

Tell HN: Major Business Lesson #2 - f1gm3nt

I'm pretty pissed off right now considering I just got screwed out of $550 by a frontend developer. I started a company earlier this year and it had taken by a few months to save up enough money to afford to pay someone to design a site for me. One of the goals of my business is to try to hire as much "talent" in the area as I can. I wanted to try to give people a chance to work of projects that they wouldn't normally get the chance to work on. After asking around and looking at various different developers and designers, I decided to go with one that seemed to know his stuff. I went ahead and hired him. (First lesson, NEVER LET THE PERSON YOU HIRE MAKE THE CONTRACT)<p>The project was a simple 30 hour project. It was suppose to take 7 to 10 "business days" as outlined within the contract. After almost a month and a half I had nothing. Once I asked why it was taking so long, he was quick to point out that the contract had a 30 "business day" window. I double checked the contract and found nothing.<p>Yes I read the contract and everything seemed fine to me. I did have him change a few things within the contact, but it apparently was not enough to make any big difference.<p>At the point he him quoting the contract and saying that I have not given him "any feedback" I told him that he has not sent me anything to give feedback on. We agreed to meetup at a later date to discuss the project. Soon after he sent the "final drafts" for approval. I called him out and asked why he was sending final drafts when there were already so many issues. After some more arguing I requested that my money be returned seeing as he breached the contract. He copy and pasted the termination clause in the contract and I copy and pasted the terms of the contract which he breached. Then I asked for my money to be returned.<p>I heard nothing from him until a few hours later when he CC'ed his lawyer onto the e-mail and said that he can't say anything until after he speaks with his "council". Pretty upset about this, I contacted my own lawyer. He told me exactly what I was expecting to. I do have a case, however to pursue the case would cost me more but I may be able to look into going to small claims court and try to get some of it back. He also suggested that I try to reach out to him one more time.<p>I sent the developer one more e-mail asking if there was anyway that things could get resolved. He sent a long e-mail more or less outlining that he assumed that me "asking why the site hasn't been completed" was grounds for extended the length of the contract. He also pointed out that he has the right to change the contract any time he wants. No where in the contract does it say he has the right to change the terms of the contract at any point.<p>After that little e-mail I called up the courthouse to ask how I would go about filing a lawsuit. They gave me all the info and asked he I was incorporated. I said, "yes", and the lady informed me that because I'm incorporated that I would need a lawyer present when I show up for court.<p>Seeing as it took me a few months to save up the $550 and that a lawyer would be a few grand. There's no way I could come out ahead and get my money back.<p>MAJOR LESSON #2: Hire a damn attorney to write you a contract. In the end it is well worth it and will save you time and money.<p>Another lesson I learned came from the lawyer. "If you're gonna screw someone keep it under $10K."
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RiderOfGiraffes
I feel your pain, and I sympathise. Having said that, I get a different lesson
from this.

Your relationship with your developer feels a lot like writing code without
ever actually testing anything as you go. It's like taking the spec, writing
all the code, then hoping that you get something that works at the end.

The lesson to take is that you need to check on progress far, far more often.
Somehow a "contract" needs to have measurable stages that you can sign off on
regularly, paying only when the work is done.

You probably felt that 7 to 10 days of work was small enough, but with nothing
to show after a week, you needed to chase it.

It's a tough lesson, and it's cost you $550, but you're right, it's going to
be better to write it off and take the lumps. I would suggest that the other
"lesson" isn't so clear. If you need a lawyer to write then contract then
you've already lost. You need a better relationship with your contractor, not
a more detailed "spec". When you write code you need to write, test, sign off,
and then write more. So it is when someone else is writing the code for you,
at least until you've got a working relationship built on mutual understanding
and trust.

ADDED IN EDIT: Some time ago I was looking to do a deal that was a 7 figure
sum (or so). All the people I dealt with fell into one of two camps: lots of
formal paperwork, or a handshake. Looking back on that deeply stressful time,
all the ones who wanted things spelled out in detail ended up to be a complete
waste of oxygen. All the people worth dealing with did it all on a handshake.

