This article originally appeared at The WHIR
Crafting the right contract for your hosting business can seem like a daunting and pricey task, but it doesn’t have to be.
In a presentation on Monday at HostingCon Global, attorney David Snead walked through what it takes to write a contract that is easy for your customers to understand. The room represented both sides of the spectrum of hosting companies, some attendees from small 5-10 person companies and others working for companies with more than 150 employees.
The session, Stealing from Rackspace is OK, is certainly more applicable to smaller hosting businesses that don’t have the resources to have full-time legal counsel.
Snead said that he often sees customers coming to him with contracts that he calls the “Rackspace Contract.” In other words, provisions in their contract have been borrowed from Rackspace’s contract, which isn’t actually a bad thing.
Rackspace looks at its contract as a public service, realizing that a lot of web hosts out there don’t have a lot of money to hire legal counsel to write them a contract from scratch, Snead said.
Looking at Rackspace’s contract could help you determine the best language to use around provisions like raising prices when utility costs go up, for instance. But stealing contracts wholesale doesn’t work because your business is unique to you and you will have concerns are different from other clients. The worst thing you can do, Snead said, is borrow a paragraph from Rackspace, one from 1&1, GoDaddy and so on.
“What keeps you up at night about your business?” Snead asked. It’s important to consider this so you know what your contract needs to cover.
Along with guarding against your concerns, your contract also needs to meet brand needs. Don’t say you’re a customer friendly if you have an inflexible no refund policy, for example.
If you’re going to use a service like Rocket Lawyer or Legal Zoom, use it to help you understand what issues are important to your business, Snead said. These services can help you decide what provisions you might need legal help with.
Top 5 Contract Goals
- Exceeding customer expectations
- Supporting your brand
- Protecting your revenue
- Meeting contract obligations
- Litigation prevention