I'm in a rather unusual situation.
Client comes and asks me if I can build an app with this and that technology. After we agree on hourly rate and time schedule, they ask me to do a coding challenge before we sign the contract.
We are both, me and the client, LLCs. They have seen my website and portfolio.
Has anyone else been asked something like this before ?
It's similar to if someone said to you, "I will only pay $5 per hour" for something you know they can't get from any other qualified person for less than $80+. Just laugh and keep on moving. The fact you tell them, 'no' could motivate them to skip the requirement. You have to have confidence.
No it doesn't matter if coding challenges are (relatively) common in the full time employment job hunting world. Don't do anything for free for somebody who hasn't even paid you a dollar. To put it all in perspective, there are potential clients who would pay you serious cash just to think about working on their project.
It is reasonable for a client/company to run a practical test before hiring somebody. However, given that such a test takes time and effort, it is also reasonable that you ask to be paid for it - at least a symbolic price. If they ask you to do it for free, assuming that you are desperate for the job or that they can always find another candidate like you, it is a sure red flag about how this company treats its employees.
Yes, Maximum time the clients and the company do this. First they give you some task and check you, if you can successfully do the challenge. Actually they look for your enthusiastic approach, problem solving skill, communication skill, clean code skill. They do it for long term relationship with you. If you success then they give you Job with nice figure salary and other benefits.
It'd be useful if you could describe on your post the code challenge which he've proposed to you, sometimes those ones are pitfalls made by your customer to get work done without actually getting you paid. Anyway, be much careful regarding yours agreeds established with your customer in that current way which it's been realized.
The request is common enough however, you should weigh the benefits of working for the company. The timing is as was already mentioned there are plenty of people willing to pay you simply to discuss their project with them.
On the other hand for example, and this is an outlier perhaps, but Google does much more than a single test to prove you're worth employing. I'm sure you are familiar to some degree about their and other companies procedures of interviewing a candidate.
This is Feelance so the "pros", the money or potentially the project (experience, personal interest) could make it worth your while.