Business Law: Playing Ostrich is for the Birds:
Face Those Contract Problems Right Away!

By Nina L. Kaufman, Esq

When I first started my business, getting my website up and running was more than just a "cross this milestone off my list" experience for me. It's also a celebration of ending over a year of playing "ostrich".  I had run into roadblocks in getting the original site up and running, and I responded - how? By sticking my head in the sand. I learned a lot from turning that millstone into a milestone!

Getting Mired in the Muck

This is how my website development process started. I got several proposals, asked for recommendations, viewed other sites these designers had created, and considered the price. I chose a company that specialized in the self-publishing world, which I interpreted as a sign that they understood my needs and my market. Famous authors used this company! I thought I was in good hands.

Four months later, the sole owner became gravely ill and sold the company. The contract was assigned to one of their designers (now, working freelance). Over the next six months, he provided a litany of excuses as to why my relatively simple site was still unfinished. First, his back went out; then his mother died; then there was a problem with the family pet . . . the list went on and on. I wanted to be sympathetic, but after a while, I just didn't care. I fell down on the job, too: I had so many other things going on, that I didn't "bird-dog" him as much as I should have to finish the site. If it's the squeaky wheel that gets oiled, I sounded more like an occasional "creak."

One year and one incomplete site later, I woke from my inertia. I tore off my "client" hat and put on my "lawyer" hat, making the obligatory "you're in breach of this contract" noises to get the job done. Yet, bringing a lawsuit (or defending one from him for non-payment) was NOT going to be cost-effective. When launched, the site was all but useless. Search engines couldn't read its programming language; the shopping cart and e-zine signup required extra levels of unanticipated time and administration; and I found the design and text of the site just plain boring (even though, yes, I had originally approved of them). Making ongoing changes to the site would have required sophisticated (and more expensive) programmers.

So I scrapped the site and started all over again, pretty much from scratch.

What I Would - And Did - Do Differently

Being creatures of creativity, websites are enormously susceptible to getting out of hand. In many ways, they're like a child who has a penchant for splattering spaghetti sauce all over the kitchen if left unsupervised. Whether it's the complexity of the project, the budget, or the time needed to complete it - website agreements and their relationships should be thought through and managed with a watchful eye.

1. Set your financial parameters in writing.
Thankfully, I had written contracts both times, and I knew that the price would remain within an acceptable financial range. But I recently heard of a hair salon owner in Texas who got slapped with a $20,000 bill for her website - and for what? All she wanted was a brochure-type site with a modest shopping cart feature ($799/year through companies like Professional CartSolutions). She didn't need the latest bells and whistles; the site didn't have any sophisticated programming features, such as encrypted sections of the site so that people could discuss thelatest secrets in haircutting techniques online. Nevertheless, she got dragged into meeting after meeting with the designer, all of which showed up on the bill. The salon owner wasn't clear about her budget with the designer; nor did she hold the designer's feet to the fire about staying within a certain range. The result: A whopper (of a bill), with a cheesy site, to boot. Have a budget!!>

2. Make your expectations clear.
Give considerable thought to what YOU want to get from the site. What do you want the site to achieve for you? What's the best way to get it noticed? Do you want your site to be a brochure? To interact with your prospects? To facilitate purchases? Do you intend to create and host your own databases from the information gleaned from the site - or will you outsource this to third-party services, such as Constant Contact (for e-zines) or KickStarCart (for shopping carts), etc. All of this will clue in your designer to just how sophisticated the site (and its programming language) needs to be. Give careful thought to what you truly need now - and to what can wait until you're really ready for it.

3. Know your options for updating the site.
Websites are not meant generally to be static. Ideally, you make changes over time (no matter how large or small) in order to entice your visitors to return again and again. As a result, you'll want to know from your designer what happens after the basic site is built. How much will it cost to add or alter web pages over time? Can changes be made easily (as in HTML programming), or will you be tethered to a specialty designer? This, too, should be spelled out in your agreement.

4. Ride herd on time frames.
This was an area where I fell down on the job with my original site. I had successfully negotiated a number of the legal terms, but didn't focus as carefully on the business terms. I should have (and did, the second time around) negotiated deadlines at various stages. If the designer failed to meet them (through no fault of mine in providing the information needed), I could cancel the contract, or give the designer a modest time to shape up. An easy exit from a lousy situation can save you thousands of dollars!

5. Find out about the designer's contingency plans.
When you have a contract with a design firm (whether a corporation or limited liability company), it's hard to tell from the name just how many people sit behind the "veil." Is it one person or many? And even if there is only one owner, who will actually perform the work? What happens if that person - whether employee or owner - gets sick? Who will ensure that the work can continue to go forward if here is an emergency? In my situation, the illness of the owner caused the company to go under; and then the designer to whom the contract was assigned was a sole proprietor, who had no contingency plan in place for himself. All of which kept me waiting (not having originally focused on #2) until he could eventually get around to it.

6. Whatever it costs, have more in reserve . . . just in case.
Now, don't take this as license for you (or your designer) to be extravagant. But even with the best of contracts, the unforeseen arises (as happened to me). For example, because of the change in designers (and their capabilities), the shopping cart on my first site was completely anemic - far from the robust engine that I had expected. However, no amount of moaning will bring the original company back, nor was it cost-effective for me to sue . . . so, I needed to consider other alternatives (e.g., a third-party shopping cart), which added to the overall cost of the site. Fortunately, I had budgeted for well more than the original contract price. I'm not happy about having to spend more, but neither am I frantic or threatened with insolvency because of it.

7. Always have a "Plan B".
Part of my inertia came from not having my own contingency plan. It's one thing to be able to get out of a contract easily, but quite another to have the backup to ultimately get the job done. Ask colleagues for references to people who might be able to step in on an "emergency" basis. You may even find service providers who thrive on that kind of situation!

Better to do something imperfectly than to do nothing perfectly.

I could have had my website SO much sooner (at least a year!) . . . had I not ignored the problem, hoping (foolishly) that it would resolve itself. I had focused so intently on the site being perfectly what I had contracted for, that I couldn't move on. In retrospect, I would have been far better off to more aggressively face the delays head-on, even if it meant starting from scratch . . . which is what I had to do anyway. So if my website got off to an imperfect start, at least it's now HERE, which beats not having one altogether!

© 2004-2009 The Legal Edge LLC. Nina L. Kaufman, Esq. is an award-winning business attorney, author, and speaker. Under her Ask The Business Lawyer umbrella, Nina offers easy-to-understand business law resources that protect small businesses and save them money. To learn more, and receive our FREE "LexAppeal" ezine, visit http://www.GreatBusinessLawTips.com  or contact Contact Us. This article is for your general information only. Be sure to consult with an attorney regarding your particular situation to make sure you get the specific advice you need.

Nina Kaufman, Esq. Award Winning Business Lawyer, Author & Speaker