What Happens When a Freelancer Does Work for a Client Without a Contract

> a contract is only good if the dollar amount is enough to get a lawyer involved as far as filing and pursuing any legal action

I disagree, contracts are much better than an email trail for keeping both parties on the same page. Email trails are murky and take effort to navigate. Emails sometimes lack a complete context. A contract is a canonical text for your work arrangement. Starting your work with a contract is not just good practice to CYA so you get paid, it's a good way to start conversations with your client to make sure you both get what you're looking for and don't want to kill each other (or if you do want to kill the other person you at least have to blame yourself first for agreeing to such foolish terms).

> "First, to state the obvious which anyone who has been around for some time will tell you a contract is only good if the dollar amount is enough to get a lawyer involved as far as filing and pursuing any legal action. Otherwise good luck with trying to convert a contract into actual dollars because you are right."

I've been around for some time and I absolutely would not say this. A contract is not primarily about being adversarial. It's about being clear. There's a huge difference. A contract is the end-point of the conversation you have that clarifies as much as you can before anyone starts work or writes a check.

If someone is planning on making your life hell, a contract won't stop them. It's a piece of paper, after all, and, yes, if lawyers have to get involved then pretty much everyone has lost. Preventing that scenario is less about getting a contract and more about learning to assess people and decide who is legitimate and who is full of shit so you can walk away before any contract ever gets written.

(Negotiating a contract, by the way, is a pretty good measure of what it's going to be like to work with someone. Consider it your first project together. If it goes poorly, that might be a bad sign about how the whole project will go...)

A few points. I'm not stating you are wrong but simply would like anyone reading to see that in business, the way I see it, it's art and not science. "Don't do it" sounds more like science to me. Business to me is art.

1) The dollar amount of the dealings greatly matters as well as the product or service being sold (and who it is being sold to and past history [1]). Matasano is a "real" grown up company. I would imagine the dollar amounts of the charges for what you do are not trivial or small in any way. "not freelance". And what you do has liability consequences as well if you screw up. And you have deep pockets to go after and a liability policy with pockets. [2] A contract of course is called for. Our accounting firm (been dealing with for many years) was just bought out by BDO. They sent a contract or rather a letter of understanding "whatever" that absolves them from any and all liability no matter what. This is after many many years of dealing with the firm they acquired. The legacy firm sent the same letter. Totally ignored it and never sent it back year after year. (Almost as a dare "ok we'll replace you!". They didn't take it personally at all. And if they did who cares?

2) Title of article appears to be targeted toward freelancers. Hence my comments. I'm not directing my thoughts toward Boeing (or Matasano). In other businesses I've dealt with freelancers (non computer, graphics basically) for many years. They do work you pay them. They give a quotation for the work and tell you if you exceed any limits and that it will cost more.

3) Using contracts puts friction in the process and gives people (on certain things, once again, smaller things) a chance to back out and think and delay. So to me there is a certain balance of risk that a freelancer takes (relative to the situation) vs. losing the sale that has to be weighed. Each situation is different. What's the up vs. the downside?

4) Unprofessional is relative to who you are and what you are selling of course. There are many business relationships that are done on a handshake in certain industries. I've been involved in many of them.

5) If you do (for whatever reason) use a contract and the other side doesn't want to sign it I agree that can be a red flag. In general. Once again, depending on the dollar amount. I had a domain broker come to me with a buyer for a domain name that I owned and they sent me a 10 page contract. I said "I'm not reading and reviewing that if you have a buyer I will pay you commission". They said "ok sounds good". And the deal was done and I have the money in the bank. Otoh I sold a domain to a very well known attorney (someone I knew that is well known in the business and everyone loves and even went to the same college) and I waited like 3 months to get the money. Go know.

I will end with a funny story. When I sold my first company a long time ago I asked both the accountant and the lawyer for an estimate of the legal and accounting charges. They both shot me numbers verbally over the phone. After the deal was done I got the bill and it was 2 to 3 times as high as the quote. So I said "you quoted $x what's the story?". They said "oh it was more work". I said "well you should have told me that, how would I know?". The accountant stayed with the quote and is the firm I've referenced above that I am still with to this day. The lawyer thanked me (he had just gone out on his own and left a big firm and had no clue about smaller clients or billing or people using their own money) and told me I had taught him a valuable lesson [3]. He then bought some computer gear from me (to give you an idea of how long ago this was it was a $4500 laser printer). Just to show you that he really was cool with it.

So it wasn't lack of a contract as much as lack of communication possibly that sunk them. And of course had they billed as the work was going on as opposed to all at the end they would have put me on notice despite the original quote (which by the way was stated like a firm quote..)

[1] Which of course is tricky because people and companies change their spots.

[2] As opposed to Dave, out of his house, living from hand to mouth. Nobody is taking "Dave" to court if he screws up.

[3] So in other words he wasn't used to anything but a larger company using someone else's money not an entrepreneur spending his own money.

Here's an excerpt (condensed):

“Work Product” shall mean all design and applications... excluding the “Elements”. Developer assigns to Client all right, title and interest in and to the Work Product. “Elements” shall mean Developer’s algorithms, libraries, scripts, user interface and experience designs, architecture, objects, graphic files, [etc.]. The Elements shall remain the sole and exclusive property of Developer; provided that, subject to/upon full and final payment for the Services, Developer grants to Client a royalty-free, nonexclusive, irrevocable, perpetual, worldwide, subliceseable license in and to the Elements to use in connection with the Application.

So we do give up copyright for the application as a whole "Work Product", but retain the copyright for individual components "Elements".

The client is not in a technical space, and quite frankly doesn't know much about software development. We may be pulling a fast one here that other clients would refuse. In any case, it hasn't caused any problems in our working relationship and everyone's happy.

Once again, this all depends on the parties and the size of the deal and any past dealings.

I'm not against getting things or putting things in writing. Or having a contract when needed.

My comments relate to the form of that writing and the effort and potential friction vs. what you are trying to protect. Friction which can kill a deal if you have to think out every possibility. Not to mention that it can also work against you.