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

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

#51

Post by phamilton »

delinka wrote: post #14
phamilton wrote: post #6

Recently, I've been using contracts that do not transfer copyright. We grant them unlimited license to our copyrighted content. We also signed an NDA, preventing us from relicensing the codebase to a competitor. We haven't done anything to take advantage of keeping the copyright yet, but I like keeping the rights for ourselves. I imagine of anything it would make it easy for is to open source code that doesn't tie in…

An NDA or a non-compete? These are different beasts.

It's an NDA, and I guess technically we could contract a competitor and reuse some of the code, but the NDA requires us not to release "secret sauce" essentially, meaning that a good chunk of the application could not be reused.

While it sounds confusing, my understanding is that it basically means that we have the right to reuse whatever module or library we create however and wherever we want.

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

#52

Post by phamilton »

matho wrote: post #43
phamilton wrote: post #6

Recently, I've been using contracts that do not transfer copyright. We grant them unlimited license to our copyrighted content. We also signed an NDA, preventing us from relicensing the codebase to a competitor. We haven't done anything to take advantage of keeping the copyright yet, but I like keeping the rights for ourselves. I imagine of anything it would make it easy for is to open source code that doesn't tie in…

You might fairly consider this an insignificant anecdote, but: I have rejected people for contract work because they insisted on retaining copyright, sometimes on this basis alone .

This is a new thing for me. It's a client that is not in a technical space and doesn't have much experience in software development.

If they had rejected that clause, I probably wouldn't have put up much of a fight. I figure that if they don't want it, we should keep it.

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

#53

Post by Silhouette »

fat0wl wrote: post #37
napoleond wrote: post #32

Earlier quoted context omitted.

I probably have accounts/services in their name that they can't alter/operate without my help, so they're really just shooting themselves in the foot & will likely come to realize this rather quickly. Just as a counterpoint to this, it's possible for a client to not pay you for services rendered and sue you for not maintaining previous accounts/services for them, and the courts might very well take their side, depend…

Yeah it's not like I'd use a threat like "I'll disconnect all your accounts!" but if they have some EC2 instance they don't understand how to operate it does give you some leverage since they will be needing some admin done at some point in the near future. I really doubt they can sue you for refusing to perform maintenance on their systems since we as programmers do not become indentured servants simply from having…

I really doubt they can sue you for refusing to perform maintenance on their systems

Of course they can. In most first world jurisdictions, anyone is free to bring a lawsuit against anyone else over anything, and then it's up to the court to decide on the merits of the case. If the court finds that the case was without merit, they might be able to compensate the successful party in some way depending on your particular legal system, but that would probably happen later.

What's more, if you created a system for someone, that system requires maintenance, your original contract did not specify who was responsible for that maintenance, and your clients sue claiming that they already paid for you to do that work and you're refusing to do it, you could well find yourself on the wrong end of a judgement.

In short, you seem to have quite a few misunderstandings about the basics of how contract law works, unless your local jurisdiction is a lot different to most. This is exactly why you should have everything clearly specified in a written contract, and it's also why paying an "expensive" lawyer to give you proper advice in your particular situation is almost certainly a good investment. Probably you should expect to spend significant time with a real lawyer for your first contract, so you have some idea of the general legal areas you need to consider, and then depending on how things go you might find just a quick review by someone who knows what they're doing is sufficient for a lot of later work.

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

#54

Post by phamilton »

benjamincburns wrote: post #35
phamilton wrote: post #6

Recently, I've been using contracts that do not transfer copyright. We grant them unlimited license to our copyrighted content. We also signed an NDA, preventing us from relicensing the codebase to a competitor. We haven't done anything to take advantage of keeping the copyright yet, but I like keeping the rights for ourselves. I imagine of anything it would make it easy for is to open source code that doesn't tie in…

I'd love to hear more details about this. Is this something you came up with yourself, or did you write it with an IP attorney? Would you be willing to share your template agreement somewhere? Has this been a tough sell to any of your clients? Does your agreement include language which either defines what's proprietary or specifies how to define what's proprietary and therefore subject to the NDA?

To answer your other question, I bummed a template contract off a friend. He got it from an attorney.

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

#55

Post by fat0wl »

larrys wrote: post #46
tptacek wrote: post #39

Earlier quoted context omitted.

Contracts are such a basic fact of business life, universally understood by good-faith vendors and customers, that recalcitrance about signing one should be taken as a "run don't walk" signal. By working without a contract, you doubly imperil yourself: you lose significant legal protections, and also select a client base that is particularly likely to cause you problems down the road. Matasano has many clients we've…

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 imag…

Yes this is the business world exactly as I've experienced it. Specifically, #2-4. Handshake deals are great for people who are generally sane and trying to pick up momentum. People advise you lock everything down 100% but they don't realize what a time/energy drain it is on both parties.

A quote sets up a reasonable negotiating point and then any deviation from that can be discussed. The client eats it or the worker eats it. You win some you lose some -- at least things are moving.

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

#56

Post by Silhouette »

larrys wrote: post #50
Silhouette wrote: post #45

Earlier quoted context omitted.

