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Launching and Operating a Website: Key Contracts
Practical Law Legal Update 2-532-6865 (Approx. 5 pages)
Launching and Operating a Website: Key Contracts
by PLC Intellectual Property & Technology
| Published on 02 Jul 2013 • USA (National/Federal) |
Key contracts for launching and operating a website.
Developing and operating a website generally involves several contractual relationships. Most companies must engage outside contractors to develop or host the website or parts of it. Website operators often wish to include third-party content on their websites, which involves entering into website content license agreements. Agreements with website end users, typically in the form of website terms of use and a website privacy policy, can help protect a company's valuable intellectual property rights in the website and its content, and minimize its risk of liability to website users.
Identifying the contractual issues early in the website planning process can help a company protect its rights and avoid delays in launching the site. The most common agreements a company is likely to need when launching or operating a website include:
- Development agreements.
- Hosting agreements.
- Content license agreements.
- Terms of use.
- Privacy policies.
Each agreement must be tailored to address the particular circumstances, including to take into account specific laws or regulations that may apply (for example, if the website is in a regulated industry or may be targeted to children).
In addition, other agreements may be needed based on the nature of the particular website and the website operator's business (see, for example, Launching a Retail E-Commerce Website for the Sale of Goods Checklist).
Website Development Agreement
Most companies do not have the internal resources to develop a website and must engage a third party to provide website development services. Depending on the company's internal expertise, these services may be substantially limited to technical website development or the service provider may also design the website. Key website development agreement terms include:
- Website specifications that are sufficiently detailed to help avoid later conflicts.
- Scope of services, including whether the developer is also hosting the website (see Website Hosting Agreement).
- Deadlines and milestones for the developer's performance.
- Ownership of the website intellectual property.
- Testing and acceptance provisions for ensuring that the website operates according to its specifications and providing suitable remedies if it does not.
- Fees, fee structure and any conditions to the company's payment obligations.
- Maintenance and support obligations.
- Liability for third-party claims.
For a model website development agreement, see Standard Document, Website Development Agreement (Pro-customer).
Website Hosting Agreement
The website must be hosted on one or more servers connected to the internet. If the company does not have sufficient information technology personnel and facilities to host the site, it must engage a third-party service provider. Key website hosting agreement terms include:
- Website hosting facility specifications, which may include specific locations and redundancy.
- Required website performance (service levels), including:
- server response times;
- minimum capacity; and
- uptime requirements.
- Remedies if the website's performance does not meet required service levels.
- Hosting fees.
- Website and information security.
- Backup and disaster recovery.
- Data migration and website transition assistance if the agreement terminates.
- Liability for third-party claims.
For a model website hosting agreement, see Standard Document, Website Hosting Agreement (Pro-customer).
Website Content License
Depending on the nature of the website and the company's business, the company may wish to include third-party content on the website. Key website content license terms include:
- A description of the licensed content and the licensor's responsibility for providing the content to the company.
- Whether the licensor or licensee is to host the content.
- The scope of the license, including:
- the term of the license;
- whether it is exclusive or non-exclusive;
- any restrictions on how or where the content can be used on the website;
- whether the licensee must use the content on the website; and
- territory.
- License fees or other consideration.
- Liability for the licensed content.
For a model website content license agreement, see Standard Document, Website Content License Agreement (Pro-Licensor).
Website Terms of Use
Website terms of use are a contract governing the relationship between the website owner and each website user. They generally aim to protect the website operator's intellectual property rights in the website and its content, and limit its risk of liability to website end users. Key provisions include:
- Contract formation provisions, specifying:
- how the end user accepts the terms; and
- the website operator's right to modify them.
- Intellectual property rights in the website and its contents, including:
- the scope of the end user's rights to use materials on the website; and
- the website operator's right to revoke permission or limit access.
- Account security and the end user's responsibility to keep passwords confidential and for use of his account.
- Permitted and prohibited uses.
- Key disclaimers, including for:
- third-party materials on or accessible from the website; and
- website accessibility and performance.
For model website terms of use, see Standard Document, Website Terms of Use.
Website Privacy Policy
A website privacy policy notifies users about the website operator's practices concerning end users' personal information. It typically is incorporated by reference in the website terms of use. In particular, the privacy policy should disclose:
- Information (including personal information) the website operator collects and how that information is collected.
- How the website operator may use personal information.
- The website operator's polices for disclosing personal information, including third parties to whom the information may be disclosed and circumstances under which disclosures may be made.
- The choices users have to limit the use and disclosure of their personal information, including how to exercise those choices.
- How the website operator protects the security of personal information it collects.
- How the website user can access, change or delete his personal information.
For a model website privacy policy, see Standard Document, Website Privacy Policy.