April 5, 2012
This article is the first in a five-part series of important legal questions for small business owners and entrepreneurs. Denver Shareholder Jeffrey Kass wrote the blog for Startup Denver which was published March 2012.

A website can be a powerful tool for any business. But if you’re thinking about launching a website for your company or redesigning your current site, consider this scenario and how you might avoid costly problems and potential legal issues.

Last year, John had a great idea for a new company. He talked to his family and with some financial help from his grandmother, he launched his new dream Internet-based company. After obtaining commercial insurance and talking to suppliers, he talked to his friend Elaine, who worked for a web development company, about creating his website. Elaine was excited to take on this new project. Her company said it could develop and optimize John’s website for $40,000. John and Elaine shook hands on it, and Elaine and her co-workers developed a great website for John. However, the final bill to John was $60,000, and he could not afford to pay that amount. He also did not think it was fair to pay an extra $20,000. Elaine said that John changed the scope of the project many times, which is why the bill increased. Elaine’s company decided not to pursue John for the extra $20,000 at that time. Elaine ultimately went to work for a different web development company.