Project contracts summarize the common interests of a collaboration in detail and include all the ifs and buts should something go wrong. You should always have a solid contract to protect yourself against a bad scenario, even if it doesn't seem like it right now. So let's get into the details!
1. Formulate an elaborate Project Scope
The project scope clearly defines which details, functions and features of a web project are to be developed as individual items. Here the boundaries are set and explicitly excluded what is not part of the project. In greater detail, this can include designing a certain number of pages and sections, developing specific functions and design, providing 3D assets with detailed description and real-time effects with inspiration.
It outlines as precisely as possible what can be named and grasped and allows inspiration and creative direction to be determined in order to achieve the best possible description of the goal.
From a technical point of view, it includes which tools and programs are used for development, for example how code must be documented, in which format it is ultimately provided and how the possible integration of content and software into a specific target environment takes place.
Additional responsibilities may outline what the project is, what its creative design is, requirements for the UX and how it needs to be implemented, what testing process and prototyping is required, and what regulatory compliance needs to be observed.
If the project scope is formulated correctly, then, similar to the project briefing, you should be able to understand the entire project without having any further questions. Every detail that is not explicitly stated is left to inspiration. So it's worth being as precise as possible.
2. Make a secure Payment Structure
The payment structure regulates precisely how much, when and under what conditions payments for the project take place. In a large website project, it is common to set a total monetary value. The amount is calculated from the number of hours the agency plans to implement the individual project items multiplied by their hourly rate. When working with a service provider for the first time, you shouldn’t pay too much in advance and under no circumstances should you pay 100% in advance.
For most projects there is a deposit of roughly 30-50%, and optionally several milestone payments that are made as soon as certain items from the scope are successfully developed and then a final payment before the project files are handed over.
The down payment should not be higher than 50% and, especially for very expensive projects, it is worth including several milestone payments. The lower you can negotiate the down payment and the further you can delay further payments, the safer for you as a customer.
A good payment structure protects you against fraudulent behavior, is clear and easy to follow and guarantees fair cooperation between you and the respective agency.
3. Set proper Timeline and Milestones
In a large web project, several stages (e.g. strategy, design, development) and their individual sections (UX, UI, prototyping) take place. Each section, in turn, contains individual clear tasks. The so-called “items” that you already know from the project scope represent precise elements and goals for implementation that are being formulated.
Clear times and time periods can be forecast for each item. You should ask the respective agency to always provide this information. The sum of the total time information for the items results in the time frame for certain stages and for the entire project. It should also be stated how the time estimations work together in a project timeline.
Determining clear time periods, how and when they start, whether they are interdependent or can be developed in parallel, gives a fine overview of the project's temporal prospects. It quickly becomes clear in advance which tasks are the most time-consuming, how likely it is to implement a project in a certain timeframe and where potential time wasters lie.
4. Clear Intellectual Property Rights
This must determine who ultimately holds which rights and licenses for which work. As a customer, find out in advance what licensing the agency offers and which uses are important to you. For example, do you want to resell the services you receive, license them yourself, or just use them for your company?
Many agencies resort to solutions in which they develop a basis (e.g. for a 3D configurator) and then further develop it individually for each customer. An agency could also include 3D assets in its work that it has only acquired or rely on existing software that they modify further. It’s always important to find out the respective legal situation in order to determine whether the desired benefit is covered.
Ask the agency specifically whether you create everything yourself, what solutions you use and what the licensing format is. Under no circumstances should you use vague formulations such as “you can use it without any problems” and demand precise statements. The rights should then be included in the contract and guarantee you as a customer the necessary right of use as soon as the order has been completed and the payment has been made.
5. Sign a Non-Disclosure agreement
If the confidentiality and protection of your project's data is important to you, then you should consider a non-disclosure agreement (NDA). Many agencies have these documents ready or you can create your own and submit it to them. It’s a common practice. NDA documents contain which project and company data can be used, stored and shared. If there is a data leak and measurable damage occurs, the NDA ensures who is liable for it to what degree.
Make sure that your NDA secures all important data and determine how the NDA should apply in the event of damage. Communicate openly with the agency about what data is sensitive and what should not be shared publicly.
6. Clarify Communication, Responsibilities and Change Requests
How the collaboration will work during the project should be discussed in advance and then written down in the contract. This includes how the communication between the two parties will look like, who the contact persons are and how and where the communication takes place.
