Legal - Contract for building website

mfitzgeraldmfitzgerald subscriber Posts: 4
Hello,
I`ve been contracted to create a e-commerce website for a small company we are writhing the contracts and we are coming to a little problem.
We are trying to to put a section saying what would happen if i leave the company.
Important : i am not a associate i will not own shares
But i will be taking the website from A to Z and then managing it.
How does it work usually when u do that kind of work and then leave.
Note : we though about me getting 20 % of yearly sales for one year after i leave but it doesn`t seem to good to me
Ps : the guy who owns the business is my cousin so i trust him 99 % : )
I was thinking something like if i manage to get the website xxxxx amount of sales then gradually i get part of the business
Really all this is new to me so any advice is welcome, your experience and usually the way it`s done in business world.
Thank you.

Comments

  • patentandtrademarkpatentandtrademark subscriber Posts: 103
    what did your lawyer say?
  • mfitzgeraldmfitzgerald subscriber Posts: 4
    Hello,
    We havn`t submitted the contract to the lawyer we are trying to find solutions and agree on everything first.The lawyer will just legalize the document.What would you recommend ? 
  • vwebworldvwebworld subscriber Posts: 40
    The contract is a written confirmation of what you and the company agree upon.
    So, it`s a negotiation that starts with - what do you want? What does the company want?
    Then eventually reaching a common ground.
     
    Typically, a contract for creating and maintaining a website are fairly straight forward - the designer does this and gets paid $x, with what each party is responsible to provide, and a time frame for completion. This assumes the web designer is not an employee of the company for which the site is being created.
     
    If I were representing the company I would want to contract for the services provided, not give away a % of future sales... unless I do not have the $$ to pay the designer now. As I designer, I also would rather be paid for services rather than a % of future sales...because I have little control of sales. The website is only one factor that impacts sales (pricing, perceived product value, customer service, and terms are some others that you do not control, the company does).
     
    ~Roland
    vwebworld4/23/2009 8:04 AM
  • mfitzgeraldmfitzgerald subscriber Posts: 4
    Hello Roland,
    Thank you for your reply.The company is small so no money to pay me upfront for now we are sharing profit on sales generated from the website.I will be implementing and taking care of website, but also implementing and managing customer service and marketing, etc... So really what we want is to find a solution for me to get back from all the time i could put in the project if i ever leave. I will be associate with no shares so that is why it`s making hard to find something fare.Maybe some of you have experienced this situation before? Regards, Miles 
  • DavidJacksonDavidJackson subscriber Posts: 143 Silver Level Member
    The company is small so no money to pay me upfront for now we are sharing profit on sales generated from the website.
       There are no guarantees that the website will ever generate enough sales to compensate you for your time. Unless you can afford to continually invest time and effort into a hope and prayer scenario, I say walk away. David Jackson DavidJackson4/23/2009 9:41 AM
  • mfitzgeraldmfitzgerald subscriber Posts: 4
    Hello David,
    Well i`m a business school student so this project is a way for me to complete my final year internship and launch a web business without putting money from my pocket and business owner is my cousin. And i believe it will work just need to find a way to secure my work if i ever leave. Any suggestions. 
  • DavidJacksonDavidJackson subscriber Posts: 143 Silver Level Member
    I understand that this is all new to you. However, you`re making this a lot more complicated than it needs to be. When you get right down to it, it`s really quite simple. You and your cousin have to work out an arrangement that you`re both comfortable with. We can`t do that for you. You both need to get in a room with your attorney`s and hammer out an arrangement.
     
    If you are unable to reach an agreement, that may be a red flag for potential problems in the future. After all, if you can`t agree now before there`s any money coming in...
     
    Cousin or not, that`s something to think about.
     
    David Jackson
    DavidJackson4/23/2009 10:53 AM
  • mfitzgeraldmfitzgerald subscriber Posts: 4
    Well i really understand that part and that is why we are putting everything on paper.
    And we agree on everything but this point is more complicated because we have no experience on what is done out there normally.Before we talk to lawyer we want to have everything down since lawyer time = money Thanks for the heads up thought.Miles 
  • vwebworldvwebworld subscriber Posts: 40
    I`m not sure what is normally done in a situation like yours, but it seems it`s a matter of determining what you will be paid and how.
     
    So, break it down -

    What should you be paid? Between you two, come up with an amount for creation, for maintenance, and for other things you`re doing. List each task and an amount associated with each... and reach a mutual agreement as the the $$ amount for each.
     

    How will you be paid - this is a little more complex, because of the potential uncertainty of future sales or profits or cash. Also, how much of the sales margin can the business afford to pay?
     
    Now look at the amounts to be paid... for:
     

    On-going maintenance and support (customer service, etc) ideally, the business should be able to pay you out of current / on-going sales. If the business can not afford to pay for current services on an on-going basis - that might indicate the business plan in not viable.
     

    For design - you may have to be paid that over time. So, realistically, determine what the business can pay each week or month toward the design fee... that will give you an idea of how long it will take to get paid. Then you might increase the design fee amount to compensate you for a long pay-out period.
     
    There needs to be a realistic evaluation of the viability of the business, projection of sales and profits... I stress realistic.
     
    ~Roland
  • DavidJacksonDavidJackson subscriber Posts: 143 Silver Level Member
    We agree on everything but this point is more complicated because we have no experience on what is done out there normally.
     
     
     
    Miles, I still don`t think it`s all that complicated, if you have a good lawyer. A good lawyer can tell you what others have done in similar circumstances, and guide you in the right direction. While it may seem complicated to you, your situation is hardly unique.
     
    David Jackson
    DavidJackson4/23/2009 2:47 PM
  • mfitzgeraldmfitzgerald subscriber Posts: 4
    thank you all for your answers let me look into all that and maybe i will come back with more questions.
    Great help 
  • DavidJacksonDavidJackson subscriber Posts: 143 Silver Level Member
    Just a side note, something that has been said time and time again in life...friends and family should not become business partners. You`ll need to decide as the verdict is mixed but in my experiences, not a good idea. When family and friends are faced with a failed business, emotions tend to take over and relationships have a tendency to get ruined.
     
     
     
    I agree. In fact, I started a thread regarding this very topic. You can read it here.
     
    David Jackson
  • DavidJacksonDavidJackson subscriber Posts: 143 Silver Level Member
    I`d suggest reading David`s thread as well. There are some great examples of success but also some words of advice (David, I posted my thoughts on there as well).
     
     
     
    I read it and responded, thanks!
     
    David Jackson
     
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