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PROFESSOR MICHAEL GEIST
ELECTRONIC COMMERCE LAW WORKSHOP
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ASSIGNMENT #1 (Developer)
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DUE DATE: WEDNESDAY, JANUARY 31, 2001 - 4:00 pm
DELIVERABLES:
- Web Site Development Agreement
- Memo describing negotiation strategy and outcome. Memo should also discuss your perspective on the agreement and indicate what you might have done differently if given the opportunity.
FACTS:
You are an attorney representing Websight Creations, a well known mid-size Web development firm based out of New York. The company is very busy at the moment with several major projects in the legal and finance sectors.
Websight has been approached by Focuslaw, an Ottawa legal information firm with offices in Toronto, New York, and Paris, about creating a company Web site. The company has been late to market with several competitors already operating online. Moreover, rumours within the industry suggest that two other competitors will be debuting their sites soon.
Business representatives from both companies met recently to work out the specifics of the arrangement. You have been asked to work with the Focuslaw legal representative in negotiating and drafting the final development agreement.
Websight has provided you with the following information. Note that the company is aware that it may not get everything it hopes for in this agreement.
- The company is completed overloaded at the moment. Although Focuslaw would like the site done quickly, it may be unrealistic to expect that anything will be completed before the summer. The company is willing to make every effort to get the job done but does not want to be penalized should delays occur.
- Websight has held negotiations with several U.S. based legal information providers about Web site development, though no agreement has yet been reached. The company does expect that such work could materialize in the future and is thus reluctant to enter into an agreement that would restrict its future client base.
- Websight's success is due in large measure to a unique "look and feel" it has created for several clients. It plans to use a similar look for Focuslaw and wants to ensure that it can continue to do so for other clients.
- The largest component of the job will be the creation of legal information database for the Web site. This will involve a significant learning curve for the company since it has not created such a database before. One of the most attractive aspects of this project is the opportunity to learn how to create such databases for future projects.
- Websight typically asks for 50% payment in advance to cover salary and licensing fees with an additional 25% midway through the project and the final 25% upon completion.
- Websight has been very successful in marketing additional services to new clients. Ideally, it would like to service the Web site for at least three years with the opportunity to bill for additional work such as technological upgrades and new content additions.
- Since much of the site's content is coming from legal sources related to Focuslaw, Websight would like to ensure that Focuslaw obtains the necessary copyright permissions.
- Websight's popularity has been enhanced by the exposure its clients have received. The company takes a hands-on approach to marketing the site by focusing on a well-marketed site with minimal "legalese."
- The company is willing to indemnify Focuslaw for its own errors but notes that most problems develop at the client end from undocumented instructions and other miscommunication.
- Since the company is based in New York and is familiar with the New York court system, it would like New York law to govern the agreement.
Do not concern yourself with purchase price - assume that the business people have reached agreement on the price and you are being asked to provide the fine print.
A sample agreement can be found at the course Web site. Feel free to use it as a precedent (or search the Web for others). Please keep in mind two pieces of advice from last night's class:
- Do not rely too heavily on the precedent. The best agreements are those that best reflect the desires of the parties through original drafting.
- Be creative - while price may not change, everything else can be negotiated.
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