Net legal ‘no badland'

Central to any service provider business, negotiating effective contracts and ensuring legal compliance will be among the topics at the upcoming B2B e-commerce conference in Sydney.

The sessions will cover a range of legal and contractual issues pertinent to service providers of all types, including application service providers (ASPs), Web hosting companies and Web developers.

All contracts need to comply with State and Federal law, but that's no easy task according to Peter Knight, a partner at law firm Clayton Utz. Knight is presenting the session on "incorporating legislative change into e-commerce contracts to protect stakeholder interests".

Knight said the last two years have seen an enormous amount of "unnecessary" legislative change, as several Government ministers and departments rush to update existing legislation to deal with the Internet and e-commerce.

"The Internet was not previously some ‘badland' of the law. That's absolute nonsense, and people who say that either have no understanding of the Internet or no understanding of the law," Knight explained. "Politicians are trying to grab the high ground and legislate for the Internet and e-commerce because it's sexy, and in the process they've created an absolute mess. It's been a complete cock-up, where you have a situation with three different Government departments trying to legislate for e-commerce at the same time. Everybody is in the scrum to take their place in history. I query whether any of it's been successful, and in the main I don't think it has been."

Knight said the Department of Finance, Attorney-General's and the Department of Communications were each duplicating and contradicting legislation put in place by the other two.

John Rundell, Director of Outsourcing Practice at consultancy firm KPMG, will be presenting the session on "outsourcing Web hosting and negotiating a service level agreement which delivers a win-win outcome". According to Rundell, the dynamic nature of Web sites means that it can be hard to predict what the future requirements will be.

"Web sites are not static, so it's sometimes hard to know what's involved," Rundell said. "[A customer] needs a strategic relationship with a service provider to get the flexibility it needs. The foundation for that is that a good contract that shares the risk and benefits, a good cultural fit, and a clearly defined service level agreement."

John Brand, Senior Research Analyst, Electronic Business Strategies, at analyst company META Group, who will be presenting the session on "establishing Web development projects which meet the commercial objectives of all parties", echoes Rundell's sentiment that a win-win contract should be about conditioning behaviour rather than triggering penalties.

"The key point is that a contract is in place to make something work, not as a fall-back position," Brand said. "Too many people focus on the ifs and buts of what happens if something goes wrong. The contract has to be workable and effective to all parties. If it's not, there's a good chance it will be needed. If it is fair and equitable, there's a good chance you will never have to go back to it."

Brand added that a contract should not try to be too specific: "A lot of people take the contract as a schedule of work, but it's really an overall binding thing to talk about intent. If you get bogged down in the specifics, you're just burning money."

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