Email can be used as an exchange and Google Meet can be used for meetings. A regular meeting time on certain days of the week or a specific time budget can be set for project meetings. Working days and holidays are also disclosed and how quickly a response time can be expected.
The mutual obligations are also mentioned. Agencies are often dependent on information and data provided by the customer during the project. This can be 3D assets or expected feedback to be able to move on to the next task. A regulated exchange must also take place in order to offer the customer insight into the project and the opportunity to give feedback. The contract can specify when and how often this exchange should take place.
By establishing and defining these responsibilities in the contract you help prevent the work from falling short of the common interest.
7. Formulate Acceptance Criteria
The acceptance criteria are essential to determine the quality of the work and when it is considered successful. The requirements are already technically defined in the project scope. Here you can now add the standards according to which the customer can evaluate the project in order to be able to label it as successful or where further work needs to be done.
Various acceptance criteria can be tied to larger business goals, include quality acceptance measures, or come in the form of a test whose result is used as a success criterion. In most web projects, success only is tied to the implementation of the defined items. You can discuss these criteria and then include them in the contract.
Creative work and customer satisfaction are difficult to use as criteria. The best thing to do here is to get an insight into the agency's unique style based on their previous projects and make sure to exchange ideas closely during the creative process.
8. Include Insurance and Liability
What if the time frame is exceeded, a payment is late or a technical problem arises? Who is liable for what and when does compensation apply?
Good execution of these insurances and responsibilities in the contract is important in order to be able to react quickly in the event of errors and resolve them. To execute this well, all major events during each project must be documented.
It may be that it is not just the agency that makes mistakes. If a client fails to fulfill his communication obligation or delays a payment, he might also compensate the agency for the time that has passed. On the other hand, the agency is responsible for technical defects in individual items or when delays happen.
In the event of damage, the entire project value can usually never be refunded. Damage can only be claimed for the individual parts that do not work. If individual missing parts affect the overall function of the project, it must be defined in advance how this should be dealt with in this scenario.
What if force majeure takes place
An inherent error may occur in the development environment for which neither of you are responsible, or a technical issue forces you to take a different path in order to implement the project. What happens now?
Communication is the key here and the contract should offer a fair solution for both of you. If this happens, an agency can only be held responsible partly. Above a certain amount of work, they will have to charge more money for the extra effort they have to put in. The customer should be closely involved in all these problems and a joint solution needs to be worked out.
If the agreed changes are major, a contract change can then take place or a new contract can be drawn up that outlines these issues and requirements in detail.
9. Set Termination Clauses
Sometimes it is important to cancel a project. An important event can upset all plans or financial hardship can be the deciding factor. In any case, it should be defined whether, how and when both parties can terminate the contract.
Tip: In most western countries there is a legally required contract cancellation right of 14 days, which the customer can make use of. This applies to nearly all contracts concluded online, even if it is not written in the contract or the contract tries to exclude it. Pay attention to which legal location is used, find out about the local situation and ask the agency about your right of withdrawal and obligations.
In addition, extraordinary termination clauses can be included for individual situations. If a contract is terminated, the work that the agency has completed in the previous period (e.g. completed by items) must still be compensated. If this is important to you, discuss it with your partner and then include it in the contract.
10. Set an Escalation Procedure
An escalation procedure is a prescribed process that is carried out in the event of a problem or error. Make sure to find out whether the agency has implemented such a process and how it specifically works to resolve any issues that arise and ensure customer satisfaction.
This process and the individual steps can be recorded in the contract. These can describe the different levels of escalation and what measures will be taken in each case. This includes documentation, responsibilities, triggering events, time frames, opportunities for review and assessment as well as resolution mechanisms and follow-up.
10. Final words
A contract is important to put everything in writing that you agreed upon during the entire exchange about your website project. It includes a detailed overview of the project, payment, communication, time frames and all on how to act in case of problems.
In the end, however, a contract is only necessary if the collaboration does not go as expected. Focus on choosing your partner and project as if there were no contract at all and you would spend all money upfront. It will help you to understand if you really trust the agency with your project.
Sometimes collaboration is doomed to failure even before a contract is concluded. If you notice that you don't fit together with a certain agency or you have doubts about the implementation of the project, then don't enter into a contractual relationship at all, even if the conditions seem tempting.
Conversely, the opposite applies. When your partner seems great and you have already successfully implemented a project, it is still worth drawing up a proper contract and checking it in detail.
After all, you never know what can happen. So better be safe than sorry!
