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contract.
This is a true story. I did modify the names of the protagonists to protect their
identity.
Recently a close friend of mine introduced me to an acquaintance of his. Alex
Garland ran a small software development shop building custom workflow systems
for construction engineering firms, he named his firm: Optimal Engineering, Llc or
OE, LLC for short.
Since we were based a good six hours drive away from each other, Alex. and I
arranged to have our first meeting over Skype. During the meeting Alex Garland
described for me in great details the kind of software his company builds, and what
database and software development stack his developers are using. He also gave
me a demo of a sample application built by his company. Overall, the interaction
went quite well.
As it turns out I was planning a trip to his part of the country, so a few days later
we agreed to meet in person at his house once I arrived in the region where his
company is based.
I arrive at the expected time at a McMansion somewhere in the far suburbs of a
large metropolitan area. Alex met me at the top of the driveway leading to his
house. I entered his well-appointed McMansion where our conversation began with
small talk and tea in the living room and then moved to the newly redesigned
kitchen for more substantive talk and lunch. My host did most of the talking. He
expressed excitement on the perspective that with my help, he will be able to focus
his time on selling his firms capabilities to new clients. He also stated several times
that he didnt have the bandwidth to do a proper job managing all his projects.
His main concern was how to insert a professional project manager into the flow of
projects and how to get his long-time clients accustomed to paying for the
overhead cost of a project manager. He had given some thought to this dilemma
and had concluded that I would start first by working part-time on the projects of
his longest tenured client. Starting by working part time was great for me, as I was
working on launching my own visual analytics consulting firm and after some
consideration, I quoted him a $60/h rate. I still wanted to check exactly how the
local city gross income tax worked. After one and half hours of friendly
conversation, our meeting ended on a very positive note and as a next step, he
asked me to confirm my hourly rate
The second surprise contained in his email, was the news of this candidate coming
out of nowhere. At this point, I had been talking with Alex Garland for several
weeks, we had met in person and at no time did he ever indicate that he was
considering other candidates. Moreover, he had all along given fairly clear signs,
such as requesting my hourly rate, that he wanted to proceed with contracting me.
On the other hand, Alex never explicitly stated that he wanted to proceed. I
replied expressing my surprise and promising to get further clarifications and
confirmation from my accountant.
A couple of days later, I got confirmation from my accountant and then notified Alex
by email. After a few days, he replied with this email:
Thank you for being patient with me. I am ready to proceed! Please let me know when
youre available so we can go over next steps (contract, start date, offer letter, etc.).
A day later, I received via email a draft contract, with the following text:
Please take the time you need to review it carefully. If you have any questions or edits,
please go ahead and make the necessary changes (with change tracking enabled).
I profoundly dislike reading or reviewing legal text. Reading complex sentences full
of legalese is quite dont be shocked! - laborious for me. Somewhere I hold a
judgement that legal gibberish is designed to obfuscate the real intent of a contract.
Regardless, I forced myself to read through the legal text. The first read-through
left me numb and perplexed. Aside from the usual non-disclosure and non-compete
clauses, there were a number of paragraphs that were as opaque to me as reading
Kanji characters on a dark night. He said to take my time, so I decided to do that
and proceeded to sleep on it.
At some point during the night, it dawned on me that the contract made no
provisions whatsoever to revise the $60 hourly rate. Since the intent was that this
would be a long-term relationship, I could be stuck at $60/h for a very long time.
The next morning, the first thing I did was to write a short sentence that set up
regular performance reviews and provided for mutually agreed upon revision of the
hourly rate. I was happy with the short, sweet, to-the-point sentence I came up
with, which I thought was worded fairly. I also realized that if I found one
2
shortcoming to that contract there may very well be more hiding in those strangely
worded sentences, so I went through the legal text again and again.
After multiple read-throughs, the first of what would turn out to be many clauses
called out to me for revision. The clause required a 90-days warning from either
employer or employee before terminating employment.
The text read:
a. Termination for convenience.
Either party shall be permitted to terminate this Agreement for convenience on 90 days' written
notice to the other Party.
I was ambiguous about the clause as one possible interpretation was that it is
meant to protect the interests of the contractor/employee. Then I realized that it is
protective of contractor interests only if other employers adopt the same practice.
