Before engaging in a formal business relationship, system integrators and custom computer/software programmers need to protect their business interests with appropriate legal contracts.
During the initial stages of project development, IT professionals often keep informal records by hanging on to e-mails sent back and forth with the customer. While e-mail does provide a written record of correspondence between you and your client, it’s no substitute for a signed project agreement that clearly states the “who, what, when, where, how, why and how much” behind a project.
As part of a good project risk management strategy, it’s especially important to have a consulting contract or project agreement in place before any money changes hands.
A Good Project Agreement Is Good Project Risk Management
Whether your business is focused on systems integration or custom computer/software programming, having a signed project agreement before you begin an engagement will reduce or eliminate potential complications that could arise during a project. Most consulting contracts clearly spell out:
- Each party’s duties
- Written reports
- Termination rules
Solid project agreements or contracts are a critical first step in project management, as well as an important element in a project risk management plan to protect your business. Defining all project elements up-front and in writing could help prevent legal trouble later, keeping you from spending thousands of dollars in legal costs and countless hours in a courtroom.
A good project contract also helps to ensure that you receive the payment that you and your client have discussed. Too often, a project is well under way when a client suddenly decides not to pay, tries to lower the price of your work, or changes the terms. If any of these things happen and your client relationship is not governed by a contract, you could lose a lot of time and money, and your good relationship with your client could quickly turn sour.
Consulting Contracts for System Integrators
For systems integrators, a typical consulting services agreement identifies the work you are to perform and specifically defines the terms of your working agreement with the client. It sets the limits of your responsibilities to the client, as well as the terms for price and payment.
The agreement also protects your intellectual property rights and establishes confidentiality standards to protect both you and your client. It limits any losses for the work you perform and prohibits your client from hiring away your key employees. This type of project agreement also limits your liabilities in the event the client should suffer losses due to your errors or omissions.
Other, separate contracts that systems integrators may need include:
- Employment contracts
- Network installation and maintenance agreements
- Staffing and placement agreements
- Subcontractor or independent contractor agreements
The latter are particularly important because they govern the relationship between you and any subcontractors you may bring in on a project, clearly outlining who owns licenses and intellectual property. This type of agreement can also prohibit your subcontractor from taking your client’s business away from you, or from being hired away by the client.
Consulting Contracts for Computer Programmers
For computer/software programmers, a typical custom software development agreement is designed to govern the relationship between you and your client.
This type of project agreement generally limits warranties and guarantees related to your work, and caps your total liability to the client. Such contracts can also be used to prevent your client from hiring your employees away from your firm.
In addition to the custom software development agreement, computer/software programmers might need additional project contracts in certain situations, such as:
- Custom software maintenance and support agreement
- Employment contract
- Software customization agreement
- Subcontractor and independent contractor agreement
Time To Find a Lawyer?
If you’re in the early stages of project development and are worried that that you’ll need to hire a pricey lawyer to write up all the necessary legal documents, think again. Knowing that many small firms and sole proprietorships don’t have the financial resources to have high-quality legal agreements drafted for each engagement, TechInsurance launched ContractEdge, a company that specializes in affordable template project agreements just for IT professionals and other small business owners.
ContractEdge offers complete sets of project contract templates and samples for both system integrators and custom computer/software programmers, as well as for other IT solutions providers and other types of small businesses. Each agreement template can be customized and used again and again.
ContractEdge software guides you through a list of questions to automatically populate each template project contract, creating a solid first contract draft that will be valid in any state. If you think a contract needs further customization, ContractEdge recommends bringing in an attorney to review the initial draft – still a much more affordable alternative to having a lawyer write up your project contract from scratch.
Writtten by Brenna Lemieux - check her out at Google+ or Twitter