Contract Issues for Consultants and Clients
Presented by Rob Adelson
Legal Issues in Consulting, Licensing, Subcontracting, and Software Development
As a consultant, entrepreneur, client or professional, you are often dealing with contracts, your own and others.
- What should you be looking for in your contracts? What makes a good contract?
- What terms to include in consulting agreements? Contract and tax issues structuring compensation?
- Should I hire a subcontractor? How to structure the Relationship? What protections do I need? Why contracts are needed between friends.
- What terms to include in software development contracts? How to structure milestones and intellectual property rights?
- How to negotiate VAR and distribution agreement? Terms to include in licensing products and technology?
1 - Making Good Contracts. Contracts should be clear and complete to reduce uncertainty, and cut legal costs to enforce. The contract should cover
- Mission - Defining your mission and covering the scope of contract
- Conditions - Current and relevant variables, contingencies to performance
- Reliance - Setting out warranties and representations that each side relies upon Consideration – Stating what each party contributes regardless of form it takes
- Mutuality - requiring each party to contract to “ante up”
- Commitment - Timing contributions so vulnerability to non-performance reduced.
Proposals – How/whether to include in contracts
2 - Client Consulting Agreements. Contracts should set out Scope of services, reports, deliverables, and set out agreed restrictive Covenants – confidentialty, assignment of inventions, non-solicitation, No-raiding and non-competes as negotiated and agreed.
3 - Compensation Arrangements. Manner of payment whether by Job and assignment with rights for change orders, or by time and materials. An advance should be paid, with collection terms for late payment. If cash is short, debt or equity terms should be negotiated and spelled out. Immediate issuance of stock with appropriate IRC §83(b) elections can Avoid costly tax “surprises” down the road if a company does succeed.
4 - Subcontractor Arrangements. One hates to turn away business and if your consulting has reached that level, hiring qualified subcontractors to help can be a win-win-win. But hereto, a proper contract to assure no poaching of your clients and clarifying compensation terms can help.
5 - Software & Product Development. These contracts should include Accepted specifications, terms of acceptance, milestones for completion and payment, and a parsing of intellectual property ownership rights to assure the developer ownership of his tools and the client his full rights in the product being developed if paid for. Termination rights, source code escrows, warranties, maintenance and upgrades are also important for the completed agreement.
6 - Liability, i.e., how do I keep from getting sued. Insurance, etc.
7 - Removing NDA agreements for public domain information.
Robert A. Adelson, Esq., is a partner in the 6-attorney Boston law firm of Engel & Schultz, LLP. A corporate, tax and contracts attorney for over 30 years, Mr. Adelson holds degrees from Boston University, Phi Beta Kappa, Northwestern University Law School in Chicago, Law Review, and NYU Law School, LL.M in Taxation. His clients are (1) early stage technology-based companies, (2) consultants and service providers, and (3) senior executives and key employees.
Robert Adelson can be reached at:
Engel & Schultz LLP
One Federal St, Boston, MA 02110
website is www.executiveemploymentattorney.com
The meeting is open to the public. No charge for Consultants Network members or Olin College students/faculty; $5 entrance fee for all others. Casual dress.
The Consultants Network meeting starts at 6:30 PM. The meeting location is at Olin College, 1000 Olin Way, Needham, MA, in Academic Center 113.
From the East or West
Take the Massachusetts Turnpike to Exit 15 (Interstate 95/Route 128; if driving from the East; Exit 14 if driving from the West). After the tolls, follow the signs for Route 95/128 South. Exit Route 95/128 South at exit 19B (Highland Avenue, Needham). Follow Highland Avenue for 1.5 miles to a three-way intersection with Chapel and May Streets; bear slight right onto Chapel Street (to the right of the gas station). Take a right at the first light onto Great Plain Avenue/Rte 135. Then follow "From Great Plain Avenue" directions below.
Take Route 95/128 to exit 19B (Highland Avenue, Needham). Follow Highland Avenue for 1.5 miles to a three-way intersection with Chapel and May Streets; bear slight right onto Chapel Street (to the right of the gas station). Take a right at the first light onto Great Plain Avenue/Rte 135. Then follow "From Great Plain Avenue" directions below.
From Great Plain Avenue
Proceed on Great Plain Avenue for 1.5 miles and the Olin College campus will be on the right. Enter the campus at "Olin Way" and follow the road around to the left to parking lot A, which provides access to all campus buildings. The meeting is in the Academic Center, which is the first building to the left, as you walk up from the main lot. Handicap parking is available.
Olin Way to enter the campus.
Check the Consultants Network website for details and last minute information of our upcoming lectures series for 2012-2013
For more information, e-mail firstname.lastname@example.org or email@example.com; or contact the chairman Heinz Bachmann at 978-637-2070. The Consultants Network website is at www.boston-consult.org.