Defensive Design for the Web: How To Improve Error Messages, Help, Forms, and Other Crisis Points
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We recently won our biggest job of the year (money-wise). However, during the contract negotiations (in which they required us to use their contract), we ran into a snag regarding when ownership rights to the work would be transferred from us to them. They say that they own the rights to the work even before they pay for it and we say they have to pay for the work in full before they own it. Our view is that it’s like a car loan or a home mortgage — the bank still owns the title to the property until you’re all paid up. We think that’s fair and reasonable.
Their language read:
Except as provided below, all tangible and intangible material and work product delivered under the Statement of Work and any additional statements of work that become part of this Agreement (including any source code and object code) (collectively, the “Deliverables”) will become the property of Company… Consultant hereby grants Company, a royalty-free, irrevocable, fully paid up, worldwide, non-exclusive, sublicensable right and license to use, reproduce, publish and modify any Consultant Property contained in any Deliverable.
Our terms read:
Prior to payment of all amounts due under this Agreement, Developer shall solely and exclusively own any and all rights materials designed, developed, created, and/or completed by Developer for Client under this Agreement… Upon payment of all amounts due under this Agreement, Client solely and exclusively owns any and all deliverables developed by Developer for Client pursuant to this Agreement.
That was the sticking point. They said no. We said no. Their corporate legal team wouldn’t budge. Finally, after some hardball, they came back with this revision:
Rights to the work are not transferred until payment is received, except for amounts disputed in good faith.
That was basically the last straw for me. What does “except for amounts disputed in good faith” mean? And what’s so unreasonable about this clear and reasonable concept: You don’t own it until it’s all paid up. Period. And, if you really want to own it immediately, you can always pay the full amount up front.
So, even though this was a sizable amount of money, I respectfully turned it down. Here is a copy of the email I sent (names removed). Note that there are some additional details in this letter that were not discussed in the message above, but also played a part in turning down the work:
Given everything that’s transpired, the only language we can accept is “Rights are not transfered until payment is made in full.”
And, frankly, I’m starting to wonder if COMPANY is the type of company we want to do work for. We completely enjoyed working with you on the original redesign. Just loved it. But, the new corporate mentality — especially from legal — it has me questioning if this is a good fit for us.
We feel taken advantage of (we have to use your contract even though we’re doing the work, we have to abide by your payment terms even though we’re the ones submitting the invoices, we have to abide by your promotion restrictions even though you wouldn’t have found us originally if all our other clients also prevented us from using their name in our client list, etc).
We’ve always stood for fairness — and we demand this from our clients as well. It’s nothing personal, but I’m not feeling good about this and think we’re going to have to turn down this project at this time. It’s a big project to walk away from, but we have to stand up for what we believe in. I’m sorry.
I felt we had to take a stand. We had to do what was right — not what was easy (it would be easy to take the money and agree to the unreasonable terms). Our work should remain our work until a client pays for it. Period. If firms like us give in then terms like these will become an accepted part of the landscape. We shouldn’t allow ourselves to be pushed around and made to agree to unreasonable demands. And that’s why I said no.