Website Development Agreement (Malaysia)
WEBSITE DEVELOPMENT AGREEMENT
Contracts Act 1950 (Act 136) | Copyright Act 1987 (Act 332) | Electronic Commerce Act 2006 | PDPA 2010
THIS WEBSITE DEVELOPMENT AGREEMENT is made on [Effective Date]
BETWEEN:
(1) [Client Name] (SSM No.: [Client Number]) of [Client Address] ("Client"); AND
(2) [Developer Name] (SSM No.: [Developer Number]) of [Developer Address] ("Developer").
1. PROJECT SCOPE
1.1 The Developer shall design, develop, test, and launch the following website for the Client ("Website"): [Website Description]
1.2 Domain Name: [Domain Name]. The domain name shall be registered in the Client's name with MYNIC Berhad (for .my domains) or an ICANN-accredited registrar, and shall remain the Client's property at all times.
1.3 The Developer shall complete the Website and make it live by [Launch Date], subject to the Client's timely provision of content and approvals.
2. FEES AND PAYMENT
2.1 The Client shall pay the Developer a total fee of [Total Fee], exclusive of Service Tax at 8% under the Service Tax Act 2018 (where applicable).
2.2 An initial deposit of [Deposit Amount] is payable upon signing this Agreement.
2.3 Payment Schedule: [Payment Schedule]
3. INTELLECTUAL PROPERTY
3.1 Upon receipt of full payment, the Developer hereby assigns to the Client all intellectual property rights in and to the Website, including all source code, graphic designs, database structures, and related materials created specifically for this project, under the Copyright Act 1987 (Act 332) and any other applicable Malaysian IP laws.
3.2 The Developer retains ownership of pre-existing tools and frameworks. The Client receives a perpetual, royalty-free licence to use any incorporated third-party open-source components, subject to their respective licences.
4. WARRANTY
4.1 The Developer warrants that the Website will function in accordance with the agreed specifications for [Warranty Period] after launch. During this period, the Developer shall remedy any defects at no additional cost.
5. DATA PROTECTION
5.1 The Client, as data user, is responsible for ensuring the Website complies with the Personal Data Protection Act 2010 (PDPA 2010, Act 709), including displaying a compliant Privacy Policy for any personal data collected through the Website.
5.2 The Developer shall implement reasonable technical security measures in the Website's architecture as required by the Security Principle under Section 9 of the PDPA 2010.
6. GOVERNING LAW
6.1 This Agreement is governed by the laws of Malaysia. Disputes shall be submitted to the courts of Malaysia or, by mutual agreement, to arbitration at the Asian International Arbitration Centre (AIAC) under the Arbitration Act 2005 (Act 646).
Authorised Signatory (Client)
________________
Signature
Authorised Signatory (Developer)
________________
Signature
What Is a Website Development Agreement (Malaysia)?
A Website Development Agreement in Malaysia sets out the rights and obligations the parties agree to be bound by.
Intellectual property ownership is the pivotal issue in any Malaysian Website Development Agreement. Under the Copyright Act 1987 (Act 332), a website constitutes a work protected as a literary work (for code), an artistic work (for design elements), and potentially a computer program under Section 3. Where the website developer is an independent contractor — not an employee — copyright in all website assets, including source code, graphic designs, and content, vests in the developer by default under Section 27 of the Copyright Act 1987, unless the agreement contains a written assignment of copyright to the client. The client should require a full IP assignment clause to obtain clear legal ownership of the website upon project completion and final payment.
The Electronic Commerce Act 2006 (Act 658) governs the legal recognition of electronic contracts, electronic signatures, and online transactions in Malaysia, and is directly relevant to websites conducting e-commerce. Websites that collect personal data from Malaysian users — including names, email addresses, and payment information — must comply with the Personal Data Protection Act 2010 (PDPA 2010, Act 709). The website must display a compliant Privacy Policy addressing the seven data protection principles under the PDPA 2010.
Domain name registration in Malaysia is administered by MYNIC Berhad (formerly the Malaysian Network Information Centre) for .my domain names, and by ICANN-accredited registrars for international domains. Website development agreements should address domain name ownership (which should vest in the client, not the developer) and hosting arrangements with Malaysian or international hosting providers.
The legal framework governing the Website Development Agreement (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Website Development Agreement (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2016 (Act 777) sets the foundational requirements.
