“Don’s step over a dollar to save a dime.”
I frequently hear from clients and soon-to-be clients with some problem involving work by an independent contractor. The independent contractor was hired to do some creative work – develop software, write code or create an app, write a script, film or shoot some performance – some endeavor that involves handling copyright protected content. Or creating content that results in copyright protected content.
The problem often arises because unless a contract with such an independent contractor specifies it is a “work made for hire,” it may be that the employer of the contractor does not own the copyright to the resulting material. Or the absence of a written contract, or one grabbed off the internet – one never reviewed by a lawyer, insufficiently protects one party or the other in any number of ways.
Other contract pitfalls abound.
So I thought it might be useful to post these critical considerations for any contract. This is by no means an exhaustive list, and some of these items may not be appropriate for every contract or situation.
But these items should be considered whenever entering into an employment or independent contractor situation, and ideally considered in discussion with an experienced attorney (such as Yours Truly).
1. Use a written contract. If work is to be done, there should be a written contract. I don’t care that the person doing the work is a friend, girlfriend, spouse, conjoined twin – use a written contract that clearly spells out the agreement between you. That includes anyone doing work on your project: coder, graphic designer, photographer, writer, screenwriter, copy writer, editor, engineer, artist, web designer,… anyone doing any work that you will be incorporating or utilizing in your project or product.
2. Milestones – important measuring devices. Delivery milestones are a critical element in these types of contracts. You want delivery or “deliverables” milestones in these contracts because they cause (a) ongoing quality control, (b) an early warning system for problems, (c) timely delivery on the agreed schedule, and (d) an ongoing dialog and approval process (and therefore termination grounds if necessary) for the anticipated work.
If there is only one delivery date, that is often the date upon which the hiring party receives their big disappointment – and the bill from the independent contractor who, in his mind, just delivered in good faith, and therefore expects to get paid.
3. Warranties and expectations. Warranties in the contract pre-negotiate how the hiring party intends to use the work product, and what rights it expects to have at the completion of the work. These sections first and foremost warrant that the independent contractor will be providing “original” work, as opposed to repackaging someone else’s work, or work that the contractor did for a previous client.
Further, public domain, free or open source software/tools may be used to create your project. The contract is the time to specify what is or is not acceptable. And it may be important to specify on the front end what intellectual property rights the hiring party expects and needs in the finished work – and therefore what free or open source tools may – or may not – be utilized in creating the work.
4. Termination Clauses and other unpleasantries. A termination clause is important to specify when the contract may be declared terminated. Nonperformance, unacceptable performance or quality, dissatisfaction with aesthetic aspects? What is one party’s good faith performance may be the other party’s breach or failed performance. A well thought out termination clause may allow the avoidance of litigation.
5. Law, Venue, Alternative Dispute Resolution, and other lawyer crap. Dispute resolution issues, such as applicable law and venue, or even procedures to potentially resolve disputes outside of court, may save tens of thousands of dollars and countless hours of wasted time, energy and focus.
Having been a full time litigator for 13+ years, and now a corporate/contract/transactions attorney, I know that when a company or person ends up in court – even with a winning position – they have already “lost.”
The best way to avoid disputes, and to avoid the financial and resource waste of litigation, is to carefully negotiate and draft contracts on the front end of a transaction.
Often the few dollars one attempts to save by avoiding a lawyer-drafted contract ends up being the most expensive “savings” that never was. One has stepped over a dollar to save a dime.
If I may be of assistance to your company or endeavor, I would welcome you getting in touch.
Business • Entertainment • Media