Contract Example – Contract Agreement Between Parties for the Design of a Web Site

Version: 5

Programme, Project and Change Management

Capacity Building Programme

Supported by Communities and Local Government

Contract Agreement Between Parties for the Design of a Web Site

Synopsis - The Capacity Building Programme Communities and Local Government (CLG) and the Local Government Association (LGA) established the Capacity Building Programme in April 2003, as part of a three-year initiative to support improvement in local government. Additional funding secured in the Spending Review 2004 has extended the programme to 2008. The emphasis is now on supporting Improvement partnerships either at a regional or sub-regional level. Improvement Partnerships provide a framework with which authorities can act collectively to address common challenges, share best practice and share resources. The programme aims to enhance and develop councils' confidence, leadership and skills to advance improvement as well as developing their capacity to learn, innovate and share knowledge and expertise about what works and how. In addition, it provides support to local government to drive forward its own development. It can also help to respond to new priorities such as improving efficiency and the implementation of the pay and workforce strategy. The project, programme and change management (ppm/cm) web content has been developed as part of the Capacity Building Programme and has been produced to help Local Authorities and other public sector organisations to establish a project and programme organisational culture and to increase their overall capacity to deliver change.

CONTRACTEG-09-V5-Feb07

Contract Agreement Between Parties for the Design of a Web Site

1 Disclaimer Communities and Local Government (CLG) does not warrant or guarantee that the information supplied in this document is accurate or up to date and it shall not be held to be liable in any circumstances for any loss, damage, whether direct or indirect, or in respect of any action, claims, demands, costs, charges, and expenses whatsoever in any way arising out of, the supply of this documents by Communities and Local Government (CLG).

Whilst all care and diligence is taken to ensure that the information held within this document will be of a general guidance and assistance to councils in creating legal contracts for the management of Suppliers, Consortia and Partnerships within their own Authority, It is the responsibility of the authority to ensure that all contracts are approved by there own legal representative in respect of validity, legality and conformance to local authority Standing Orders, under no circumstances will Communities and Local Government (CLG) be liable for any of the following losses or damage (whether such losses where foreseen, foreseeable, known or otherwise): (a) loss of data; (b) loss of revenue or anticipated profits; (c) loss of business; (d) loss of opportunity; (e) loss of goodwill or injury to reputation; (f) losses suffered by third parties; or (g) any indirect, consequential, special or exemplary damages arising from the use of this document.

2 Document History

Version Number

Change Date

1 Draft Document for Review 20 Mar, 2005

2 Incorporation of changes resulting from quality assurance reviews 31 May, 2005

3 Proofreading of the Document 16 Sep, 2005

4 Formatting and Presentation of Document 23 Sep, 2005

5 Changes to presentation and format; updating to reflect changes in ownership and government organisation; a synopsis of the Capacity Building Programme and further information sections included.

Document number assigned and included. File naming format amended and revised document published.

15 Feb, 2007

3 Further Information In all cases your regional director of local government practice is your first point of contact, except for fire and rescue authorities who should contact their business change manager. IDeA regional associates may also be able to help to broker partnerships, help authorities share experiences and to find information. Contact information is also available on the Capacity Building website.

Published by: The Improvement and Development Agency (IDeA), Communities and Local Government (CLG) and the London Borough of Lambeth.

Publication date: February 2007

CONTRACTEG-09-V5-Feb07

Contract Agreement

XXX AGREEMENT

Date:

Parties:

xxx of (address) (“xxx”); Company number:

[CLIENT DETAILS] (“the Client”).

The parties have agreed the terms and conditions set out in the Term Sheet and the General

Terms in relation to the work to be carried out by XXX in relation to the design of a web site for the

Client. Together this constitutes the Agreement.

SIGNED by

For and on behalf of

XXX

SIGNED by

For and on behalf of

[THE CLIENT]

TERM SHEET

General Description of Work

“Work” as used in the attached General Terms means the work described in the Project Initiation

Document (PID) which is a functional and technical specification document delivered at the end of

the project definition phase, price (excluding VAT) and a timetable of work.