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. I couldn't disagree more. Usually in this field, unless we're talking about a huge deal, you've both already lost if you get as far as litigation. That implies direct costs, and it implies a breakdown of…

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…

I think the point some of us are trying to make is that if establishing a clear, written understanding at the start of a business deal creates enough friction that it's a problem for anyone, that party should probably be running away from the deal anyway. This is about as universal a truth as you can find in business. Someone might not feel that a written contract is particularly necessary, but if they are actively trying to avoid having one when it's proposed, either they don't know how the game is played or they're out to screw someone later, and you don't want anything to do with either group.

Of course the level of detail in the contract will be proportional to the size of the engagement. A small deal might only need a standard T&Cs sheet and a signature on quick statement of scope and rates. A large deal involving multiple parties and silly amounts of money might need multiple teams of lawyers and several weeks to draw up. But in each case, there is always a level of mutual understanding and it's always written down and signed off by everyone before the job starts.

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

#57

Post by larrys »

fat0wl wrote: post #47
tptacek wrote: post #41

Earlier quoted context omitted.

There are worse things that can happen to you when you work without a contract than simply not getting paid. Contracts also set up liability and contract termination terms, and without that stuff in writing, you can end up in a he-said she-said situation over these issues. You should always work under a contract. I have a hard time seeing why anyone wouldn't.

Eh, I appreciate the effort that is being put into this argument but the reality of it is that it's not for me. If I have to drive an hour to see my client or send a lot of things back & forth in the mail it's really just time wasted. A good professional relationship & a couple of emails is all I need for freelance. If you're talking about a long-term high dollar amount thing then sure, I understand. & the reason I d…

"but I'm a programmer not a businessman"

Actually don't short change yourself just because you might not have gone to "business" school. (Did you?)

For example:

"If I have to drive an hour to see my client or send a lot of things back & forth in the mail it's really just time wasted."

Which makes a lot of sense. You have to factor in the pros and cons of all of this which you are clearly doing. What do I stand to gain? What do I stand to lose?

"I just give estimates, tell the client when we're going over-budget."

Exactly. State the framework "$x per hour" and keep them informed of any changes. Super easy to do with email as well. Communicate. I would also argue that getting people to sign things each and every time will get you less revenue because it gives them an opportunity to focus on the dollar to much. Once again, depending on the dollar amount and who you are dealing with. All situations are different.

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

#58

Post by fat0wl »

Silhouette wrote: post #53
fat0wl wrote: post #37

Earlier quoted context omitted.

Yeah it's not like I'd use a threat like "I'll disconnect all your accounts!" but if they have some EC2 instance they don't understand how to operate it does give you some leverage since they will be needing some admin done at some point in the near future. I really doubt they can sue you for refusing to perform maintenance on their systems since we as programmers do not become indentured servants simply from having…

I really doubt they can sue you for refusing to perform maintenance on their systems Of course they can. In most first world jurisdictions, anyone is free to bring a lawsuit against anyone else over anything, and then it's up to the court to decide on the merits of the case. If the court finds that the case was without merit, they might be able to compensate the successful party in some way depending on your particul…

Not to sound confrontational but I think you have quite a few misunderstandings about the software industry and at-will employment. Never have I ever seen any situation where an engineer is beholden to a client without having signed a long-term service contract or employment agreement.

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

#59

Post by larrys »

fat0wl wrote: post #55
larrys wrote: post #46

Earlier quoted context omitted.

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 imag…

Yes this is the business world exactly as I've experienced it. Specifically, #2-4. Handshake deals are great for people who are generally sane and trying to pick up momentum. People advise you lock everything down 100% but they don't realize what a time/energy drain it is on both parties. A quote sets up a reasonable negotiating point and then any deviation from that can be discussed. The client eats it or the worker…

I'll tell you an interesting thing that I learned in a past business where we were given many rush jobs.

Let's see how you view this.

a) Client comes with a rush job and asks you to quote the job and you do. You give them a price.

b) Same clients comes to you and says "just get the job done and bill me whatever it is. I need to get this done."

My question to you (or anyone else) is "under which situation did we end up making more money, "a" or "b" usually"?

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

#60

Post by tzs »

phamilton wrote: post #48
benjamincburns wrote: post #35

Earlier quoted context omitted.

I'd love to hear more details about this. Is this something you came up with yourself, or did you write it with an IP attorney? Would you be willing to share your template agreement somewhere? Has this been a tough sell to any of your clients? Does your agreement include language which either defines what's proprietary or specifies how to define what's proprietary and therefore subject to the NDA?

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 Develope…

If I were a client, a big concern I would have with this license is what happens if one of my competitors rips off my product that is using the licensed software, and I want to bring a copyright infringement lawsuit against them.

Generally, a licensee cannot sue for infringement of something they only have a nonexclusive license for. There is some discussion of this here: http://www.copyrightcodex.com/enforcement-toc/22-plaintiffs#...

Even if my product contains copyrighted material in addition to your material, and I either own the copyrights on or have an exclusive license on that material and so do have standing to sue over it, the presence of your material would complicate things. The defense is going to argue that if they did copy my product, they only copied the parts that I do not have standing to sue over.

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