A Brief Introduction About the Work for Hire Agreement
A Work for Hire Agreement is a legal contract that is created between an employer or organization when they need to hire a contractor for a short period of time. Both parties may be individuals or organizations. But one provides contracting services that the employing organization requires. This legal document outlines the project that the organization needs to be executed, the details of the expectations from the individual contractor and the funds that will be dispersed for the completion of the same. It is used to define work that is required to done on a standalone basis, or as part of a continuous project
Who Takes the Work for Hire Agreement? – People Involved
A Work for Hire Contract is created between two parties, the first who needs to hire external help for a short period of time and the second party being the contractor who is being hired for the completion of the project. Either party may be an individual or an organization.
Purpose of the Work for Hire Agreement – Why Do You Need It?
What is work for hire used for? Well, the main purpose of this agreement is to establish a legal understanding between both the organizations and to make sure that the interests of the individual parties along with the collective are protected at all points in time. This agreement is used to define the relationship between the parties in providing the services mentioned in the contract
Contents of the Work for Hire Agreement – Inclusions
A standard work for hire agreement template includes the following terms
- Details of the parties entering into the contract
- Nature of the services being provided
- The duration for which the contract would run
- Whether the service is one-off or part of a continuous provisions of services
- If it is continuous, then the frequency of service
- The compensation that would be provided for the service
- The responsibility for the tools and equipment that would be provided to the contractor
- Rights to access granted to the contractor for the work that needs to be done
- Access to the IP of the employer during the provision of the work
- Restrictions on the licensure for IP during the service provided
- Confidentiality clause
- Indemnification for any losses or damages caused to the employer
- Treatment of jointly generated proprietary and confidential information
- Responsibility for payment of insurance fees
- Responsibility for payment of other incidental costs
- Shared liability for damages caused to the employer’s property
- Amenities provided by the employer to the contractor or the contractor’s team
- Invoice raising and its schedule
- Security deposits and advances, and retention monies
- Representations and Warranties of both parties
- Governing law and jurisdiction
- Successors and assigns
- Severability of the contract
- Dispute resolution methods
How to Draft the Work for Hire Agreement?
Organize a meeting both the parties and discuss upon the terms and conditions of the agreement, such as the amount of time for which the contractor will be hired, the project milestones that need to be reached and the number of funds that will be invested for the same.
Once both the parties have mutually agreed to all the terms and conditions, reach out to a lawyer and ask him to draw up this agreement according to the specifications discussed.
When drafting an agreement, some points that need to be kept in mind are
- Whether the contractor is qualified and has the necessary experience
- The number of team members required for the job
- What rights should the employer grant to the contractor
- The time period during which the services should be provided
- What is the duration of the contract?
- How would the employer license the IP required for completing the work
- Who has the responsibility to provide the equipment required for the project
- What equipment should be obtained for the project
While negotiating the formation of an agreement it must be taken care that the individual interests of both parties must be addressed along with the collective cause. Negotiations would typically center around the price, equipment, number of people required, and the duration of the contract.
Benefits & Drawbacks of the Agreement
The most significant benefits of having the agreement are as follows.
The contract clearly outlines the individual responsibilities, duties and limitations and therefore makes sure that both parties are well aware of them at all points in time. This document acts as legal proof and thus can be produced in court if there is a need in the future.
In the absence of a Work for Hire Agreement, neither of the parties have legal proof of an understanding taking place between two entities and thus if the matter is ever brought to court, both parties stand to lose.
What Happens In Case of Violation?
In the case of violation of a Work for Hire Agreement, certain remedies come into effect and in a few cases the contract is dissolved and a new set of terms and conditions are agreed upon. In general, the dispute resolution methods(1) are described in the contract. If damages have been incurred by either party, then monetary damages can be recovered from the breaching party. Parties may negotiate for curing the breach caused. If arbitration doesn’t work out too, then they may approach a court of law that would grant them restitution or award damages.
This agreement is created with the intention of mitigating the risk of a dispute, hassles and any confusion that might arise in the future. Agreements like these highlight the scope of the duties and outlines the boundaries of operation.