Given the costs associated with hiring employees, a vast majority of businesses now hire independent contractors to build and/or maintain their websites. This raises a host of legal issues.
First and foremost, it should be a requirement that the person or business developing your site agree to put everything in writing. As with any contractual situation, oral agreements are useless. Handshake agreements and oral promises simply are not enforceable in court. Sad, but true, so get it in writing!
The second issue to consider is jurisdiction. The World Wide Web is aptly titled. If your business is in Los Angles and your site designer is in Toronto, how are you going to enforce the agreement? At a minimum, you should designate the jurisdiction of any disputes as you desire, to wit, Los Angeles in this case. That being said, you need another hammer as well.
The hammer is, of course, the requirement of milestones. Milestones are simply stages of site development. At each milestone, the site designer is required to meet certain thresholds, get approval from you for the progress made and payment of an indicated amount. Milestones are critical because web designers tend to have an artistic side, which means they can take forever to accomplish a site design unless “motivated”. Milestones motivate them.
A major issue that is often missed is the assignment of copyright. Most site owners go through the following thought progression. I am the owner of the site. I am paying this person to create the site based on conversations we have had. When I pay them, I become the owner of the design including copyright of it.
While logical, this thought process is simply wrong. Under federal law, the creator of a work is the owner of the copyright unless they are the employee of a business. In this case, our site designer is an independent contractor. As a result, they maintain ownership unless you take affirmative steps to obtain it. This is handled by including a clause in the agreement that details the specific IP rights to be assigned from the designer to you. Fail to include such a clause and you could end up seeing parts or your entire site reproduced on other domains!
As you can see, there is far more to hiring a site designer than just finding a qualified individual. Think through the process, negotiate a deal, get it in writing and make sure you obtain all the intellectual property rights! Don’t use a pre-printed form!
source;student law
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