Implementation of Microsoft Content Management Server (MSCMS), Microsoft Commerce Server

(MSCS) and MondoSearch. Providing a website usability audit, redesign, integration of data and

personalisation as defined within the Business Requirements Specification and Functional

Requirements Specification.

Payment*

[PROJECT AMOUNT]

* Capital costs will be arranged by the [THE CLIENT] directly.

The cost of the project will be agreed by all parties on completion of the TERM SHEET and be paid

according to an agreed invoice schedule.

Invoice Schedule

Milestone Payment % Cost (£) Due Date

Total

Invoices are payable within 30 days after the date the invoice is submitted, in accordance with

clause 2.1.

Deliverables

Source code and object code in all software and together with all other materials delivered under

this agreement (excluding that which is described in 5.3).

Start Date:

DATE

Timetable and Milestones for completion of work:

Date for deliverables, as set out in clause 1, to be delivered to be as set out below.

Business Requirements Specification

Approval

Project Initiation Document Approval

Approval of Functional Design

Specification

Approval of user interface design

Approval of Test Plan

Development work complete

Alpha testing passed

User training

CMS Content Freeze

User acceptance testing sign-off

Hand over

Project Close

At all stages a sign off will be required before the next phase is begun. Any unreasonable delays

in returning any sign off and any delay by the client in keeping to any deadlines will affect

subsequent deadlines and thus the delivery date. XXX will not be liable for costs incurred by the

client to the extent that those costs result from the client’s unreasonable delays. The client will

notify XXX of dates to be avoided for project sign-offs as far as possible in advance and these

dates must then not be used. The client rejecting any stage of the Work will not be treated as a

delay and the client and XXX will use reasonable endeavours to amend and agree a new timetable

and milestones for completion of work without cost to the client, but in any event XXX will complete

the work within a reasonable time.

Delays by XXX – see clause 3.2 in general terms.

Contacts:

XXX: XXX, Head of Business Development, xxx@XXX.com

Client: [THE CLIENT]

General: The attached general terms apply to this agreement.

General Terms

Applicable to XXX Agreement

1. THE WORK 1.1. Subject to the Client complying with its obligations under these general terms, XXX agrees

to complete and deliver the Work to the Client in accordance with the Timetable (attached

in clause 3 of the terms sheet).

1.2. XXX may engage sub-contractors to perform any aspect of the Work, with the prior written

consent of the Client, not to be unreasonably withheld. This will not affect the quality of the

work. XXX shall be responsible for any necessary insurance for any sub-contracted work.

XXX shall take out Public/Products Liability and Property Insurance to the value of at least

£xxx pounds per occurrence or series of occurrences arising from the one event in relation

to XXX’s, or their subcontractor’s, liability. Such insurance shall contain an indemnity to

principals clause.

2. PAYMENT

2.1. Payment shall be due and payable within 30 days after the date of invoice submitted by

XXX on completion of the Work to a reasonable standard and its acceptance by the client.

And shall be of the amount specified in the TERM SHEET, subject only to any variation in

amount caused by a change in the Work requested by the Client, which shall be charged

for on a cost and materials basis, according to rates as per the Term Sheet. The amount

charged by XXX shall be no more than that specified in the TERM SHEET provided that no

services are performed by XXX that are not detailed in the TERM SHEET. Failure to pay on

the due dates amounts properly due to XXX shall entitle XXX to suspend the provision of its

services and to terminate the Agreement in accordance with Clause 9.2.1

2.2. The Client further agrees to pay or reimburse XXX for any reasonable out of pocket

expenses, including, without limitation, travel and travel related expenses (such as

accommodation, meals, telephone) incurred by XXX with the prior approval of the Client in

connection with the performance of this Agreement.

3. TIMETABLE FOR COMPLETION

3.1. XXX will use all reasonable efforts to complete the Work in accordance with the Timetable

including delivery of the Deliverables set out in the TERM SHEET, provided that any delay

on the part of the Client in supplying information, materials, approvals and assistance to

XXX shall entitle XXX to revise the Timetable and extend the period of delivery by a period

equal to the Client’s delay.

