Italy: Web-site Agreements

Last Updated: 10 September 2001
Article by Stefano Sutti

Most "Cyberspace" issues are best dealt with legally as metaphors of the real world. Thus, whenever the (prospective) owner of a Web site chooses to entrust its development and maintenance to a third party, the relevant contract is rather similar in nature to development and maintenance contracts related to more tangible sites, such as department stores, offices, factories or industrial plants.

Actually, under Italian law, these contracts are in the same class as those pertaining to construction and are considered to be an "appalto" (locatio operis), that is a contract by which, according to Art. 1655 of the Italian Civil Code, "a party undertakes to perform a piece of work or render services, organising the necessary means and operating at his own risk, for a price".

While the distinction with regard to the direct employment of the people involved is obvious, the relationship between the owner/employer and the contractor is also very different from that between a vendor and a purchaser of a given asset, no matter how "turn-key" the developmnent contract can be.

A number of specific issues arise which must be regulated by the contract, and are in many Civil Law jurisdictions expressly resolved by law unless otherwise agreed by the parties. For example, under Italian law, a contractor is not allowed to subcontract the performance of his work unless authorised by the employer, and is expected to supply all the relevant "materials". Variations to plans must be authorised by the employer in writing, and unless they are "necessary" or "requested by the employer" no further compensation is owed by the latter if the price has been determined in a lump sum. The contractor must also comply with the variations requested by the employer whenever they do not involve considerable changes in the nature and proportion of the works to be performed.

Moreover, the employer, before taking delivery, has to be right to test and verify the completed work or its parts, and in the latter case the contractor is ordinarily entitled to payment in proportion to the work already accomplished. The tests and the subsequent acceptance do not release the contractor in full, but the employer is bound under Italian law to notify the contractor any non-conformity or defects whithin sixty days from the discovery thereof. Finally, the contractor is liable for the destruction or deterioration of the work before delivery, and the employer can withdraw from the contract even after the performance of the work or service has begun, provided that it compensates the contractor for the expenses sustained, the work already accomplished and the lost profit; on the other hand, the termination of the contract do not involve, in the event of continuous of periodic performance of services, the periods when the contract has been performed.

Most of this is directly applicable to contracts for the development and maintenance of Web sites. In particular, an important issue is whether the plans and specifications for the implementantion of the site are drafted by the employer and third parties instructed to this effect by the same, as it is often the case for more ambitious projects, or they are part of the contractor's offer, and of an "all-inclusive" price, which in turn can be more or less standardised.

At least the outline of large Web projects tend to be planned and specified by the company's relevant internal resources, such as the marketing and PR departments (for the marketing and advertising content), the IS people (especially as far as the Web site is going to present, or to rely on, information available in the company's information system), the sale department (whenever the site is the framework of an e-commerce operation), etc. With respect to high-profile projects, advertising and PR agencies are often involved, as are designers, editors, cartoonists, copywriters, graphic and video and publishing experts. As a matter of fact, while the Web used to be the province of programmers and system administrators, most companies have realised by now that the development and maintenance of a Web site is to its content and presentation nothing more than what Wordperfect or a typist are to Stephen King or Michael Crichton, or bricklayers to Le Corbusier: for sure a necessary help, in no way a guarantee of a high-quality, appropriate content, features and presentation.

The actual implementation of the Web site concerned is not banal, however, and the employer has an interest in demanding that the technical issues be negotiated and regulated within the contract or its attachments. The actual tools employed by the contractor may be irrelevant to the site owner, as they are to the Web users accessing it. On the other hand, the technologies adopted and embodied in the site itself (say, the adoption of XML versus HTML, of plain Java components versus ActiveX) are of the utmost importance in terms of compatibility with the largest possible number of browsers and platforms; not to mention in terms of flexibility, expandability and future manageability. Given that most Web site are by nature aimed at the public and are works-in-progress, a perfectly plausible and less expensive proprietary technical solution may quickly become a legacy for the company which does not care about its contractor's policies in this respect.

Many offers for smaller sites, on the other hand, which originate from ISPs, portals, Web designers and the likes, concern all the phases of the design, planning and implementation of the customer's site, often developed from a very basic prototype or even a mere Home Page progressively supplemented with additional contents and features. These offers may also include a number of further services which are not strictly connected with the development or maintenance of the site itself.

As happens when a project contractor acquires title to land, and leases it to his employer who is to become owner of the building or plants created thereon, two typical additional services to these contract are those respectively known as hosting, where the contractor keeps the site on its server; and as housing, where the contractor keeps the server in its premises, and takes care of its management, maintenance, and possible upgrades. These two services are continuous in nature, so that term and conditions must be provided for with respect to the "rent", the contract's duration, its termination, etc. Needless to say, of the uttermost importance for the customer are also the provisions related to the so-called downtime, i.e., to possible interruptions of the users' ability to access the site, for example because of a system crash or a hardware failure.

Of course, the employer's obligation to indemnify the site maintainer against any kind of third parties' claims is often provided for whenever these services are offered, as limits may be established to the contractor's obligations to keep the contents accessible whenever an order or demand is made by a third party or a public authority. The compliance with legislation concerning the treatment of personal data and the related security measures also become an issue, whenever the server with the contractor does not just publish HTML pages, but also collect data implicitly or explicitly from the site users. Moreover, if the Web site allows the users of, say, the marketing and the IS departments to upload and download programs and data, or goes to the point of offering application services to its users, IP and liability issues must also be taken into consideration.

A very preliminary, una tantum service which is also offered by many Web developers and maintainers, is the registration of the domain name(s), where the Web site will be created, most often in its simplest form "www..", such as in "". Those registration(s) involve(s) in most jurisdictions a rather simple procedure, but numerous important legal issues, as domain names often interfere with other domain names, trademarks, trade names, and private names, or may be relevant for competition purposes. Furthermore, the various naming authorities have different requirements for registrations to be accepted and keep valid, and different rules for dispute resolution. As such, those registrations are best dealt with by corporate counsel departments, lawyers or patent attorneys, and should not entrusted to Web site developers, who at best take care of filling electronic forms.

Conversely, whenever a company does not have an internal Webmaster, it is perfectly reasonable that a component of its external Web maintainer's obligations is that of promoting the exchange of hyperlinks and of registering the Web site with the relevant directories and search engines, and to include the appropriate and necessary metatags in the pages published by the site to improve the search engines ability to index them and to locate them whenever appropriate. Again, liability issues should be contractually regulated, also in the light of a very recent Italian decision which established that misleading metatags may involve liability for damages under the legislation against unfair competition.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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