When Do You Need a Website Development Agreement (Malaysia)?
A Website Development Agreement in Malaysia is required whenever a company or individual engages a web developer or agency to build a website, web portal, or web application.
A Website Development Agreement is needed when a Malaysian business commissions a web design agency to build a new corporate website, product catalogue, or e-commerce platform. The agreement must address IP ownership, delivery timeline, and payment milestones to protect the client if the developer fails to deliver.
A Website Development Agreement is required when a startup engages a freelance developer to build a customer-facing web application, confirming that all code and design assets are assigned to the company — not retained by the individual developer — so that the startup can onboard future developers or raise investment.
A Website Development Agreement is needed when a company that has an existing website engages a developer for a major redesign or redevelopment, requiring clear delineation between existing IP (owned by the client) and newly created IP (to be assigned to the client).
A Website Development Agreement is required when an e-commerce company builds a website that will collect and process customer personal data — including addresses and payment information — triggering PDPA 2010 compliance obligations for both the developer (who may build the data collection mechanisms) and the client (who is the data user).
A Website Development Agreement is needed when a government-linked company (GLC) or statutory body procures a web portal under Malaysia's government procurement framework, requiring compliance with Treasury Circular PW 3.1 and the standard government contract terms issued by the Ministry of Finance Malaysia.
Parties in Malaysia should prepare a Website Development Agreement (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Website Development Agreement (Malaysia)
A valid Website Development Agreement in Malaysia under the Contracts Act 1950 must contain the following essential elements.
Parties: Full legal names and SSM registration numbers of the client and web developer. State whether the developer is a company (Sdn. Bhd.) or a sole proprietor registered with SSM under the Registration of Businesses Act 1956.
Project Scope and Deliverables: A detailed description of the website to be built, including the number and type of pages, features (e.g., content management system, payment gateway, user authentication), responsive design requirements, and browser/device compatibility standards. Attach a detailed wireframe or technical specification as a schedule.
Milestones and Timeline: A project schedule with defined milestones (e.g., wireframe approval, design mockup, development, user acceptance testing, launch), delivery dates for each milestone, and the client's acceptance testing process and criteria.
Payment Terms: Total project fee in Malaysian Ringgit (RM), milestone-linked payment schedule (commonly 30% upfront, 30% at design approval, 40% on launch), and Service Tax obligations at 8% under the Service Tax Act 2018.
IP Assignment: A clear and thorough assignment of all intellectual property rights — including copyright under the Copyright Act 1987, source code, database rights, graphic designs, and domain name — from the developer to the client, effective upon full payment of the contract sum. Carve-outs for pre-existing materials and third-party open-source components (with licence terms identified) must be clearly stated.
Domain and Hosting: Confirmation that the domain name must be registered in the client's name with MYNIC Berhad (for .my domains) or an ICANN-accredited registrar. Specify hosting arrangements, including the hosting provider, server location, and any ongoing hosting fees.
Post-Launch Support and Warranty: A defect warranty period (typically three to six months after launch) during which the developer will fix bugs at no additional cost, and any ongoing maintenance retainer arrangements for updates and support.
Confidentiality and PDPA: Obligations to maintain confidentiality of client data and to comply with the Personal Data Protection Act 2010 in the collection and processing of any personal data through the website.
Additional compliance elements for a Website Development Agreement (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Website Development Agreement (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/business/contracts/website-development-agreement-malaysia
"Website Development Agreement (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/business/contracts/website-development-agreement-malaysia.
@misc{formslegal-website-development-agreement-malaysia,
author = {{Forms Legal}},
title = {Website Development Agreement (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/business/contracts/website-development-agreement-malaysia}},
note = {Free legal document template. Based on Companies Act 2016 (Act 777)}
}
Frequently Asked Questions
Under the Copyright Act 1987 (Act 332) in Malaysia, the default ownership of copyright in website code and design created by an independent contractor vests in the developer, not the client who commissioned the work. This is because Section 27 of the Copyright Act 1987, which grants employers copyright in works made by employees in the course of employment, does not apply to independent contractors. A client who pays a Malaysian web developer to build a website without a written IP assignment clause may have a contractual right to use the website but does not own the underlying copyright in the source code. To obtain full legal ownership, the Website Development Agreement must contain a clear written assignment of all intellectual property rights from the developer to the client, effective upon final payment of the contract sum. Without such an assignment, the developer retains the right to use the code for other clients, modify it, or potentially claim infringement if the client makes unauthorised copies.
