Necessary Contracts to On-board a Developer

There are many necessary steps that happen between finding a developer and when development begins. Among those steps are signing contracts to on-board a developer that defines the entire relationship between the two parties. Whether you are hiring an employee or a freelancer, it is important to consider the things below.

Payment structure

The first thing that should be discussed is the details about payments. Not only how much will the developer be getting paid, but consider how to structure those payments.

If you’re project can be completed quickly, it might be best to pay the developer in full upon completion. If you have an ongoing project, then consider utilizing milestone payments. Break up the project into actionable chunks, and then pay an appropriate portion based on the difficulty of the milestone. It’s important to have an open conversation about these milestone payments with your developer before asking them to sign something. Finally, if you’re adding a developer on to your team full-time, then it makes the most sense to pay them a steady salary.

IP Ownership

Now that payments have been properly discussed, it’s time to determine who will own the intellectual property. This is very important! Don’t get caught with your pants down, when you eventually find out you don’t own the technology your company is built upon.

In most cases it’s beneficial and necessary to state that the company owns all work and property associated with the work. However, it is not uncommon to allow a developer to own the IP of a small one off project (i.e. an automation script). Not advised, but if your company can survive with others outside owning the same IP, you can allow the developer, along with the company, to own the IP.

[Note] It is always encouraged to allow the developer to showcase their work. While they may not have rights to commercially use the IP, allow them to show off their work in their portfolio.

Project Requirements Document

One of the most important things to discuss with the developer is the scope of the project. This includes what they will be working on, the necessary features, and all of the details of how it should be built. This should all be outlined in a project requirements document.

This contract is the necessary handshake to ensure that the developer can and will build your project how you see fit.

NDA

We believe ideas should be shared in order to get feedback. Using an NDA is fine, but you are really just limiting the amount of valuable feedback you can receive.

Some of these may be separate contracts, while others can be part of an overall contract (i.e. employee contract). There are many other things to consider when on-boarding a developer, but having a clear legal relationship is important. Check upcounsel for free legal documents. As always, don’t hesitate to reach out to the VentureStorm team for help!

Originally published at blog.venturestorm.com on January 23, 2017.