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I began doing freelance work before watching "f*ck you, pay me." by Mike Monteiro, and did not negotiate a contract when starting my first job. I will be sure to use a contract in the future, but I'm trying to decide whether or not I should negotiate one for this job, before receiving payment. (Luckily, the client is willing to pay)

I began developing an application where the client negotiated a pretty low price (it's my first production development gig, after all) in return for two promises:

  • He'd cooperate with any trouble due to bugs, so long as I fixed them quickly.

  • He'd help me sell the app for full price to 2-3 other business owners in his line of work.

Because of these terms, I think it's appropriate that:

  • I retain the rights to distribute the software, and sell him the rights to use, but not sell, the software indefinitely.

  • I retain the rights to sell any updates to the software in the future as I see fit.

Since we started this job without a contract, would it be appropriate for me to negotiate one before I hand over a copy of the product?

  • I'm not worried that the business owner will sell (if he knew how to) or distribute the software.

  • I'm not worried that I won't be paid.

Is it too late to / should I negotiate a contract now? If not, how should I discuss this with the client?

  • 2
    It's not too late, and the client should not be upset from your request if he is good client. – Dot Freelancer Jun 15 '14 at 20:27
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    I read that you're in the USA. But stackexchange is a global site, users should be aware that law (especially on software) is different in different countries (or even states). In France, for example, by default software (even specifically for a paying client, even with a contract) fully belongs to writer. Client only has the right to use it for the business discussed at the time and safety backups, nothing more. But I am not a lawyer, so don't trust this comment, and furthermore this is a question in itself, so it shouldn't be discussed as part of the question above. – Stéphane Gourichon Jun 19 '14 at 7:26
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It's not late till it's late, the saying says :).

You should definitely try that. Explain to him that you did not ask for it before, but now when you are so deep in the project, you think that you two need a written agreement.

Negotiating the contract terms, you will probably see if the client is really good or just one of those looking for cheap slavery work.

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Definitely not too late. You'll have in your favor the fact that you're not trying to change the terms of payment, simply be more explicit about the surrounding terms.

If the client balks at negotiating one now, you can simply complete work to the nearest milestone (assuming you have development/payment milestones agreed to), then end the relationship. It's not worth working cheaply for someone who doesn't respect you enough as a professional to agree to a contract (unless you are actually desperate for the money, but it doesn't sound like that's the case).

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No, no, no, no, no.

There's no one in his (or her) right mind that will pay you as a work-for-hire and then allow you to retain ownership. That'd be really a really stupid business move on the part of your client.

Let's think about this a second. What if, instead of the software business, you were in the home building business? Someone pays you to build a home, and halfway down the way of getting the home built, you tell the person you want to license the home instead of selling it. GTFOOH! If you tried to force your hand on significantly changing the contract terms, a competent court of law would bury you beneath the courthouse.

You DO have a contract, though it seems you don't have a written one. It is never too late to put together a written contract to memorialize the agreement that has already been expressed orally, but your client will not go for what you're trying to do. Then again, maybe you have a really, really dumb client.

  • The client suggested what I'm wanting to put into a contract as a means of securing a price on nearly half of what the job would go for normally via a freelancer (this would likely be an 6-8K job for a dev team, priced at 2K on the terms that I could resell the software to other agents). I should mention, this is a situation where the agents that the software will be resold / licensed to are in control of specific areas and do not compete. – user4118 Jun 16 '14 at 23:47
  • Also worth noting what the OP describes is not "work for hire". It sounds to me like the client wants an out of the box software solution, but one doesn't exist. They're willing to subsidize the development of that solution. (This is fairly common, and this answer gets a downvote from me for obvious ignorance.) – livingtech Feb 15 '17 at 16:18
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You complicate a simple matter.

First, think at how to find more than just one client, then make a habit writing a contract after negotiations end (not after a client promises' you help to sell the product he/she is paying for).

In life, it is good not be greedy. You will always gain more by trusting your partners in business. This being said, it is smart to write a contract, at least now, if not from the beginning. If the client already agreed to this, then for sure you should write a contract.

Should you try re-negotiate on it? Definitely YES. The smartest thing you can do is to ask for more instead of giving up just because you say so. If you don't ask, you receive nothing.

Now, I will bring into discussion the fairness behind your actions. Re-negotiate the terms because it is smart doing so but not only because you became greedy.

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Software and works like web page design are governed/protected by copyright in the United States.

If you had no verbal or written contract stating that your work is a work for hire or that you grant IP to your client, then you automatically retain all copyrights.

What this implies is the following :

  • In order for your client to use your work legally, you must provide them with a written license, or agree to assign the IP to your client.

  • In the absence of any agreement, they cannot use your work (in practice copyright is only enforced if the copyright holder sues for infringement, so by doing nothing you can effectively grant a license, but this is a future landmine for the client if you happen to change your mind for some reason).

I would advise that you pay a lawyer to write up a license agreement with the terms that you want, and give it to the client. Explain that he will need this to legally use the software.

Then wait and see if he negotiates the terms, he may not...

  • This is off topic, but is that done often for a medium/small-ish job, having a lawyer write a contract? It seems like that might cost about $400-$500 USD – user4118 Jun 21 '14 at 3:35
  • That's something that I've been wondering about; Template contracts would seem ineffective, not being tailored for the job and precise situation, but having a lawyer write one might cost over 10% of a small job's value. – user4118 Jun 21 '14 at 3:39

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