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Website hosting agreement: How-to guide

In today's fast-paced business world, polished and professional websites can be critical marketing tools for companies seeking a competitive advantage.

However, a company's website is only as good as its hosting server. A company with inadequate server space and bandwidth to support its site may lose thousands of dollars of sales due to website downtime and inoperability.

To minimize this risk and make its website more reliable, a company may hire an expert to publish (or host) its website online. Hiring a web host allows a company to rent appropriate server space and necessary bandwidth cost-effectively while maintaining control over the site's content. However, companies hiring web hosts need a well-drafted website hosting agreement.

The website hosting agreement template provided on this page can be a good starting point for drafting an agreement to cover the hosting of a website for a company. It can help safeguard the parties' rights during the agreement's term. You may revise or restructure specific provisions to fit your organizational goals.

What are the key factors to consider in a website hosting agreement?

Free website hosting agreement template by LegalZoom. Create and download agreements for free!

Considerations for increased attention and services

When a company adds or modifies website content, especially graphic, audio, or video content, the costs and technical requirements of website hosting may go up significantly. It's important to specify any additional fees that the hosting provider may charge if the website demands more attention and services unless the agreement doesn't limit the levels or hours of service.

Reading the agreement carefully

Many website hosts have agreement forms that they would use to govern an agreement about website hosting. If you are the company, make sure the agreement addresses technical and performance issues like:

  • Internet connectivity
  • Hardware and software (that will be used)
  • Website availability/downtime because of server updates/maintenance
  • Outages
  • Back-ups
  • Security safeguards
  • Confidentiality of website data
  • Assistance transferring the website to another host

If a host is insistent on using their agreements and you are committed to using their services, read the agreement carefully to ensure you know your long-term rights are protected.

Deciding on the goals

Understand your goals. Ensure that it has the following apart from any other agreed-on terms:

  • A description of the specific services
  • The amount to be paid
  • The terms of payment

Clarify the terms and conditions of your agreement before memorializing them in writing.

Discussing the requirements of the hosting services provided

Discuss the requirements for hosting the website, like

  • Whether the host has the obligation to use and update current technology.
  • The amount of storage space, bandwidth, and the number of email accounts the host will provide.
  • The number of users able to access the website at the same time.
  • Security safeguards, particularly if the website is used for e-commerce.
  • The company's ability to transfer files and modify its website.
  • The host's obligation to create log files and traffic reports.

Reviewing the document

Allow each party to review the agreement. Each party should get sufficient time to understand the terms or how those might affect the agreement.

Review the completed agreement to ensure that all relevant points have been included. To avoid misunderstandings, it is essential to state all expectations and terms explicitly in the document.

Review your state's applicable laws for independent contractors.

Maintaining the status

A written agreement is the first step in establishing an individual's independent contractor status. Once signed, both parties must follow its terms to maintain status.

Ensuring Legal Compliance

If you're building a website, it must comply with all relevant laws and regulations. It is particularly vital if your website contains potentially sensitive content, such as indecent or defamatory materials, or if it caters to a younger audience since, nowadays, internet users belong to every age group. By diligently reviewing the relevant laws and regulations, you can ensure your website's compliance, safety, and appropriateness for your users.

Signing the agreement

Once the agreement is drafted, the parties must sign two copies, one for each partner.

Engaging a witness or notary (if required)

Depending on the nature of its terms, decide to have your agreement witnessed or notarized. This can limit later challenges to the validity of a party's signature.

Contacting an attorney

If your agreement involves significant risks and complex terms, contact an attorney to help draft a document that meets your requirements.

Understanding the clauses of the website hosting agreement

An image displaying all the factors needed to host a website above a keyboard.

The provisions below will guide you through the terms of the web hosting agreement, section by section, to help you understand the process better.

Introduction

In this section, mention the relevant details of the involved parties and, if applicable, what type of organization(s) they are (e.g., individual, corporation, partnership). The hiring party (who hires the website host) shall be addressed as the "company," and the provider of hosting services is called the "host."

Recitals

Briefly describe the company's business here. Additionally, you must provide the date the hosting agreement will become effective (often when signed).

Purpose

Here, you explain why the parties are entering the agreement. This section confirms the parties' agreement that the company's website will be hosted on the web by the host.

Compensation

This section explains the promise that the company will pay for the services performed by the host, including the website hosting.

Term

Indicates that the agreement will last several calendar month(s) or indefinitely until the parties agree to terminate it. Companies that want the flexibility to switch hosts or move hosting services in-house soon may prefer a month-to-month term.

Termination

This section outlines the specific circumstances that would result in the termination of the agreement before the services have been completed as required under the agreement. Circumstances like:

  • The parties can terminate the agreement with a written notice. The parties can terminate the hosting agreement if the other party breaches an obligation and does not fix this breach. In both cases, the party seeking to terminate the agreement must give prompt written notice. Mention the notice period a party must provide for an earlier termination or to notify the other party of a breach.
  • The company can end the agreement without notice if the host is convicted of a crime.
  • If the host doesn’t maintain a certain level of service, the company can terminate the agreement immediately in writing.

After termination, the company must pay for the services provided or completed by the host, and the host must return the company's intellectual property. Mention the amount of time that the host has to return those items.

Responsibilities

This section lists each party's responsibilities under the Agreement. The host agrees to provide hosting services for the company's website. Use this space to add additional obligations like, “if the company must change or update its operating systems, software, or hardware to support its website hosting, the provider will do so.”

