“There are certain things we need to get down way before we get to the point of drafting agreements or changing agreements.” This is how I ended my video, Prerequisites for Technology & IP Contracts.
Imagine you run a company named Offline Pty Ltd. Its revenue is declining. It wants to spend its savings to launch a parallel business to be named Webco Pty Ltd.
This web business case study illustrates the required preparatory work for taking a business online.
Assume Online Pty Ltd is willing to spend say $20,000 to get a smart website with many trimmings.
Assume you have found a website developer ready to develop the proposed new online services and e-commerce website venture to be known as Webco at www.webco.com.au.
Before technical website development begins, your company colleagues will be clapping if you and the developer have reviewed the website’s proposed:
- Business plan
- Content management system
- Information architecture
- Design, template or theme
- Hosting arrangements
- Email services.
Development work might then be staged, with initial work by a concept and content developer and subsequent work by a technical development team. This can save a stack of money by avoiding dead ends.
Working in this measured and planned way, in time business fine details can be settled. Like most people your company will be excited to find out the financial basis for its future online service via Webco. There are many possibilities. Its monetisation method may be part of its competitive strategy. It may be charging a member fee, advertising or sponsorship fee, transaction-based fee, a quote, an estimate, stage by stage work fee, a combination of these, or other financial basis.
Working out the financial basis is usually the last step in drafting work. Many things need to be known before money decisions are made.
All this is preparatory work. A multidisciplinary or experienced lawyer can help at each stage. But only after such preparatory work should anyone consider settling the format and wording for drafting of the contract to roll out the online service to users.
The preparatory work settles strategy, design, commercial, budget and technical documentation. They provide clues for realistic legal requirements and costing contract drafting and legal advisory work. In the right project, as lawyers and consultants we guide clients and developers involved in taking businesses online.
Without the pre-legal preparatory work the contract drafting job can abort. I know, I’ve been burned when allowing clients to push me into drafting work or contract changing work without preparatory work in place.
With the preparatory work in place or in train, Offline Pty Ltd will be ready to confidently become Webco. For its online services the usual armoury and mechanisms of legal provisions are available, with clauses to cover:
- Financial basis
- Payment schedule
- Copyright licences and prohibitions
- Risk allocation (eg warranties, liability exclusion, insurance)
- Termination and its consequences
- Force majeure and general clauses.
Call us if your Offline or Webco has needs or you seek more information.
Contact us with any questions or requests.
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