How much should one CYA when doing a simple freelance project proposal?
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I got a lead for a relatively small (30-40 hours) project with a small company to do some general software work. Nothing crazy, just update their platform, consult on seeking a new host, and some performance optimization. Said company said they'll look forward to a contract to get started.
The few times I've done side gigs it has always been through an agency who handles that paperwork. So, I wanted to ask here, how serious should this contract be? My thought is to just define the scope of work, provide estimates, contingencies, and basic info on billing terms and expectations (e.g. full delivery/deployment of milestones upon reviving full payment, travel expenses if any are to be fully reimbursed, that sort of stuff)
I don't forsee this company being letigious or petty, but I would like to avoid obvious pitfalls and loopholes that might leave me without what I'm owed or liable in case there's some nitpicking (e.g. the site doesn't load in 0.001 microseconds on a 3G potato phone, therefore performance improvements are insufficient to be considered worthy of payment)
Seeing as it is a small project, I don't feel the need for crazy legal formalities but I would like some protection from getting screwed in one way or another. Anyone who's done this sort of thing more often feel free to give me advice. I am looking at a T&M approach. I'm in the USA, as is the company (but different state).
I also have an LLC but I haven't used it for this kind of business in a while and feel like operating under my own name instead, but I'm not sure if I'm mashing a mistake by doing that.
Thanks
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@The_Quiet_One said in How much should one CYA when doing a simple freelance project proposal?:
I also have an LLC but I haven't used it for this kind of business in a while and feel like operating under my own name instead, but I'm not sure if I'm mashing a mistake by doing that.
It looks like the US is the same as the UK in that if you perform work as a sole trader then your liability is unlimited. So it seems like you'd want to do it under your LLC to protect yourself.
how serious should this contract be?
I'd say 'quite a bit' personally. I use a free contract template I found that seems sensible and reasonably comprehensive, it really just covers the things you mentioned though:
- Payment expectations, stage-gates, who has exact ownership of materials and IP throughout the entire process, final sign-off and final payment time limits.
- Who has the liability for overruns and any costs that may be incurred from those.
- Travel/meeting/teleconference expectations and who pays for incidental costs.
- Notice that any spec changes beyond the original agreed spec will be chargeable, if accepted at all, and may incur additional time for delivery.
- Some notices about who decides what 'meets delivery spec' is and how arbitration would be handled.
I should pay the money to get a solicitor to look it over for me, as I don't actually know if any of it would stand up legally.
@The_Quiet_One said in How much should one CYA when doing a simple freelance project proposal?:
I don't forsee this company being letigious or petty
You might not always be dealing with them as such; it could be their insurance company because something went very wrong, the receivers because they went bankrupt, new parent because they got bought etc....
@The_Quiet_One said in How much should one CYA when doing a simple freelance project proposal?:
T&M approach
Sounds sensible, as long as the maximum covers you for anything you think could possibly happen and still squeak into the contract terms. Most of the horror stories I've heard of have been fixed-price and sloppy specs.
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@The_Quiet_One I have (almost) zero legal knowledge, and much less about US laws, but I wonder whether, for such a small(-ish) job that doesn't seem to be going to be your main line of living (but maybe I'm wrong here and this is just the start of bigger things to come?), you really need much apart from what's necessary to limit your liability?
I mean, either the other party really are normal guys and a detailed contract won't change anything (they'll pay you even if they're not 100% happy, they'll will understand potential difficulties and won't sue you to death and so on), or they are bastards and a detailed contract won't change anything (they will always find a way to weasel around what you've written -- even if you were a lawyer, they'd find a way to dispute things -- and will delay payment to the point where you'd be loosing more money that you'd gain from them, which I'm guessing will happen pretty fast on a small contract).
So definitely find a way to limit liability, and depending on your state look up if there are standard T&C or similar clauses that apply more or less automatically (this is quite common over here), but apart from that, stick to simple stuff that you actually understand rather than length legalese?
I don't know whether I'm being too cynical or too naive...
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@remi This was sort of my idea, yeah. I mean, if I work on it and in the end am out of money due to me, it's just not worth the effort to chase it with lawyers and arbitration. Both the time and expenses would just make it pointless, and the only thing they'd be out is me never doing anything with them ever again. I do know this is only the first phase of several other things they want to do, so while it isn't the start of anything that would change my career or anything, it might give me a few extra bucks for this year.
I don't get the impression that these folks are at all unreasonable. I have worked with unreasonable folks in the past, and they typically make themselves known pretty quickly from the initial conversations I have with them. I am always upfront about how I charge and what I expect of them: I charge X amount per hour, and anything I do for them to reach their solution should be considered billable time, including research and discovery, at my discretion, and then gauge their reactions accordingly. The unreasonable ones will immediately come back with a bunch of questions like, "But all you're doing is tip tapping on a keyboard. How is that worth $XXX an hour?" That said, I'm fair and will not charge them 15 hours of time because I spent it on spinning my wheels on a stupid problem I missed an obvious solution for.
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I think it is worth the investment (especially if you foresee doing this again in the future) to get a base generic contract created that you can slightly modify as needed. You can use something like
suggested or go all out and have a lawyer draft you one (which really won't be that expensive). Either way I think its worth it, even if they are the best people you have ever met. Things can go sideways and it is better to be covered if they do.
