In today’s parlance, a design agreement (sometimes confused with a design retainer contract) is a contract in which one party (the developer) agrees to design, develop, and perhaps maintain an Internet website for a second party (the client). Confusingly, design agreements may also refer to designing and building (”design-build agreement”) houses or other structures. What is more, a design agreement (which is sometimes confused with a design retainer contract) may simply be a contract between a graphic designer and a client for the development of an artistic creation, such as a sculpture or a piece of artwork.

The version pertaining to the digital world has perhaps become the most prevalent of all varieties in the last few years, as the Internet continues to boom and websites proliferate. In this iteration, a client engages a developer to create an Internet website. The relationship between the parties is usually one of owner and independent contractor and oftentimes ends as soon as the developer has completed the design and implementation of the website. Sometimes, however, the client may request not only the initial design services but also continuing maintenance services. Further, the client may seek to have the website hosted on the developer’s servers, as opposed to a third party’s servers. If the latter case, the client will authorize the developer to access, for the duration of the performance of the services, the client’s space on the third party’s servers.

The scope of work defines much of the other elements of the agreement. Once the design is agreed upon, the other provisions fall into place. Cost is a big one. Generic website designs may be accomplished for a flat fee, while more intricate, labor-intensive designs will likely call for hourly rates. Sometimes agreements display a mix of both. As was mentioned above, some agreements may incorporate not only fees for the design but also costs for continuing maintenance and/or hosting services.

Intellectual property rights are perhaps equal to cost in terms of significance. One question to answer is who will own the intellectual property rights to the website, notably the site’s source code. One would think that the client would be the owner, but this is not always the case, particularly where the developer has greater bargaining power or particularly new and unique technology. In most cases, however, assuming the website is launched, the client owns all right and title to the intellectual property developed in the creation of the website. Early termination of the agreement may allow the intellectual property rights to remain with the developer, subject, of course, to confidentiality provisions.

If the developer warrants its services and the website (many agreements have no warranties of any kind), the warranty will be relatively brief, only 30 to 90 days and state that the website will be bug-free for such time. If, however, the client makes modifications to the website during this period, then this warranty may evaporate. Further, design agreements limit any developer liability for losses suffered by the client.

The key provisions to design agreements (which are sometimes confused with design retainer contracts) are and will likely remain the scope of work, cost, intellectual property, and termination. These provisions must be clear between the parties to have an effective design agreement.

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