Contracts for private projects

4 replies
I need to know what is considered standard procedure as far as Contracts go, when a programmer is hired to produce a piece of software.

Let's say a small company came to you asking if you could build a solution to their problem, you say yes, now what?

Do you send them a standard contract, or do they send you a contract?

Do you produce a Scope of Work agreement?

Would you work on a multi-week project without a contract?

I know, lots of questions. But I am in a learning mode, so thank for any useful responses.
#contracts #private #projects
  • Profile picture of the author kevbo22
    Originally Posted by 1963jag View Post

    I need to know what is considered standard procedure as far as Contracts go, when a programmer is hired to produce a piece of software.

    Let's say a small company came to you asking if you could build a solution to their problem, you say yes, now what?

    Do you send them a standard contract, or do they send you a contract?

    Do you produce a Scope of Work agreement?

    Would you work on a multi-week project without a contract?

    I know, lots of questions. But I am in a learning mode, so thank for any useful responses.
    I would never work on a multi week project without a 50% upfront fee and contract. Been burned way to many times for that non sense. On a project that would take that long, I sit down/skype with my client to figure out exactly what he/she needs. Then I put it in the scope of work in the end of my contract. If they agree, we start work, if they dont agree, I work with them on any changes to the scope of work and fees.

    I do this because if I take a project and finish to what I think is done, they can always say "its not done, you need to do this...". But with a contract, I know exactly what "finished" is, and so do they.
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  • Profile picture of the author Joe Ray
    I agree with Kevbo22, it's like in any other business.

    First, I negotiate, then I usually enter into a MOU to make sure the client means business. I would invoice them 10% of the fee upon signing the MOU to make sure I am not wasting my time drafting a long form Agreement.

    Next, I draft the Agreement which will include all the details about the scope of the job, the software, the license, the delivery and so on. When the long form Agreement is signed, I send an invoice for 40% of the fee. So, I take 50% of the total fee before I start the development. I invoice the balance (50%) upon delivery.
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    • Profile picture of the author cfountain
      I like Joe's approach in getting 10% up front on the agreement signing, then pony another 40% before starting work. There can be significant effort involved just scoping out a project. You can get burned at the get-go.

      Typically I do not take on a lot of side work, but if a big project comes along I do consider it. A few years ago I delivered a project for a small insurance agency. It was a significant job just under the 5 figure mark that took several months to deliver.

      I knew the agency was price sensitive, so I divided the project into 6 milestones scheduled 30 days apart where I got paid after delivering each milestone. Development was complete at milestone 3, the remaining 3 were monthly payments during the 3 month warranty period.

      It seemed fair to both parties. They had skin in the game up front, and I had skin in the game through the warranty period to provide support. We both had to trust each other. The number of milestones kind of ensured that payments and services would keep flowing throughout the project - building trust on both sides as we went along.

      Looking back on it it seems like I had quite a bit more risk than they did going into it. I might have preferred to do 1/3 up front, 1/3 on delivery, 1/3 after warranty or similar. I don't think in that case I would have been able to get 50% up front. They were not used to writing checks that big for software.

      I remember when that opportunity fell in my lap and I did not know where to go with it either. I used the Proposal Kit software (https://www.proposalkit.com/) to document the project and a generic contract template I adapted. I highly recommend Proposal Kit. It was worth the money. It was a life saver for me as it gave me a professional looking template to help document the proposal.

      There were no lawyers involved. It was more of a gentlemen's agreement but we did have a good documentation in place. It worked out OK and I got plenty more work from them in the years that followed.

      -Clint
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  • Profile picture of the author PeachCoding
    Personally I break the bigger projects into milestones, outline what's expected from each milestone on a contract covering the project scope, how long each milestone will take, how much is due to start, how much is due upon completing each milestone, explain that "scope creep" (changes to the project scope) will add a cost for the changes and make that the agreement signed by both parties. That way everything is clear before starting to avoid any issues and/or misunderstandings.
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