It used to be that if one mentioned a "design agreement," the context was relatively clear. The parties were talking about the design and construction of a commercial building or perhaps a private residence. In some cases, the parties might have had in mind graphic design, as in the creation of artwork for a magazine, or perhaps a sculpture. Today, however, with the advent of the digital age, design agreements refer equally often, if not more so, to the design of Internet websites.

In its most recent iteration, a design agreement is a contract between a client and a website developer for the creation of a website for use by the client. Oftentimes, the agreement will cover not only design services but also maintenance, including updates and repairs as needed, of the website. The design is what drives much of the rest of the agreement, for the more extravagant the website, the greater the cost, the more maintenance will likely be required, perhaps the more important the ownership rights, and so forth.

Once the client and developer have hammered out the design, the rest of the agreement flows from there. Price is perhaps the next provision in importance. Those agreements that deal with basic, off-the-shelf designs may incorporate a flat fee, while more intricate sites may call for hourly rates; or a blend of both.

After the developer has designed and created the website, the site must find a home, so to speak, on the Internet. This goes to the question of hosting. Many times, the developer itself will host the website on the developer’s own servers. The agreement, thus, may discuss a hosting fee above and beyond the developer’s design fee. Other times, the client may wish to have the website hosted on a third party server. In the latter case, the client will provide the developer with authorization, for a limited duration, to access this client’s space on this third party server.

Intellectual property is highly germane to design agreements and will remain so as long as technology continues to advance. Ownership of this intellectual property—including, importantly, source code—is central to the design agreement. While agreements fall of both sides of the fence on this issue, it is more common that the client, not the developer, has final ownership of the intellectual property developed for the website. The developer, thus, is an independent contractor producing a work-for-hire. While the work product comes from the developer, it belongs to the client. This is assuming, of course, that the website reaches completion. If the assignment is terminated before completion, then the developer may retain the rights to the intellectual property, subject to confidentiality provisions, of course.

Equally, the developer protects itself with limited warranties. In contrast to car warranties that may go five or even ten years, website design warranties, if they exist at all in the agreement, are more likely to be for 30 or 60 days and state that the website will be bug-free for this time period. All bets are off, however, after this time period ends or if prior to this date, the client begins making its own modifications to the website. The agreement will likewise limit the developer’s liability in the event the client suffers loss due to the website.

Given the complexity of the subject matter, design agreements have the potential to be (and some are) voluminous documents. Most, however, are relatively short contracts, only a few pages in length. This is a good thing. So long as the major terms—design, cost, intellectual property, and perhaps termination—are clear in the minds of the client and the developer, there is little need to weigh down the document with so much legalese.