A written agreement defining the work to be performed and the amount and terms of compensation should govern the website development relationship. Where contractor and client are familiar with each other, doing business on a handshake may be convenient and appealing; however, the flexible and ever-changing nature of software development make undertaking any significant website project without a written agreement an extremely risky proposition. This written agreement might range from a simple, single-page letter of agreement to a full-blown software development contract. The specifics of the agreement depend on the situation and parties involved.

Without such an agreement, both parties put themselves at significant risk, proportional to the amount of time and effort that will be invested. A developer working without a contract is like a tightrope walker working without a net. When expected payments are delayed by bureaucratic tardiness or withheld on minor pretenses, the developer is left without legal recourse. A client who asks for work to be performed without a contract risks not only investing significant time and energy without a guarantee of product delivery but also litigation if disagreement arises.

For projects of smaller scope and shorter duration, usually done as a simple work-for-hire at an hourly rate, a basic letter of agreement often suffices. Such a letter generally includes a description of the work to be performed, intended delivery dates, hourly rate/compensation, and so on. This can even be a single-page document signed by both parties.

For larger jobs, a software development contract may...