[mazzman]

We have an offer to develop a website for a client. The deal is that we get a percentage of the profits. No fee upfront. What kind of contract do we need? Should I take the offer? Anyone done this before?

[Tek Scavenger]

This is a consignment or contingency contract. This is the kind of thing the "ambulance chaser" lawyers do. You're banking on your skills here, the better you do the more you can get paid. Check out the job and find out the offered rate. If it's acceptable to you, then why not? The potential may be enormous. If you don't think it's going to pay well no matter what you do, then don't do it. It's your decision, I can't make it for you. It is a legitimate contract though if that's what you are asking.

[mazzman]

Ideally we'd like to get a down payment of some sort. After that, we're happy to "maintain" for the steady revenue and little work, we hope. We don't have a contract and would need to have one made up, so thanks that gets us started. Question is, what can we do to lessen our exposure? What recourse do we have should someone "hit and run"?

[JohnnyC123]

Originally Posted by Tek Scavenger

This is a consignment or contingency contract. This is the kind of thing the "ambulance chaser" lawyers do. You're banking on your skills here, the better you do the more you can get paid. Check out the job and find out the offered rate. If it's acceptable to you, then why not? The potential may be enormous. If you don't think it's going to pay well no matter what you do, then don't do it. It's your decision, I can't make it for you. It is a legitimate contract though if that's what you are asking.

I agree with this post,

If you're interested in the offer ask for an upfront fee somewhere around your desired percentage of what you would be asking for the build e.g. 50% then ask for the 50% cut in to make your full value?

Maybe something like this is a bit more reasonable, generally new websites and designs take a while to generate any sort of profit unless you're a guru.

Regards,
Johnny

[mazzman]

That's a really good idea. We were discussing a small up-front fee to cover some expenses and less revenue sharing in the long-term. Ownership of the sites worries me a bit. And to take legal action would be cost-prohibitive.

[Patrician]

I would check into an escrow account - where they have to put the money, pending your completion of the job. You know right where it is when you are ready to sign off on the job...

Just remember time is something they can't refund you. So if you spend a lot of time and then they flake or cave, you might say oh well nothing lost.

... but it wouldn't be true.

This may be easier than putting together a contract and would afford you more protection than a piece of paper (that is virtual lol).

Check out the escrow services - I queried 'internet escrow account'

http://www.google.com/search?gcx=w&i...scrow+account+


p.s. it goes without saying to document every conversation you have with them - emails/skype text history/recording voice chat, sites, links, their offers/terms - whatever - should filing a dispute ever be necessary, (even if it is your best cyber buddy) credit card/payment processing disputes or for that matter any kind of court proceeding, it is about who is holding the most papers - who has an organized, documented case - easiest to create a paper trail as you go along rather than when you are in chaos.

treat it serious like a business.

[larrydcook]

Originally Posted by Patrician

internet escrow account - Google Search


p.s. it goes without saying to document every conversation you have with them - emails/skype text history/recording voice chat, sites, links, their offers/terms - whatever - should filing a dispute ever be necessary, (even if it is your best cyber buddy) credit card/payment processing disputes or for that matter any kind of court proceeding, it is about who is holding the most papers - who has an organized, documented case - easiest to create a paper trail as you go along rather than when you are in chaos.

treat it serious like a business.

Great & wise advise Pat! I would add host it yourself include maintenance fees, keeps you in control!

[Gail Fernley]

Originally Posted by mazzman

We have an offer to develop a website for a client. The deal is that we get a percentage of the profits. No fee upfront. What kind of contract do we need? Should I take the offer? Anyone done this before?

Originally Posted by mazzman

That's a really good idea. We were discussing a small up-front fee to cover some expenses and less revenue sharing in the long-term. Ownership of the sites worries me a bit. And to take legal action would be cost-prohibitive.

Mazzman,
In the bold print above in the quotes I took from your posts, I seem to think everyone here who has responded has missed the mark...
The way I read your two comments above, someone wants you to do a job, up front for no fee, for part of the "profits" this site will generate down the road... (Am I right?)

I have often wondered about such "partnerships" myself and always wanted to know (if I did take such a job) how would I know I wasn't being cheated somehow by the partner showing me lower gross/net profits than actually occurred...:confused:

By what arrangement can you (or me or anyone) guarantee that access to the true information for purposes of getting paid exactly what is owed under the agreement of "profit sharing?"

As another warrior pointed out in this thread, escrow services can (sort of, in most cases) guarantee you will get paid any agreed "fees" for "work done," but in the case of an ongoing profitable, perhaps lucrative situation with another individual or company, I don't think escrow services will be of much use...

In a situation such as this, if I were in your shoes, I would personally evaluate the viability of the commercial enterprise this potential "partner"
has offered profit sharing for and THEN take all the info I have to an attorney who deals in such business relationships (partners in a single enterprise) and ask for the advice about 1) what type of contract could be written and 2) how the profits could be verified from the other partner...

Just my two cents worth, Mazzman... But, in truth, (like I said in the beginning), I really always wanted to know how those types of relationships actually worked, so I am curious to know how you will eventually handle the profit sharing thing... Looking for your future post!!

see ya,
Gail