3.2 Failure by XXX to meet deadlines set out in the timetable, or deadlines being pushed back

due to the Work not being of an acceptable standard, will cause payment to be held back

until the specified project milestone has been completed to the client’s satisfaction and

meets the objectives set for the site as outlined in the TERM SHEET.

4. DELIVERY AND ACCEPTANCE

4.1. The Client will accept or reject each stage of the Work (including, without limitation, the

final delivery of the Work as set out in the Timetable) within 15 business days after

notification from XXX that the relevant section of Work is ready for testing in accordance

with the testing procedure as set out in the Term Sheet. The Client may extend this period

to a maximum of 30 business days; however, any extension may be added on to the project

due date and the Client liable to appropriate additional costs. If the Client rejects the Work

it shall specify in writing the nature of any error, deficiency or inadequacy in the Work (a

relevant section). If the Client does not specifically reject the Work or any part of it within

the time period referred to above, it shall be deemed to have accepted the Work or the

relevant part of it. Acceptance by the Client does not limit the Client’s right in respect of

errors or faults which become apparent after the testing period has finished, but which

could not easily have been ascertained during testing.

4.2. XXX shall have 15 business days to correct any error, deficiency or inadequacy and

submit a revised version of the Work (or the relevant part of it).

4.3. If, thereafter, the parties cannot agree an acceptance of the Work the matter shall be

referred to arbitration in accordance with Clause 16.2 below.

4.4. XXX retains the right to use whichever technologies and or methodologies it deems

appropriate at a per project level. Clients may request the inclusion and/or exclusion of a

particular technology and/or methodology prior to the sign off of the TERM SHEET and

XXX will assess the impact of such a request and may or may not change any contract

based on the outcome of assessing such a request. The responsibility to obtain details of

the technology and or methodologies to be used is solely with the client, XXX do not as a

matter of course include such details in client project documentation.

4.5. XXX use accepted well known technologies to produce solutions. By entering into a

contract with XXX the client agrees to the chosen technologies and/or methodologies being

part of or the whole solution. Any request for changes to technologies and/or

methodologies used as part of the solution must be discussed and agreed prior to sign off

of the TERM SHEET. Once the TERM SHEET has been signed off any changes to the

technology and/or methodology changes will incur significant cost to the client.

5. LICENCE

5.1. All the copyright, patent, trademark, trade secret and any and all other rights in any

software used to complete the Work shall be owned exclusively by XXX subject to the grant

of an irrevocable perpetual royalty-free, licence to use, reproduce, modify, adapt and

enhance the Deliverables and to authorise a third party to carry out the same on behalf of

the Client. This license shall be exclusive in respect of the look and feel of the site and non-

exclusive in respect of all other Deliverables. The Client shall, or any agent/sub-contractor

of the client, have the right to maintain and amend the Work as it sees fit, subject to such

maintenance and amendment entailing no breach of any third party supplier’s rights (e.g.

Microsoft).

5.2. All parts of the work must be fully documented and all object calls and programming must

be set out in such a manner that a developer could quickly take over the build of the site.

Full documentation and access to all codes (excluding that which is described in 5.3)

forming part of The Work must be handed over at the end of the project by XXX to the

client.

5.3. XXX retains ownership and copyright to the source code for any compiled binary

executables and/or modules including but not limited to .dll and .exe files developed during

the course of a project. Such source code will be made available without restriction to the

client for the purpose of use only in respect of the Client’s site. XXX can and will enter into

source code transfer agreements where required, subject to contract and cost

amendments.

5.4. If software owned by any third party, other than the Client or XXX is incorporated in the

Work, the parties will co-operate to obtain an appropriate licence from the owner of such

software. No software owned by any third party will be obtained without prior consent from

both parties.

5.5. The Client warrants that all material (including all text and images) provided by it to XXX

for inclusion or publishing in connection with the Work, or which the Client wishes XXX to

link to the Work by way of hyperlink, is material in relation to which the Client either has the

copyright or other appropriate intellectual property rights in all jurisdictions where the Work

may be accessed, or links to which will not be in breach of local law or regulation.

5.6. All intellectual property originating from the Client will remain the property of the client. No

client material shall be used by XXX either on their web site or in any promotional literature

without the express permission of the client.

