Are you going to create a website? Don't forget the contract...

Law Firm SEDLAKOVA LEGAL specializes in law in technologies and has created a practical-legal part of the methodology for Audit of the site. They have a lot of useful insights about web projects, so I talked with Jiří Císek and David Šupej about law in digital projects.

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What does SEDLAKOVA LEGAL actually do?

JC: We are a law firm specializing in legal services in the field of new technologies. We have four departments and two of them are closely related to technology, software law and intellectual property. We help technology companies and startups launch, stabilize and sell their business, as well as protect their intellectual property.

At the same time, we use technology to simplify our work. We have a lot of projects with cross-border overreach. In the US, we have ongoing cooperation in relation to legal artificial intelligence, in Europe a project in the field of trust services, another on trademark monitoring. And, of course, a lot of open projects in the Czech Republic.

DS: The best thing about technology projects is that technologies are significantly faster than law. We often need to adapt new client products to the existing legal situation, which does not correspond to technological realities. That's what I love about it... I mean, sometimes it's challenging, but mostly it's really interesting. One does new things, and it is not routine.

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Let's focus on digital projects. What should I look out for as a website/software provider?

JC: The good point is that the web is actually software, and the client of the project has to think about enough things to not be disappointed in the project in the end. Let's look at it gradually. Every piece of software is linked to some infrastructure. When a company orders a website, it often does not realize that it will need to solve the maintenance and updating of the site in the long term so that it is still compatible with the operating environment and connected systems.

When operations and maintenance are not resolved in time, often the contractor will subsequently charge several times the usual price for maintenance and begin to dictate terms that are not fair. Be it long reaction times, no guarantee of removing the incident, and so on.

If the supplier had laid out such conditions on the table at the beginning, then the customer would probably have chosen another supplier. But after launching the project, the client is actually faced with two options. Either he has a completely new website, platform or software made by someone else and this time he negotiates the terms of maintenance and administration ahead of time, or he nods to the terms of the existing supplier.

This means, in principle, having a good contract and covering in that contract even those things that are not at first glance a necessary part of the work. For example, infrastructure, technical support or development costs. Often these are things you will need up to a year from now. Many people always think only to the nearest milestone, but that is not enough.

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Do I understand it correctly to mean that a poorly made agreement with a supplier can cause the entire investment to be lost?

JC: Yes, that too. As the client of the project, I want to sell and have beautiful websites, but if I underestimate the initial agreement, I can not even claim defects, because the contract does not consider them as defects.

We have experienced several times that the client of the project came and wanted to advertise something or wanted the money back, we asked if they had a contract and they said no... It's like if I told someone without a contract, “Hey, I'm going on vacation, but I want to buy a house, here you have three million and buy it for me. When I get back from vacation, you're gonna rewrite it on me. “

DS: Well... maybe this is better not to do with a contract either. But back to the sites. The chapter itself is then the content of the site. We had a client who downloaded an employment contract from the internet, employed some copywriters, and found out in 4 years that he didn't have the kind of content rights he thought he had. A lot of the rights were left to those copywriters. He found out the moment when a potential buyer of the entire company had his due diligence done and was forced to write amendments to the contracts separately with each copywriter. Fortunately, it worked out. But if copywriters knew what money was all about, perhaps the negotiation would be more complicated.

JC: Or the scope of the work is not established. We had a client who wanted a new logo and website from the agency. The agency supplied a contract that it would provide a graphic manual, a couple of other things, and at the end of the list was “etc.”. I wonder what is this “etc.” and how do we know if the work is finished?

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Have you ever experienced a situation where a website submitter got into through his own fault — by underestimating something?

JC: It happened to us, for example, that the client of the project instructed the contractor to register the domain, pay for and arrange the hosting, and create the website. And then suddenly he got into a situation where the contractor cut him off from the site and started selling his services! In addition, everything was registered to the supplier, and at the same time there was no official documentation about it. So we had to prove it on the basis of email communication, for example...

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Leaving aside the contractual documentation, is there anything else I should look at on the site?

JC: I should be careful to adequately alert the users of the site in accordance with the law of everything I have to alert them to. This depends on the form, industry and way of doing business. As a limited company, I have to have a website and I have to post general meeting invitations there. As an e-shop, I have to warn consumers about the handling of personal data, cookies, etc. Then there are very specific fields, such as online insurance services. Basically, any regulated industry has its own specific rules for website content, product advertising, etc.

Many project subscribers do not realize that even for a general site, a number of obligations by law apply. For example, if you sell anything to consumers, you must have information on the web about the possibility of out-of-court settlement of consumer disputes.

A completely separate chapter is web platforms that need to analyze the data of their users, and then they need to be sold in some form to third parties. There it is necessary to set up the business well from the point of view of personal data protection, for example, to obtain timely consents of data subjects, if they are required.

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Does it make sense to have a website audit done?

JC: In general, audits -- not just sites -- can save a lot of money going forward, although it may seem like a bigger expense today.

We know that 80% of contractors underestimated their project in the beginning, and auditing can heal at least some of this in some way. The sooner the audit is done, the better it is for the customer, because as a result it can save a lot of money.

A banal thing like screening the availability of trademarks and domains when launching a new brand can cost a bundle as a result. We have cases where a German demanded 10,000 euros for a domain, which was more money than it cost to create a new brand. If this is checked in advance, the customer would avoid high expenses for additional IP purchases or re-branding. However, as with audits, this preparation is underestimated at the beginning, because as long as the customer does not have problems, spending in the order of hundreds or thousands of euros for prevention seems high.

Thanks for the interview!

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