

Ask HN: Freelancers, do you find the Elance services agreement reasonable? - shock

I was just reading the Elance services agreement [1] when I came upon this paragraph:<p>9.Indemnification
Contractor will defend, indemnify, and hold harmless Client against any damage, cost, loss or expense arising from a claim, suit or proceeding brought against Client (i) alleging that any Work Product infringes upon any Intellectual Property Rights, (ii) alleging that any Work Product misappropriates any trade secrets, of any third party, or (iii) arising from Contractor&#x27;s breach of the terms of this Agreement.<p>I find this highly worrisome because my understanding of it is that if a client I did work for is sued for IP infringement, even if no IP infringement occurs, I need to pay for the client&#x27;s defense. This is just one example of many possible scenarios under the terms above.<p>I.e. if I did mobile apps and a client of mine got harassed by a patent troll and the client wanted to settle, I would have to pay the settlement on behalf of the client.<p>Do you find this risk worthwhile? Why do you accept it? Do you charge more, to be able to mitigate this risk?<p>[1] https:&#x2F;&#x2F;www.elance.com&#x2F;p&#x2F;legal&#x2F;independent-contractor-services-agreement.pdf
======
davismwfl
First, cause of sue happy people: I am not a lawyer and nothing I am saying
should be considered legal advice, just my experience.

You will find almost every professional organization will have similar clauses
in their contracts. Specifically it is addressing "Work Product" which is what
you are producing for the client. So yes, if they are sued over something you
deliver because you snagged images off the web and didn't pay for them, or you
used someones IP without a proper license then yea they can hold you liable
and make you pay some of their expenses. In general, a corporation isn't going
to trust you to fight on its behalf, so this is more about you being a witness
and paying expenses and damages if you infringed.

And you are right, you could do everything right and someone comes along and
sues your client. That is why professional liability insurance etc is a must
anymore. Not that it is a fix for this, but in the off chance, at least you
have some protection from financial ruin. And in general, I always deliver to
the client any licenses I purchased on their behalf (or a resale license), as
well as details on any third party software or designs I used. And even before
I use any 3rd party code, images etc that requires a license I always make
sure the client signs off on it if it is core to some piece of functionality.
This way they are aware during development and at time of delivery of what I
used and why. This doesn't mean they can't make you hold them harmless, but it
sure does help if you ever had to go to mediation or court.

~~~
shock
I understand the need for indemnification, however the scope of elance's terms
seems too broad (it covers even alleged infringement) -- which I, personally,
find questionable.

Do you have other freelancing sites to recommend, with, perhaps, more
reasonable terms?

Where did you purchase your professional liability insurance? How expensive is
it?

~~~
davismwfl
We don't use any of the freelancing sites, not because of their terms but it
is mostly a race to the bottom. So instead, we rely on networking etc.
Probably stuff you have heard.

And yea, I agree their statement seems overly broad and very one sided, which
may make it tough to enforce. Usually these are handled as mutual agreements,
and at least in my case I have a not to exceed the cost of the work clause
etc. Again, I am not a lawyer though so, just my opinion.

As for liability insurance you can get it at most reputable insurance agents.
There is also techinsurance.com which can hook you up with good insurers, at
least in the US, not sure about anywhere else. I personally have a top insurer
and it isn't all that expensive. For General Liability and "E&O" (errors and
omissions) its around $1k/year for a significant amount of coverage. I have
heard of people (never myself) paying as little as $400/yr for $1M of
protection, from my experience it all depends on your situation: e.g. are you
incorporated, do you have employees, how long have you been doing the job,
have you had any claims of negligence against you etc.

Hope that helps some.

~~~
shock
Yes it helps. Thank you.

"[...] and at least in my case I have a not to exceed the cost of the work
clause etc.".

Now, that makes sense. It would have massively changed my opinion of the
elance terms if they would have included that as it would decrease the risk of
personal bankruptcy by a mile.

~~~
davismwfl
Cool, glad I could help any bit. And I agree totally on the limitation, its
something I demand if they try and take it out. But its really rare for them
to try since its pretty common.