In other words, unless a prospective employer wanted to wait 90 days for my start
date (certainly not the norm in the U.S.) I would be out of luck and it would pose a
real challenge in switching jobs. I decided to reduce the notice period from 90 to 30
days which is more in line with American business practices, thinking that we could
compromise to a 45 days waiting period, if needed.
The second clause that needed revision specified the number of days I had to
provide a response to any notifications I would receive. I felt that the time I would
have to respond to any notification was a bit short, so I slightly increased those
timelines.
Another clause that concerned me was one that specified the frequency I was to
issue an invoice for my work and the frequency at which I would get paid. Here is
the text of that clause:
Invoices, Payment and Late Charges. All services rendered hereunder shall be
invoiced once each Calendar month. OE LLC shall make payment fifteen (15) days of receipt of
invoice.
In other words, I could be paid up to six weeks after submitting my invoice which
seemed outside acceptable norms for payment even for independent contracting.
I adjusted the invoice submission frequency to every two weeks and payment of my
invoice within five business days which I later confirmed is more in line with
accepted practices for contractors in the software industry.
Finally, I stumbled onto this clause:
Limitation of Remedies & Liabilities.
a. Remedies.
Except for certain injunctive relief authorized under Section 6 ("Injunctive Relief"),
Optimal Engineering LLCs sole and exclusive remedies for Contractor's default
under Sections 7(a), 7(b) or 7(c) shall be (i) to obtain the repair, replacement or
correction of the defective Software, services or deliverable to the extent
This clause made me financially responsible if I were to infringe any copyright laws
(Paragraph 7.a. Noninfrigement Warranty). Paragraph 7.c. held me financially
responsible if were to infringe any applicable laws, rules or regulations. Pretty
standard stuff. I was fine with both stipulations.
Then there was paragraph 7.b which made me financially responsible for
Undocumented Features.
Here is the text of paragraph 7.b.:
No Undocumented Features.
Contractor represents and warrants that (i) none of the Software will contain any timer, counter,
lock or similar device (other than security features specifically approved by OE LLC in the
specifications) that inhibits or in any way limits its ability to operate.
Even though I had done the research and I was quite sure that there would
be no impact from the local business tax, he was not willing to accept the
slightest risk.
Up to and after our in-person meeting, Alex gave lots of verbal and nonverbal signals that he wanted to hire me. At no-time did he mention he was
considering any other candidate for the position. Then, right at the time he
was supposed to send me a contract, he revealed that he wanted to consider
another candidate and take more time before making a formal offer.
It is possible that there really was a last-minute candidate, however the
sudden decision of considering another candidate felt like a breach of trust to
me.
I also think my discernment was somewhat influenced by the fact that Alex
Garland was introduced to me by a close friend of mine that I know for many
years and that I highly trust. I extended the trust I have for my friend to an
acquaintance of his without having any experience to back up this trust.
From my point of view, the main issue of this contract is the conflict I saw
between having a typical project manager scope of work defined in paragraph
1.a and being held responsible for potential issues that are typical of software
developers such as: infringements of intellectual property rights (paragraph
7.a.), undocumented features (7.b.) and conformance with laws (7.c.), when the
Project Manager is not directly responsible for code creation.
Explicitly through the scope of work paragraph, I was hired to execute tasks
typical of a Project Manager role; and this contract was holding me responsible
for the quality and the integrity of the code which are typical software
developers responsibilities without spelling these additional responsibilities in the
initial scope of work paragraph or reflecting the additional responsibility in the
hourly rate.
Take the time to write up, discuss with your potential employer and agree on an
explicit and detailed scope of work statement. That will force a discussion that
will clarify the employers expectations and give you a chance to accept or
refuse tasks that you are not comfortable with.
Conclusion.
Upon further reflection, it is clear to me that this prospective employer had no
desire to alter any part of the contract he had drawn up or relinquish the illusion of
control that contract was giving him. In the end, I am grateful that I did not enter
into a business relationship with Alex Garland, as I believe even if we had gotten
past the contract, something else would have arisen that could have created even
greater problems. Hopefully, the experience can help both you and I to be vigilant,
respectful and keep hold of your discernment to avoid such situations in the future.