------
staunch
The lesson is probably that you're not good at hiring and working with
contractors yet. If you think the solution is better legal agreements you're
in for a very rough ride.

~~~
petervandijck
Totally agree with this.

I've found that with my best clients and contractors, the "contract" is very,
very short (a one pager, or an email perhaps). If you need more than that, you
are probably working with the wrong person.

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jsarch
There are a lot of good comments here and many with different take-away
messages. Speaking from experience from a similar situation, my own take-away
is a conglomeration of @mcargian, @jellicle, and @RiderOfGiraffes: $550 for 30
hours is a flag, and if you think a contract is going to ensure a quality and
timely delivery, you should probably focus on deliverables and milestones in
the contract with a 50% up-front, 50% on-delivery pay-out.

I certainly don't want to belittle $550, as it sounds like it took you a
significant amount of time to accrue, but there is a deeper lesson than simply
"hire an attorney".

Pro-tip: <http://news.ycombinator.com/item?id=1845648> followed by "... but
it's most important that you learn."

P.S. Best of luck and shoot me an email if you are looking for designers. I
happen to know several.

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variety
Well for one thing, $18.33 an hour is pretty bottom-barrel for qualified
front-end work. $35+ up is where the decent price range _begins_ for
reasonably skilled development work in any non-trivial category (which
definitely includes front-end).

So in a sense, you made a simple mistake (in aiming too low for a price
point), got an immature / low-integrity counterparty to deal with as a result
-- and so now you get to chalk this up as a learning experience, and the $550
as your "tuition."

And also, sometimes we just get burned, and all we can do is take our lumps
and move on. A $550 loss sucks (especially if this was a personal / pet
project) but it's not nearly as bad as other things that can happen to us.

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jellicle
Contracts do not solve problems. In a few cases they reduce problems because
the parties can clearly see what they agreed upon, but that's it. Picking the
right person and interacting well with them solves problems.

Having a 90-page ironclad 6-point-font contract will do absolutely nothing for
you with a $500 deal. Having the right person on the other end of the deal and
a handshake agreement will be just as good.

Look at it this way: even if you had a 90-page ironclad contract THIS TIME
AROUND, it still wouldn't be worth trying to enforce it in court. You would be
in the exact same situation you are now. The contract is not the problem, nor
is it the solution to the problem.

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mcargian
30 hours for $550? Not to belittle your situation, but this would have been a
red flag for me. Even in Tennessee I would expect the hourly rate for a
reliable developer or designer to be higher than this.

If it was a larger amount of money you should definitely tie payments to
milestones. When it is such a small amount like this it's hard to spend time
on a lawyer (or even your own time) for a detailed contract so, in this case,
communication is key. Even when things go sour.

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gallerytungsten
It sounds like you have learned a valuable lesson. I'm sure you'll do better
next time. In general, yes, you write the contract, and pay no more than half
up front. But before you get into all these contract details, the area to work
on is figuring out who is honest & competent; and who is not. Try to be sure
about that before you worry about contracts. Contracts only keep honest people
honest; they're not much good when someone is out to rip you off.

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donw
$550 would buy one day of work from a skilled developer, maybe a little more.

Somebody agreeing to work for a week on that kind of pay is either grossly
inexperienced (and doesn't know what to charge), or going to produce utter
shit.

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devmonk
I know it seems like a lot, but you are lucky it was only $550.

~~~
f1gm3nt
I agree. It will never happen again though. After speaking with the lawyer I'm
getting my own contract. It was also nice to know that I can put a clause in
the contract that says if I'm sued then if I win the case, the loser has to
pay for my lawyer. =D

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nck4222
Just to clarify, because you're incorporated you need a lawyer present even at
small claims court?

~~~
f1gm3nt
That's what the person that worked at the county clerks office told me. I
asked if I could represent the corporation and she said that I could not and
it must be a lawyer.

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andrewtbham
it sounds like you paid him up front... if so, that's probably a lesson as
well.

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rwhitman
You win some, you lose some, but you learn every time.

