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Design and Usage Contract - Need Your Opinion

Thread title: Design and Usage Contract - Need Your Opinion
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11-03-2012, 06:31 PM
jeremyb is offline jeremyb
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  Old  Design and Usage Contract - Need Your Opinion

Hello everyone I am new here. After stumbling across this forum, I would like to say that it seems to be one of the better web design forums I have yet to run across so far.

I have a few questions and would like to hear everyones' input please. Also, can you please indicate if your opinion is backed with experience. ie: if you are a lawyer, another web designer, and so forth.

I have been dealing with web design in some sort of form or another for well over ten years now. Back ten years ago, we designed primarily for advertisement purposes, now we are designing for functionality. I am designing applications that are driven by PHP/MYSQL today opposed to html/css pages back in the day. Originally back in the day we charged hourly for services performed on designing and creating websites. Upon receiving full payment the Customer owned the rights to all the html/css code. Therefore, if a customer was not satisfied with our services at any given point of time, he/she could get a copy of the website and switch providers. Never did we have any problems that led to a legal issue therefore, I never knew what the actual law required or stated regarding ownership of code. Today, the applications I design can be used for multiple clients and well as multiple industries and I would like to protect my company as well as my code ownership.

In the past we charged a design fee and a hosting fee for our services. Of course the hosting fee was monthly, however the design fee could be a one time payment or broken up over a term contract. What I would like to begin doing is charge a "setup fee" which would essentially replace the "design fee". The difference in the two services are as indicated. The setup fee would consist of branding the php application to the customer's needs. ie: company logo, colors, products, etc. In some cases the "setup fee" will consist of building a whole new php application to fit the customer's custom needs. Where as the design fee covered the cost to totally start from stratch with a website that realistically could not be used for other customers. Then I would like to charge a monthly fee which will grant the customer usage rights only. Never would the customer own rights to the php files as well as any of the php applications. I am not sure of what to call the monthly usage fee. For example, can I or should I call it a monthly licensing fee, application service fee?

Now with all that said, every entry made with the php application will send an email to the customer with all the content in which will be added to the MySql database. I feel this is their content and the customer owns this information, which is basically only text. It should be the customer's responsibility to back this information up and protect it. If a customer chooses to leave our company, in actuality they will quit using our service and they have all the content up to date and we are both clear of any agreement. Kinda like cable service, you quit paying the service and the service is terminated.

Listed below are some of my reasons for changing my method of business:

As many of you already know web design business is very competitive. If you can distribute the man hours it takes to build 80% of a php application among a few similiar customers you can make it more affordable up front. This will allow you to recap your time invested much sooner and also make better wages for your time.

This also would lock your customers in with you. Once they get used to using your service and are totally satisfied it makes it harder for them to leave.

You can increase your revenue depending on the agreement of usage; For instance, let say a customer has more the one location, you can charge according to location. Where as if you charged for design you tend to cut yourself off of this opportunity.

You could also have control over your customer possibly reselling your work to his/her competition.

In the event the customer sells the business off you would have the opportunity to sell, recreate, or even modify your service for the new owners needs.

From experience I always host the entire website as well as any php applications, which allow me full control over it. In the event I have problems with a customer paying me, I have the upper hand. If I dedicate my time and service I feel it is only right for the customer to agree to his part of the deal, payment. If a customer continues to pay late, I have the opportunity to interrupt service. Otherwise, you can play cat and mouse to get paid each month. Some of my comments and suggestions might sound harsh however, it is a part of doing business as many already know.

Please give me your opinion on the matter and I hope this may shed a light on any designers out there who may be experiencing similiar issues and thinking of changing their ways of charging and wording their contracts.

Most of what I am asking reflects whether to use a contract or not use a contract. I am sure that rather you have a contract or not, there are some laws in place to protect both parties. I just want to protect my services and maintain great customer support for my customers.

11-04-2012, 02:48 PM
Lowengard is offline Lowengard
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Jeremy B

I am responding to your post as an adviser to small business owners with 30+ years experience.

It took me a little while to figure out what you're asking the community* but I understand the fundamental question to be:
Is it possible to run my business with the parameters described and not have a contract?
Assuming this is true, you need to think about the following:
  • At-will professional relationships work best when both parties have an excellent and clear understanding of their obligations. They also work best when no customization of services is involved or the relationship is extremely casual--think your cable company or the kid who mows your lawn, not your accountant or administrative assistant.
  • You will in fact have an implied contract, because anything that involves the exchange of money for goods or services carries one. This means you need to be very clear about what you do and what you don't provide.
  • Will this system make it easier to get rid of deadwood but set you up for regular, time-consuming lawsuits if your clients are dissatisfied? (Only you know your clients and the way you work.)

*The bulk of your post suggests you have other questions based on the changes you are making to your business model. I'm not going to discuss those here, because one thing we know about all things internet is nobody ever wants to read more than 500 words.

11-13-2012, 04:01 AM
ramone_johnny is offline ramone_johnny
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Originally Posted by jeremyb View Post
In the event I have problems with a customer paying me, I have the upper hand.
I don't like this approach.

Get paid first, and you wont have this problem at all.

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11-14-2012, 03:09 AM
jeremyb is offline jeremyb
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Thanks to both of you for your input.

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