3. Pay attention to the fine print
You’ll want to make sure you pay attention to the details when it comes to the contract. A few important questions to ask:
What happens if the project goes over budget? Is there a clause built into the contract so that if the project goes over budget(in general or by a certain percentage) the project is paused and approval is required for any further work? Will the vendor absorb any costs that exceed the originally agreed-upon budget or will they fall on your company to cover?
What happens if the timeline is extended? If the timeline is not flexible, you’ll want to ensure that you communicate this to the vendor and get clear on what happens if there are indications that the project won’t reach certain milestones on time.
Who owns intellectual property produced as a result of the project? When you work with a vendor to design software or develop documentation, do you have the right to use it over and over? Can you re-use it in another application? Does your vendor have the right to re-sell it to another customer? These are all questions you will want to ask early on. If there’s still some uncertainty, you can reach out to a lawyer (our friends at Goodlawyer have affordable rates for small businesses) to get clarification.
Are there laws and regulations from other jurisdictions that you need to follow when working with an out-of-province or out-of-country vendor? You’ll want to make sure you are compliant with any local laws and regulations when working with vendors that are not in the same jurisdiction as you.
What is the payment schedule? Do they require a deposit or a portion of payment upfront? Is there flexibility in what their payment schedule looks like?