another customer in the same industry;

* a clause governing the use and disclosure of confidential information (eg customer information regarding impending product or service releases) website content must not be defamatory (see Defamation fact sheet);

* third party copyright material is used with permission and appropriate acknowledgments or under licence (see Copyright fact sheet);

* the use of metatags should be carefully monitored for relevance and to avoid potential legal liability (see Metatags);

* hotlinks (or hypertext links) to other websites may require the permission of the owner of the target website prior to linking. The owner may grant permission on the condition the home page (and not deeper content) is linked (see Link or Frame a Website). Customer should clarify with the developer that each link has been approved by the owner of the target website;

* framing other websites may:

(i) constitute misleading and deceptive conduct under trade practices legislation if the visitor is confused as to the origin of the material in the linked site; and

(ii) be a possible source of copyright and trade mark infringement.

Customers should consider prohibiting the developer from framing any third party materials to avoid the legal risks which may arise from this form or reproduction. See Link or Frame a Website.

A legal audit of proposed website content for any of the above intellectual property issues is recommended.

(d) Liability, warranty and indemnity

Liability, warranty and indemnity from the relevant party (expressed to cover goods and services, see Trade practices and consumer protection) covering the following:

* content is not obscene or defamatory;

* content does not breach any other law or infringe any intellectual property right of a third-party;

* the extent to which the software will be bug free;

* responsibility for possible loss and damage which may arise from defective code being used in the construction of the website;

* the liability of the developer for a failure in programming that results in economic loss to the business (community organisation);

* where the website allows visitors to upload files or content and the customer has no control of the website content, the customer should obtain from the developer an acknowledgment that the latest anti-virus checks are being carried out on a frequent basis; and

* if appropriate, a requirement for the developer to maintain professional indemnity insurance to make the above indemnities effective in practice.

4. Privacy

Tracking tools such as Cookies may result in liability for the developer if the actions of such programs are considered by a court to be computer trespass or if they otherwise deal inappropriately with data and visiting computer. See Privacy fact sheet.

5. Domain Names

Select a domain name and register it to prevent others from using it as an address.

Determine which party is responsible for checking whether the domain name used for the website infringes any intellectual property rights.

Consider registering the distinctive part of the domain name(eg Oz NetLaw in www.oznetlaw.net) as a trade mark.

See the Trade Marks and Passing Off and Domain Names Fact Sheet.

6. Terms and conditions of website use (including disclaimers)

These must be readily noticeable and available throughout the website (eg certainly on the home page) and address the following:

* effectively disclaim all liability to the extent permitted by law;
* offers made on the site are specifically restricted to certain geographical areas;
* information contained on your site is for information purposes only and is not intended to render professional advice;
* whether a visitor is allowed to copy content and if so, on what conditions;
* for interactive sites, the customer is not liable to readers for information posted to the site and conversely, anyone posting information to the site indemnifies you against any loss you suffer as a result (see below).

7. Interactive website (or chat forum)

If the website contains an interactive information or chat forum, you should consider:

* the level of control you wish to have over posted content. If you vet the material, you may be liable for disseminating any defamatory material posted to the site. If you have no editorial involvement, you should reserve the unilateral right to remove posted content to appease potential complainants. See Online Content Regulation Fact Sheet; and

* whether a user who posts information to the site is required to give the business (community organisation) a licence to reproduce posted material to avoid any allegation of copyright infringement.

8. Website containing important advisory information

Such a website may be negligent if it appears to assume responsibility for providing skilled and professional advice and services, fails to reach this standard and a person relies on the information or advice to his or her detriment. The capabilities, goods and services you provide via the website must be accurately represented. A failure to provide accurate facts may expose you to liability for misleading and deceptive conduct under trade practices legislation.

See Misleading and Deceptive Conduct fact sheet.

9. Company ACN or ARBN

This must be stated on all public documents.(1) A website may constitute a public document.

10. Restraint of trade clause

For large website development projects, the developer should consider a restraint of trade clause to protect its investment in its employees. The customer may decide to move the website maintenance in-house and may approach one or more of the developer's employees with an offer of employment. Without a restraint of trade, the developer may lose a customer and possibly a highly trained employee.

Other relevant Articles on this site:
Get a domain name
Terms and conditions of website
Trade practices and consumer protection
Contract
Ownership of content

Other relevant Fact Sheets:
Copyright
Defamation
Disability Discrimination
Domain Names
Misleading and Deceptive Conduct
Online Content Regulation
Online Contracts
Privacy
Secure Electronic Transactions
Trade Marks, Domain Names and Passing Off

End Notes
(1) Corporations Law
section 219