Re: [PLUG] intellectual property, code, employment laws, etc

["William H. Magill" <magill@mcgillsociety.org>]

Without a doubt, one of the nastier pieces of legal "boilerplate" I 
have seen in quite a while.

On Saturday, January 4, 2003, at 01:27 AM, mike.h wrote:
> , the Sub-Contractor shall be paid as compensation for services thirty 
> days
> following Contractor’s receipt of invoice (2/10 net 30).
....
> The fees for the services provided are to be outlined in a Task Order.

I love these two provisions -- you think you will receive a fixed fee 
for a service. But you discover that they can pay less than that if 
they want... This means that you can't include the discount in your 
pricing because it has already been "negotiated" out. 2/10 net 30 is 
seriously out of place in such a contract. It's a manufacturer's volume 
discount game and has no place where pre-defined or pre-negotiated fees 
exist. A more correct invoicing  scheme is simply a 2-5% penalty for 
payments RECEIVED after 30 days.

> Section 14. Remedies.  The parties agree to the reasonableness of the
> restrictions in the covenants set forth in Sections 4, 5, 6 and 7 
> above and
> acknowledge that they have been negotiated at arms-lengths, and they 
> agree
> that such restrictions shall be legally enforceable and shall not be
> challenged by the Sub-Contractor in any court proceeding.

This reminds me of the old "Confession of Judgement" clause that was 
ruled illegal in Pennsylvania "standard form leases." I especially love 
the phrase "negotiated at arms-lengths." It would be interesting to 
find out what if any option you had to change anything in the 
boiler-plate. Such things are normally "sign or walk" entities; no 
negotiations are accepted. Or put another way, you can ask for all the 
changes you want, but they will be simply refused, usually "because the 
lawyers won't let us change them."

> Section 17. Independent Contractor.  The Sub-Contractor shall be 
> deemed for
> all purposes to be an independent contractor and not an employee and 
> shall
> not participate in any employee benefit program of the Contractor by 
> reason
> of this Agreement or the relationship between the parties created by 
> this
> Agreement. . . .

Here we get to the meat of the contract... and really its only reason 
for existance -- the avoidance of responsibility in an employer/empoyee 
relationship.

Another contradiction I love....Section 16
> (b) No Third party Sub-Contractor may be used by the Sub-Contractor 
> without
> prior written approval from the Contractor.
. . .
Section 17
>  The Sub-Contractor will retain sole
> and absolute discretion and judgment in the manner and means of 
> carrying out
> Sub-Contractor's activities and responsibilities hereunder.

Section 16 guarantees that the "sub contractor" does not have sole and 
absolute discretion, and that even though the contractor is violating 
the law, further in section 17, the sub-contractor agrees to pay for 
the criminal defense costs of the contractor when the IRS comes calling.

A very evil contract for sub-contracting indeed!

T.T.F.N.
William H. Magill
magill@mcgillsociety.org
magill@acm.org
magill@mac.com


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