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A Contract to Cry to Mummy About?
wackimonki




msg:3600571
 2:33 pm on Mar 14, 2008 (gmt 0)

I am in the process of signing a contract to do subcontracting for an IT consultancy. This would be for phase 2 of a 4 phase project. I developed phase 1 for another consultancy I was working at at the time. During phase 1, I worked closely with the client.

A few terms in this contract concerns me slightly. In hindsight, I should have insisted to be a development partner, rather than just a contractor. I would then have attribution of authorship for the development part of the website rather than merely being able to mention it.

Renumeration

Blah Limited will pay a deposit of 50% of the previously agreed phase
fee upon commencement of each phase. This deposit can only be retained
by My Name upon successful sign off of the phase by Blah
Limited.

[I don't like the sound of a 'deposit'. My previously company used the term 'retainer' or no term was used at all]

General Terms

[My Name] will be entitled to make reference to his involvement in the project to
third parties in the interests of his marketing efforts. However all materials
produced will be branded as Blah Consulting.[Oh, can they refer to themselves as a 'Limited' one time, and 'Consulting' the next?]

[I just want to be able to promote in my portfolio after project completion.]

[My Name] will be granted up to 2 weeks interval between the conclusion of one
phase and the commencement of the next.

[I will be doing work for another client during this gap. There will be an additional 4 weeks where non-dev work will take place. I would hate to be bounded to this, but they were adamant it stays. Something about project lifecycle.]

What's everyone's professional opinion?

 

vincevincevince




msg:3600577
 2:42 pm on Mar 14, 2008 (gmt 0)

This deposit can only be retained by My Name upon successful sign off of the phase by Blah Limited.

Don't accept that at all. You must be paid for the work you do. If you do 90% of the work, you should be entitled to 90% of the funds (50% 'deposit' plus another 40%) even if they terminate your contract and never continue. As a general and overriding principle; never allow yourself to be in a position where you might have done lots of work but not be eligible for full payment in respect of it.

will be entitled to make reference

Sounds like you get the portfolio reference - seems okay to me. They just don't want your name on the work you do there.

[My Name] will be granted up to 2 weeks interval

General principle - whenever you get bound by something or are bound to do something - it must cost. If they restrict you, that needs to be reflected in your fees (project delay fee?)

However, other than the nonsense about your upfront fees being returnable even when you've done the work to cover it (which is totally unreasonable as a clause), the other points you raise seem to be nothing you can't remedy with a fee increase.

Important clause which you need to get added if it isn't there: Signing off clause. If Blah Ltd. refuse to sign off without good reason, you could get left without being eligible for the rest of your funds in perpetuity. You need a clause which provides for a binding independent arbitration of whether your work meets the original agreed and signed technical specifications document, should you disagree with Blah Ltd. about the final status.

Other important clause: Variation orders need to be provided for - make sure they are. This means a clause to say that anything other than the original agreed tech spec which you are told to do via [email? letter? ....] by Blah Ltd. may be billed in addition. It needs to specify how rates are fixed for this (hourly? at your discretion? quotation and agreement each time?) and then when the VO payment is invoiceable (with final project payment? immediately after VO?...)

wackimonki




msg:3600659
 3:49 pm on Mar 14, 2008 (gmt 0)


This deposit can only be retained by My Name upon successful sign off of the phase by Blah Limited.

Don't accept that at all. You must be paid for the work you do. If you do 90% of the work, you should be entitled to 90% of the funds (50% 'deposit' plus another 40%) even if they terminate your contract and never continue. As a general and overriding principle; never allow yourself to be in a position where you might have done lots of work but not be eligible for full payment in respect of it.

If there's a dispute at the end, would normal contract law cover it? i.e. mutually agreed percentage payment, if no agreement can be made, an independent party must assess it. I live in London so would come under England & Wales law.


Important clause which you need to get added if it isn't there: Signing off clause. If Blah Ltd. refuse to sign off without good reason, you could get left without being eligible for the rest of your funds in perpetuity. You need a clause which provides for a binding independent arbitration of whether your work meets the original agreed and signed technical specifications document, should you disagree with Blah Ltd. about the final status.

How would I phrase this clause?
Perhaps:

In the event of a dispute, payment amount from Blah Ltd to My Name can either be 1) amount equal to an mutually agreed work completed percentage, or 2) an amount equal to an independently assessed work completed percentage.

Not great English, and certainly not plain English!

vincevincevince




msg:3601193
 2:43 am on Mar 15, 2008 (gmt 0)

If there's a dispute at the end, would normal contract law cover it? i.e. mutually agreed percentage payment
So far as I know, this only applies if your contract hasn't overridden it with something like 'no payment due without final phase signoff and deposits can't be kept unless signed off'.
lammert




msg:3601591
 8:06 pm on Mar 15, 2008 (gmt 0)

What's everyone's professional opinion?

For professional advice, please consult a lawyer, not WebmasterWorld.

But as an amateur I can tell you my golden rule: "If you have the feeling that a contract sucks, don't sign it." You have all rights to do what you want to do until you signed the contract, after that you are bound by the terms in it. We cannot decide for you if the terms are reasonable for your situation, you have to decide that yourself.

Undead Hunter




msg:3601660
 10:41 pm on Mar 15, 2008 (gmt 0)

How about a "kill fee" in addition to that sign-off? So they can say no to that phrase and in fact the rest of the project, but it will cost them, say, $1,500 to end the project right there. So you get some payment, and they don't get away scott-free.

With this economy I wouldn't go with it as it is. They could get a directive from home office to cancel ALL projects, and end things right there without paying you for it. That's what happened to me in 2002 when the economy dropped, here I was consulting for a huge Fortune 500 company but didn't have a kill free or contract breaking fee of any kind. Stupid.

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