6. WARRANTIES

6.1. Each party warrants to the other that it has the full corporate power and authority to

execute and deliver this Agreement and to perform the obligations required of it under this

Agreement.

6.2. XXX further represents and warrants that it will carry out and deliver the Work in a

professional and workmanlike manner. The Work (excluding any software owned by third

parties) will, to the best of the knowledge and belief of XXX, on delivery not infringe the

copyright or other intellectual property right of any person or entity arising under the laws of

the United Kingdom or any other jurisdiction, and that to XXX’s best knowledge and belief,

it contains no known “viruses”.

6.3. In the event that XXX is proved to be responsible for the original introduction of such a

virus/bug and/or having failed to apply the Client’s procedures or having failed to advise the

Client of the potential risk, XXX shall:

6.3.1 remove the virus/bug and restore the equipment and data to its pre-virus/bug state

or;

6.3.2 reimburse all costs necessarily incurred by the Client in undertaking the necessary

work entailed in performing the activities detailed in

6.4. XXX warrants that it makes reasonable efforts in accordance with the standards of the

software industry in the UK to ensure that the Work is year 2000 compliant, and that date

related functions operate for dates after the year 2000 and in conjunction with other year

2000 compliant software in a manner which is consistent with reasonably expected use of

the Work.

6.5. XXX warrants that any errors in the customising or programming of any part of the ‘Work’

will be rectified as quickly as possible at no additional cost. XXX further warrants that any

errors in deploying to the live web server will be rectified as quickly as possible at no

additional cost to the client. The entire work must be fit for the purpose the client requires it

for, as agreed to and incorporated into the signed off TERM SHEET.

6.6. XXX warrants that it will provide the client with a Disaster Recovery Disk in respect of the

software it will deploy on the live web server. The Client will receive this Disk once the

website goes live.

7. EXCLUSION OF WARRANTIES

7.1. Apart from the specific warranties, guarantees, conditions, undertakings and terms set out

herein and/or in each statement of work (e.g. TERM SHEET, Change Control) entered into

hereunder: all services and products provided in connection with this Agreement are

provided on an “as is” basis, neither XXX nor any of its affiliates, employees, officers,

directors, agents or licensors warrants that the service or products provided in connection

with this Agreement or the statements of work will be uninterrupted or error free. XXX and

its affiliates, employees, officers, directors, agents and licensors make no warranty,

guarantee, representation or condition, undertaking or term, express or implied, statutory or

otherwise, as to the condition or quality other than as set out in this agreement and/or in

each statement of work.

8. LIMITATION OF LIABILITY

8.1. Subject to Clause 8.2 below and except in relation to such liability as has been expressly

excluded the maximum aggregate liability of each party to the other whether in contract,

tort, statutory duty or otherwise (even where advised of the possibility of such loss or

damage) for any loss or damage whatever arising from or in relation to this Agreement

shall, in respect of any one or more events or series of events (whether connected or

unconnected) taking place within any twelve month period, be limited to £xxx for each and

every claim. This limit shall also apply in the event that any exclusion or other provision

contained in this Agreement is held to be invalid for any reason and a party becomes liable

for loss or damage that would otherwise have been limited.

8.2. Nothing in this Agreement shall exclude or limit:

8.2.1. Either party’s liability for death or personal injury arising from its negligence or that

of its servants, agents or employees; or

8.2.2. Any other liability which it is prohibited from excluding by law.

8.2.3. XXX shall be liable if XXX supplies defective instructions regarding the client

installing any third party software in relation to this agreement, and XXX shall

indemnify the client for all costs, expenses and damage which occur as a result.

However, XXX cannot be held liable if the instructions given are incorrect from the

third party software supplier and/or the instructions given are not adhered to by the

client.

9. TERMINATION

9.1. The Client shall have the right to terminate this agreement at any time on giving one

month’s written notice.