A website that collects personal data from Malaysian users — including names, email addresses, contact numbers, or payment information — must comply with the Personal Data Protection Act 2010 (PDPA 2010, Act 709). The website operator (client) is the data user under PDPA 2010 and must comply with the seven data protection principles under Section 5: the General Principle (processing only for specified purposes with consent), Notice and Choice Principle (providing notice of data collection and processing), Disclosure Principle (not disclosing data without consent), Security Principle (implementing appropriate security measures), Retention Principle (not keeping data longer than necessary), Data Integrity Principle (ensuring data accuracy), and Access Principle (allowing data subjects to access and correct their data). The website must display a Privacy Policy compliant with PDPA 2010 and, for e-commerce sites, include a consent mechanism. Non-compliance can result in fines up to RM 500,000 or imprisonment under Section 130 of the PDPA 2010.
Domain names under the .my country code top-level domain (ccTLD) are registered through MYNIC Berhad, which is the official registry for .my domain names in Malaysia, operating under the supervision of the Malaysian Communications and Multimedia Commission (MCMC). MYNIC administers sub-domains including .com.my (commercial entities), .net.my (network service providers), .org.my (non-profit organisations), .gov.my (government agencies), .edu.my (educational institutions), and .mil.my (military). Registration of a .my domain requires the registrant to be a Malaysian entity or citizen, and MYNIC verifies eligibility against SSM registration records (for companies) or NRIC records (for individuals). Domain registration is conducted through MYNIC-accredited registrars. In a Website Development Agreement, the domain should be registered in the client's name — not the developer's name — to ensure the client retains control of the domain and can transfer hosting without the developer's cooperation.
If a web developer in Malaysia fails to deliver a website by the agreed deadline, the client has remedies under the Contracts Act 1950 (Act 136) and the Website Development Agreement. Where the contract contains a liquidated damages clause specifying a pre-agreed sum payable for late delivery, Section 75 of the Contracts Act 1950 permits the innocent party to recover a reasonable compensation — Malaysian courts assess whether the stipulated sum is a genuine pre-estimate of loss or an unenforceable penalty. If there is no liquidated damages clause, the client may claim unliquidated damages for actual loss suffered as a result of the delay, including wasted marketing costs, lost revenue, and the cost of engaging a replacement developer. If the delay is so serious as to go to the root of the contract, the client may treat the developer's failure as a repudiatory breach under Section 40 of the Contracts Act 1950 and terminate the agreement, claiming a refund of advance payments already made.
Website development services in Malaysia are subject to Service Tax under the Service Tax Act 2018 at a rate of 8% (increased from 6% effective 1 March 2024), where the web developer is a registered taxable service provider with annual taxable turnover exceeding RM 500,000. The developer must register for Service Tax with the Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia, JKDM) and charge Service Tax on invoices issued for taxable services. Clients may check a developer's Service Tax registration status through the MySST portal administered by the Royal Malaysian Customs Department. For clients who are themselves SST-registered businesses, the Service Tax paid on website development services is generally not recoverable as an input tax credit (unlike VAT systems). The Website Development Agreement should specify whether the agreed fee is inclusive or exclusive of Service Tax to avoid disputes.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Software Development Agreement (Malaysia)
A Software Development Agreement for Malaysia that governs the engagement of a developer or software house to build custom software for a client. Addresses IP ownership, delivery milestones, payment, warranties, and liability under the Contracts Act 1950, Copyright Act 1987, and Digital Economy framework.
IT Services Agreement (Malaysia)
An IT Services Agreement for Malaysia that governs the ongoing provision of information technology services — including managed IT, helpdesk, infrastructure management, and support — between an IT service provider and a client. Compliant with the Contracts Act 1950, Computer Crimes Act 1997, and PDPA 2010.
Privacy Policy (Malaysia)
A Privacy Policy for Malaysia that discloses how a website or business collects, uses, stores, and discloses personal data in compliance with the Personal Data Protection Act 2010 (PDPA 2010, Act 709) and its seven data protection principles. Required for all Malaysian websites and apps that collect personal data.