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Term and Termination

The initial term of the agreement is likely to be the period in which it is thought the job can be completed. However, many website development agreements also include ongoing work, such as maintenance, hosting, and colocation services. These other matters may be contained in separate agreements, but they may also be worked into the development agreement in such a way that it becomes appropriate to specify exactly when the development phase of the project ends. Further, it may be necessary to extend the term of the website development agreement for so long as there is an outstanding and uncompleted SOW. In transactions with multiple SOWs, it may be necessary to incorporate a process whereby the term of the agreement will only end after completion of all of the services to be provided under SOWs. Also, on termination, consider the following requirements:

■ The developer should return anything that it was provided by the company to do the work.

■ The developer should be required to sign any documents necessary to transfer to the company any of the software that was created.

■ The developer must turn over any other documents that may relate to the website or the work that was done. Examples include any consents the developer obtained from individuals whose names or pictures may have been used, licenses or consents from the owners of any trademarks that may have been included, documents authorizing the use of any music, and documents assigning copyrights if some of the work was done by independent contractors.

■ On termination, there may be some final tasks to do relating to confidentiality, such as exit interviews and reaffirmations of the confidentiality provisions of the agreement by all of the developer’s employees or contractors who obtained confidential information.

■ If the developer paid any bills relating to the job that were reimbursed by the company, the receipts for those, if not already provided, might be included on the termination checklist.

■ There might be a final acknowledgment that the work has been completed and that the developer has been paid all to which it is entitled. Note that the developer may want the corollary to this—a final statement by the company that it is satisfied with and has accepted the work that was done.

A termination of the website development agreement without the consent of the other party is potentially troublesome; therefore, anything that gives rise to such a right should be described out in detail. Often this is done by saying that either party may terminate the agreement for a breach of any material term by the other if the breach is not cured within a certain number of days. This provision can sometimes be fairly lengthy and detail the exact procedures and notices that must be given. Obvious material breaches would include the failure of the company to make the progress payments called for by the agreement, the failure of the developer to reach the milestones called for by the agreement, or the failure to create a website that is acceptable to the company under the acceptance provisions of the agreement.

As with many other information technology agreements, certain provisions of the website development agreement should be stated to survive any termination or expiration of the agreement. Consider including in the survival clause obligations of the parties with respect to confidentiality, noncompetition, dispute resolution, certain warranties and representations, limitations of liability, indemnities, and ownership of intellectual property.

Fees and Charges

The fees, charges, and anticipated expenses associated with the services should be clearly stated in the body of the agreement as well as in a fees exhibit. The terms to be contained in the body of the agreement are typically terms with respect to the following:

■ How the fees and charges are to be calculated and when they are due. Is there any grace period?

■ Interest or other penalties for late payments.

■ Process for expense reimbursement and requirements for documentation of expenses (e.g., is the developer be required to abide by the company’s standard policies on expense reimbursement?).

■ An “all fees” clause that states specifically that all of the fees are stated in the agreement and there are no other fees to be paid by the company to the developer, except for those stated in the fees exhibit.

A separate fees exhibit is commonly included. Such an exhibit typically contains the actual fees to be paid by the company to the developer and the payment schedule. It is important to be as precise as possible with respect to the fees. If additional fees are anticipated, care should be taken to negotiate the rates ahead of time and include those in the fees exhibit to the website development agreement.

 
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