Confidential information

This section defines confidential information for purposes of the agreement. It explains how the host will treat that information, like:

  • The host can use the information only for purposes intended by the agreement (e.g., if the information was disclosed to help the host complete its services, it can be used only for that purpose) and not for any unauthorized use.
  • The host can discuss the information only with specific individuals in the company.

Representations and warranties

This section mentions the parties' promises under the agreement, which means that the parties agree to enter the deal based on the conditions listed in this section. Primarily, these terms relate to each party having the legal right and ability to complete their obligations.

Hosting service levels

This section explains the scheduled maintenance and allows the company to terminate the agreement if the website is consistently unavailable because of the host’s activities or other interruptions. Mention the number of times the website must be interrupted before the company can terminate the agreement (e.g., if the website is down at least six times for 20-minute periods in 30 days).

Nature of the relationship

This section explains the relationship of the host with the company. The relationship clause is a critical distinction for legal reasons, including stringent requirements for health insurance coverage, liability, and taxes. The agreement clarifies the importance of maintaining a clear distinction between independent contractors and employees. It's a good idea to review the laws in your state regarding independent contractors.

No conflict of interest

This section elaborates on the additional actions taken by the host. The host and their team ensure that they are not involved in any work with another company or product currently competing with the company.

However, this section does not entirely prohibit the host from engaging in other business activities. The host can perform tasks for other companies if they do not harm the trade secrets of the company or its interests by sharing such information.

Indemnification

This section outlines each party's responsibilities in case of issues arising in the future and protects them from any adverse consequences arising from the other party's negligence or intentional misconduct.

You can also add an optional clause that requires the host to buy an insurance policy to cover any costs if a lawsuit is brought.

Intellectual property

This section mentions each party's promise that their property and work don't infringe on any third party's intellectual property rights. It also states that the host doesn’t obtain any ownership rights in the company's intellectual property by entering into the agreement. This section provides that the host may not continue to use the company's trademarks after the agreement terminates.

Laws affecting electronic commerce

This optional section explains that the company will be solely responsible for any commercial taxes levied against the website. However, this is not applicable if the company doesn't sell any products on the website or has a different agreement with the provider.

Amendments

This section states that any changes to the agreement are only effective if such changes are made in writing.

Assignment

This section states that if either party wants to assign its obligations and interests under the agreement, it must first obtain the other party’s written permission.

Successors and assigns

This section states that the parties' rights and obligations will be passed on to heirs or, in the case of companies, successor organizations, or organizations to which rights and obligations under this agreement have been permissibly assigned.

Force majeure

This section releases a party from its obligations if its performance is made impossible by an event beyond its control despite its best efforts (e.g., fire, flood, earthquake, strikes, war, and more). This release is effective only if circumstances prevent that party from completing its tasks.

However, if a force majeure event happens and a party can’t do what it’s supposed to under the agreement, it must give written notice to the other party immediately, as well as a written notice when the problem is resolved, and they can work to meet their obligations as soon as possible.

No implied waiver

This explains that if either party allows the other to ignore or break an obligation under the agreement, it doesn’t mean that the party waives any future rights to require the other to fulfill those (or any other) obligations.

For example, if the agreement demands the host to work 40 hours a week, but the company only needs the host to work 30 hours a week. Later, the company could tell the host to work 40 hours a week, as required in the agreement. If the host claims that this right was “waived” because the company didn’t enforce it before, the company can reference this section: choosing not to enforce a rule at one time doesn’t stop it from being enforced in the future.

Notice

This section mentions the addresses to which all official or legal correspondence should be delivered. Write the mailing address for both the company and the host.

Governing law

This section allows the parties to choose the governing laws of the state to interpret the document. Since the host may work in one state and the company in another, the applicable law could be different, though it may not be a venue provision.

Counterparts; electronic signatures

This clause states that regardless of where the parties sign the agreement or how they transmit signatures (via electronic devices such as computers or fax machines), all the separate pieces will be considered part of the same agreement. This provision is beneficial today, where signing parties are often located in different cities and can't be physically present in the same room. It ensures that business can be conducted efficiently without compromising the validity of the agreement.

Severability

This protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law is passed prohibiting choice-of-law clauses, it will not undo the entire document. Only the section of the agreement regarding choice of law would be nullified, while the rest remains enforceable.

Entire agreement

This section confirms the parties' agreement that the document they're signing is "the agreement" about the issues involved.

Headings

This section explains that the headings at the beginning of each section are meant to organize the document. Any interpretation of the clauses should not be based on the headings.

If you’re looking for a sample agreement template to draft your website hosting agreement, use the professionally drafted and formatted template given at the beginning of this page.

Frequently asked questions

What's a website hosting agreement?

One can design the most gorgeous, functional website in the world, but if the server can support it, it's doing your business better. Hiring a professional to publish the website puts server-related stress in expert hands. A website hosting agreement protects the client and host and makes expectations clear from the beginning.

Why do organizations need a web hosting agreement?

The company and the host need an agreement to protect them from web hosting liabilities. This agreement clearly outlines each party's responsibilities, including the host's duty to provide server space and bandwidth and the company's duty to maintain the site's content. It also sets service expectations, ensuring a smooth and efficient hosting process.

Why is a web hosting agreement beneficial?

A detailed agreement can ensure a positive and smooth process with clear expectations from the beginning. With such an agreement, companies may avoid potential frustrations or misunderstandings, such as unexpected downtime, loss of data, or disputes over service quality.

What information is needed to complete a website hosting agreement?

Here's the information needed to complete a website hosting agreement:

  • Who the host is: Have their name and contact information ready
  • Who the client is: Have their information ready
  • What's expected of everyone: Know everyone's specific responsibilities
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