Are other design firms considered third parties?

Hi all,

I have a contract with a client stating that he “must not disclose any of those materials to any third party” without our consent, materials being the website we designed.

We have also retained the website as our IP but granted the client a “non-transferable license” to use the website for his own “business purposes”.

If he hires a different design firm to modify the website, (a) does that design firm count as a third party, implying a breach of contract? And (b), if so, do I have the right to rescind the license and take down the website?

It’s a tricky situation, so I’ll be sure to protect myself further in the future, but how do you recommend I deal with this situation? Appreciate any thoughts and advice!

Limiting your client from showing code to others is a big statement… Your clients are going to work with other parties over time whether it’s to replace you or augment services and locking them in will come back to be both an enforcement issue and potential roadblock to business. I’ve seen enterprise providers write in exclusions like this but even then there are usually enough interface layers that anyone not literally redeveloping the core application can do their work without it being an issue.

That doesn’t mean you can’t own underlying software but simply that you have the realize what you are asking of clients, and how they may react upfront… or if you push over what they see as a non issue. Legalese is one thing, a mutual understanding is another.

That all said, while I am by no means an attorney, a third party is generally considered anyone other than the client who has an agreement with you including a firm they hire. Your agreement can, and should, specify this term in detail to clearly exclude agencies working on behalf of the client who can become murky as they may be considered “agents”… also think sub-contractors, and other circumstances where the client may claim an affiliation beyond that of an outside provider.

Third Party legal definition of Third Party. Third Party synonyms by the Free Online Law Dictionary.

As for your rights to take action, that’s a much different story and something your agreement should also cover. In the event of a breach what is the recourse? Is there notice periods? Arbitration? Flip that against the damages you’ll cause [the potential risk] and the benefit to your business and then consider… does the reward outweigh the risk [or put another way, is keeping our code secret that big a deal]?

Consulting proper legal counsel before claiming breach is a good idea as many “little” things can come back and bite. If the costs don’t merritt that level of action then I’d seriously question is there’s enough benefit to warrant the move…

It’s a tricky situation, but of your own making! What exactly are you trying to protect here? You’re talking about other ‘design’ firms, so I assume you also retain ownership of the design itself? Why would you do that?

Did you design it for them at a knockdown price or for free? Why is it so bad for the client to hire a third party to make changes to their own web site?

Could you fill in the gaps for us?

Hello all and thank you for your replies.

The situation is as such: client pays us a fair price for our initial design, but hires a cheaper designer to use what we created to complete the remaining pages of the website.

‘Protect’ is an overly strong word – sorry for using it – but what I meant I want to avoid is having a cheaper designer use my work to finish the rest of my client’s website, which, given the existing templates, is much easier than creating a website from scratch.

Also, these terms were taken from the Sitepoint Web Design Business Kit. I believe the key here is “without our permission”. I certainly would have no problems if the client hires a design firm to replace me in the future if I had created 100% of the initial site, but the client is getting me to do 50% of the site and hiring someone else to do the other 50% by making use of my code.

Right so basically you were hired to create a site, you designed it, were paid for the design, and instead of letting create the actual site, the client cancels the project and hires someone else to code it all.

Simple answer is - you were paid for the work you actually did, so it seems unnecessary to talk about taking their site down. I’m also not sure how you’d do that, it certainly wouldn’t be legal.

If I were you, I’d be more concerned why they decided to use someone else in the first place. Why did your relationship break down? People don’t tend to cancel mid project just because they found someone a little cheaper, it normally runs deeper than that.

But chalk it up to experience, try to work out what went wrong and most importantly, move on and leave them to it.

I really don’t think there’s much you can do to stop a client cancelling in the middle of a project, it’s up to them. As long as they pay what is owed up to the point of cancellation, that’s fine IMO. Make sure your contract covers you in the event that they still owe money at cancellation- that’s when it gets more messy.

Rather than trying to prevent clients from taking their business elsewhere, I would concentrate on being competitive enough so that you don’t have to worry about it. Playing defense like that isn’t going to make you win in business - you have to be the one that the client wants to work with. Not the one he bails on :slight_smile:

From the OP’s second post it sounds like it’s even less than that…

The situation is as such: client pays us a fair price for our initial design, but hires a cheaper designer to use what we created to complete the remaining pages of the website.

This being the case you got fair value for the work. What happens from there is really a function of how much value you can deliver and if your cost justifies it. Sagewing and shadowbox are dead on here – focus on how you can keep your clients for the long haul, not how you can force them out of selecting an alternative.