9.2. Without prejudice to any of its other rights, either party may immediately terminate this

Agreement by giving written notice to the other party if:

9.2.1. the other party commits any material or repeated breach of this Agreement and, if it

is capable of being remedied, fails to remedy such breach within a reasonable time

having regard to the nature of the breach within the context of either parties' internet

business (not being more than 30 days) from the date of the first notice specifying

the nature of the breach; or

9.2.2. the other party becomes or is deemed insolvent, ceases to trade or has a liquidator,

receiver, manager, administrator or administrative receiver or similar officer

appointed in respect of the whole or part of its business or enters into any

arrangement or composition with its creditors or is wound up otherwise than for the

purpose of a solvent amalgamation or reconstruction where the resulting entity

assumes all of its obligations, or is unable to pay its debts as they fall due within the

meaning of section 123 of the Insolvency Act 1986, or is made bankrupt, or

undergoes a similar or analogous event in any jurisdiction.

9.3. Notwithstanding termination of this agreement for whatever reason the client shall have the

right to continue to use, run, adapt and modify the work in perpetuity.

10. EFFECT OF TERMINATION

10.1. Upon termination of this Agreement (unless due to XXX’s default) the Client shall pay

forthwith to XXX all sums due in respect of the work carried out by XXX up to and including

the date of termination.

11. CONFIDENTIALITY

11.1. Each party will at all times keep confidential and will not copy, reproduce, publish,

disseminate or otherwise disclose, without the prior written consent of the other, any

business, systems or other confidential information of the other party (including but not

limited to any non-public information of that other party relating to its software, data,

systems, trade secrets, product plans, designs, ideas, concepts, costs, prices, finances,

marketing plans, business opportunities, research and development and other know how)

or the terms of this Agreement or use any such information other than for the purposes

contemplated by this Agreement (except that each party may disclose such information to

those of its employees, agents and permitted sub-contractors who have entered into

appropriate confidentiality agreements or to any such party as may be required by law or to

a regulating authority).

12. ASSIGNMENT

12.1. Neither party may assign, or transfer or purport to assign or transfer this Agreement or any

of its rights or obligations under it (except for the purposes of a corporate reorganisation)

without the prior written consent of the other party (such consent not to be unreasonably

withheld or delayed in the event of a corporate reorganisation of either party).

13. ENTIRE AGREEMENT

13.1. This Agreement, which consists of these General Terms and the Term Sheet, constitutes

the entire agreement between the parties concerning the Work, and replaces, supersedes,

and cancels all previous arrangements, understandings, representations or agreements

relating thereto, provided that nothing in this clause shall limit or exclude any liability for

fraud.

14. INDEMNIFICATION

14.1. XXX shall indemnify and hold harmless the Client against all loss, damage, claims,

demands, actions, costs, charges, expenses and liabilities of whatsoever nature arising out

of or in connection with any claim that the possession or use by the Client of any

information or material supplied by XXX infringes the copyright or patent of any third party

up to but not exceeding £XXX for each and every claim.

15. NOTICE

15.1. A party giving notice under this Agreement must do so in the English language directed to

the recipient’s address:

(i) in writing and hand delivered or sent by UK prepaid post or facsimile to that

address; or

(ii) by any other method of electronic communication directed to the other party’s

electronic mail address as set out above in the Term Sheet.

A notice given in accordance with this Clause 15 is taken to be received:

(i) if hand delivered, on delivery;

(ii) if sent by prepaid post, five (5) days after the date of posting;

(iii) if sent by facsimile, when the sender’s facsimile system generates a message

confirming successful transmission of the total number of pages of the notice; or

(iv) if sent by electronic mail, when the sender receives an acknowledgement from the

recipient acknowledging receipt of the notice, or within 24 hours after transmission

where the sender has sent a confirmation copy by first class post.

16. GOVERNING LAW AND ARBITRATION

16.1. The construction, validity and performance of this Agreement shall be governed by the

laws of England.

16.2. The parties have agreed that any dispute or difference arising in relation to this Agreement shall be

referred to arbitration, before a single arbitrator selected by the parties, or in the absence of

agreement appointed by the President for the time being of the Law Society in the case of disputes

or differences relating to issues of law or the Managing Director of the National Computer Centre in

the case of disputes or differences relating to technical issues. The decision of the arbitrator shall be

final.