What is a website hosting agreement?

A website hosting agreement should be considered by anyone who wants to have their web pages hosted by a third party.

The terms of an agreement will depend on what risks you face and should be designed to limit your legal and financial liability. For example, a website that must be continuously available should be reflected in the terms and conditions.

For e-commerce sites, website downtime can result in loss of customers and financial loss through liability for incorrect backup and maintenance.

Domain name ownership

Consider whether you want to have ongoing rights to the URL you register for your website. Third party website hosts often arrange for a domain name to be registered and paid for, but this may mean that you will not be allowed to use the URL when your hosting arrangement finishes.

Consider which party is responsible for registering the URL and maintaining the rights to the URL through registration.

Location of the webserver

Make sure that your server is located where you are because the location of the server can affect your liability under various jurisdictions. Different laws and risks will apply in different states and countries. An alternative is to locate servers where you want your jurisdiction to be.

Maintaining the Server

Consider who will maintain the server and who will be responsible for the information posted onto the website. This will be important for establishing who is liable if your web site is inoperable or if information is lost.

Consider whether you want to collect information about users of your website from your host. Generally web hosts collect information about the number of ëhitsí there have been on a site, which pages have been accessed and which files have been downloaded and how often.

The IP addresses of users can be stored as well as the last pages they visited. You would need to consider the privacy issues in collecting and using this kind of information (See Privacy Fact Sheet).

Ensuring Security

Where it is important that no one be able to access certain information on your site, you will need to investigate what kind of security measures are used by the web host. This is particularly important if you hold client information on your site protected by privacy laws. (See Privacy Fact Sheet.)

Business records

You may need to maintain business and financial records (eg under tax legislation for up to 7 years). While these requirements will vary depending upon the jurisdiction you operate under and the particular legislation applicable to you, it is important to specify your storage requirements in any hosting agreement.

Web hosting checklist

You should consider the following when entering into a website hosting agreement with a third party:

1. How long is the agreement for?

2. What are the grounds for terminating?

3. What notice must be given before termination permitted?

4. Are there any automatic renewal periods?

5. Who is responsible for registering the URL?

6. Where are the servers located physically?

7. Who is responsible for the maintenance of the servers?

8. Are there any technical limitations on the hosting of the web site? eg storage size, bandwidth etc?

9. What is the maximum storage size that the web site can be?

10. Does the Web site require a particular bandwidth for traffic to or from the web site?

11. How will the web site be updated or files uploaded?

12. Who has responsibility for backups of the website and for any customer records and transactions?

13. How often and in what manner will backups be made?

14. What information is the web site host responsible for keeping in relation to the site?

15. Who will be responsible for security in relation to the web site?

16. What warranties and indemnities has the web site host given for the above issues?

17. Can the website host provide weekly site usage reporting and how much does this cost?

18. What extra services do they offer?


Other relevant Articles on this site:
Selecting an Internet Service Provider (ISP)
Encryption of data

Other relevant Fact Sheets:
Domain Names
Jurisdiction
Keeping Electronic Records
Online Contracts
Privacy
Secure Electronic Transactions

End Notes