Business contract litigation may dictate the relationship between a business and its digital marketing agency. This outlines the ownership and transfer of crucial digital assets. When these agreements are breached, particularly concerning site access and asset release upon client departure, these breaches can lead to complex and costly business contract litigation, creating significant hurdles for both the departing client and any subsequent agency.
As a business owner, your website, the website access credentials, and associated digital assets (content, designs, data) are fundamental to your online presence and operations. When a digital marketing agency, contracted to manage these elements, fails to release those assets, that failure can severely impede your ability to control your own digital footprint and transition smoothly to a new partner. Just as you would meticulously document the transfer of physical assets during a business sale or ensure clear ownership in SEC filings, clearly defined terms regarding digital asset ownership and transfer are paramount in your contracts with marketing agencies.
You need to take the time to understand your contractual rights regarding digital asset ownership and transfer — and act decisively when these rights are violated, as disputes over these assets can significantly disrupt your business and lead to protracted legal battles. Below, I outline important considerations regarding business contract litigation arising from a digital marketing agency’s failure to release site access and assets:
Understanding Ownership Clauses in Your Digital Marketing Agency Contracts
Similar to clarifying the ownership of intellectual property during a business sale or defining asset ownership in SEC-related agreements, your contract with a digital marketing agency should explicitly state who owns the website, the website access credentials, content, designs, and data created during the engagement. Ambiguous language here can be a breeding ground for disputes. Transfer of the digital assets should be stipulated in your agreement and should carry with a breach a significant penalty to the digital marketing agency.
Identifying Breach of Contract When Agencies Withhold Digital Assets
Just as failing to deliver agreed-upon goods breaches a sales contract, a digital marketing agency’s refusal to release site access and assets as per the contract terms is a clear breach. Understanding the specific clauses in your agreement regarding termination and asset transfer is important in showing this breach.
Business Contract Litigation: Considering the Damages Caused by Withheld Digital Assets
Much like assessing the financial losses resulting from a breach of a supply contract, the damages caused by a former digital marketing agency withholding site access and assets can be substantial. This can include lost revenue due to website downtime, the cost of rebuilding assets, and delays in putting new marketing strategies into practice with a new agency.
The Challenges Faced by the Departing Client and the Incoming Agency
The departing client faces immediate disruption to their online presence and the inability to directly control their website and digital marketing efforts. The incoming agency is then hampered by the lack of access, often needing to undertake time-consuming and costly efforts to gain control or recreate assets, delaying their ability to effectively serve the new client.
Navigating Business Contract Litigation to Recover Digital Assets
Similar to pursuing legal action for other breaches of commercial contracts, business contract litigation to compel a former digital marketing agency to release site access and assets involves showing the existence of a valid contract, the breach of its terms, and the damages incurred. This process can involve demanding injunctive relief to immediately gain access to the assets.
The Importance of Clear Termination Clauses in Digital Marketing Contracts
Just as clearly defined exit strategies are important in business partnerships, well-drafted termination clauses in your digital marketing agency contracts should explicitly outline the process for transferring site access and assets upon the termination of the agreement, regardless of the reason for departure.
Proactive Steps to Prevent Disputes Over Digital Assets
Similar to conducting thorough due diligence before a business sale or ensuring meticulous documentation for SEC compliance, taking proactive steps when engaging a digital marketing agency can prevent future disputes. These steps include defining ownership in the contract, establishing a process for asset transfer upon termination, and ensuring you have administrative access to all critical platforms from the outset.
Contact an Experienced Attorney Regarding Business Contract Litigation for Digital Assets
Just as resolving disputes arising from a business sale or navigating complex SEC enforcement actions requires skilled legal counsel, disputes with a former digital marketing agency over withheld digital assets necessitate the expertise of an experienced business contract litigation attorney. It’s critical to have an experienced business attorney who can best advise you regarding the legal and tax implications — and help you secure the best deal possible. Offering trusted representation and high-quality legal services to entrepreneurs and corporate owners, Brinen & Associates advises clients regarding many business matters. Call (212) 330-8151 or send us a message to learn more about how we can help you.
