I am about to begin development and design for a CMS ecommerce website for a client, and have several questions about how to structure my contract with him. He desperately wants me to do the site for him, and as he has agreed to my price, I am certain he will agree to other terms. I want to make sure I am legally protected.
Copyright
As the developer, I would like to be the copyright holder on the site. The reason I want to own the rights is that I believe that I can sell this website to new clients that are within the same niche industry. The client has provided me with several images to use on the sight. While he claims to have license to these images, I suspect that they were simply obtained from a Google Image search, and that he doesn’t have license. I am concerned that if I am the copyright owner that I could be sued for not having license to the images. How can I protect myself from lawsuits?
Also, if I own the copyright, do I need to give him access to the site files? Note that this is a CMS site, where I can grant him backend editing access. This way, he can edit the site in the backend without actually having access to the website hosting account.
Payment & Hosting
We have verbally agreed to payment terms including a 50% down payment and the remainder in set monthly installments for four months. I want to make sure that I get paid the installments. Can I put something in the contract saying that hosting may be terminated if installment payment is not received?
Unless your agreement with your customer states that it is a “work for hire” you will retain the copyright for the site. If you have a written agreement, you can use a belt and suspenders and state in the agreement that you retain the copyright.
You can put almost anything in an agreement you wish. If you want it in the contract, than by all means, put it in the contract. You can certainly say hosting may be terminated if installment payments are not received.
Thanks, thats’s very helpful! So if I retain the copyright by using a belt-and-suspenders approach in the written contract, what about IP claims for images on the site? How do I make sure than the client is liable and not me?
It’s not clear from your post, but is this CMS a system you’ve already created before meeting the client, or is the client paying you to develop it from scratch?
You refer to owning the copyright to the entire site. Does that mean you also wish to own the actual graphical design itself?
If your client wishes to cut ties with you for whatever reason, what can he take away with him? Does he have to start everything from scratch?
How does your client feel about you offering this same CMS and your services to all his competitors, while also holding all rights to his entire site?
Hey thanks for your reply! Lots of questions that I am glad to work out with fellow industry professionals, rather than getting into it with the client over.
This is a Joomla CMS site that I have developed to integrate an industry specific ecommerce component. I also developed some commercial extensions for the site to meet industry specific needs.
I am not interested in owning the graphical design, although I did graphically design the site. I would merely like to own copyright to the functional aspects of the site, and client could retain rights to the design. I have no idea how to write this into a legal contract, and would greatly appreciate any help.
Good question… here are my thoughts (I am wondering if this is reasonable): If he wants to completely cut ties (meaning maintenance AND hosting), then he would have to start everything from scratch. If he just wants to cancel my maintenance service, then he could continue to pay me to host the site, and perform maintenance himself using backend admin.
Good point, but I don’t think he would have a problem with it due to the nature of the industry. Each business in this niche industry operates in a tightly defined geographic region. I would not offer the site to “direct competitors,” ie. a business in the same geographic region with an identical operation. I would be selling the site to similar businesses located in different geographic areas and hence no overlap in customer base.
Who paid for the development of these industry specific extensions? Did you develop them independently of this client, before you met him, or did he instruct you to create them and then pay you for your time taken developing them?
I’m just trying to get the full picture here, as its not clear just how much of this project was developed independently as an industry-specific hosted solution, and how much of it was created from the clients’ money (and his industry specific knowledge). You’ve also initially talked about how you’re just ‘about to develop’ this ecommerce CMS, and now talk about how you’ve already ‘developed’ it, past tense - what exactly is the situation in this regard?
To make things a wee bit more complicated, your extensions would also become GPL licenced, if you have distributed the source code. As soon as someone else gets a copy of the source code (and I’m not sure what happens if you just uploaded it to their hosting and noone has access to it), the code would be distributed. If it uses the Joomla API, such as by extending JTable or similar, it would be required to be GPL.
For what its worth, here is my licence clause (for New Zealand copyright law) - leaving the copyright of the whole system with the client and leaving all copyright for underlying partial concepts with me. This is the default position of N copyright law.
"Notwithstanding s 21(3) of the Copyright Act 1994, the Client acknowledges that until it has paid the charges for each stage of the Project Plan in full the Developer and not the Client has all rights to and risk in the Software and the Associated Documentation for that stage of the Project Plan (whether partially or fully completed).
The Developer acknowledges that all existing Software Code provided by the Client to the Developer for the purposes of the Project shall at all times be and remain the intellectual property of the Client.
Any software built and/or developed by the Developer for the Client during the term of this agreement in relation to the Project shall not be used by the Developer in its entirety as a product for any client of the Developer other than the Client.
For the avoidance of doubt the Client acknowledges that the Client has acquired no rights in relation to the underlying open source code that has been utilised in relation to the Project or to such individual pieces or portions of code developed by the Developer dealing with underlying basic concepts for the Project. The Client acknowledges that the Developer retains the right to reuse underlying basic concepts, such as the shopping cart or the generic access control libraries, for existing and future clients even if they were developed for the Client in the first instance. The Client further acknowledges it will receive no benefit for any reuse of the underlying basic concepts by the Developer pursuant to this clause.
For the avoidance of doubt, nothing in this Agreement shall not prevent the Developer from providing services to any other person or entity seeking to engage the Developer to provide services to them, whether they are in the same or different industry to the Client."