Independent contract work - need advice

[WD4]

An individual has approached me with a concept that they would like to mature, and have some backing from an investor. He is looking for help from an engineer (i.e, me) to help develop the concept into a viable prototype that could be field tested and patented. Should I choose to pursue it, this would be a part-time, "after-hours" gig for me... by I am not counting on this as my primary means of income.

As I have always worked as a full-time employee for large firms, I really not sure where to begin with regards to defining terms of payment and any contractual terms that should be included. I have received a lengthy non-disclosure agreement from the individual that I am reviewing.

Should I be asking for an hourly rate, a fixed price, some % of the future profits on the invention, other? Should I be using my current hourly rate at my primary job as a basis for charging on this new job? Are there any suggestions for clauses, etc that I should include in any contract that is created? Anything I should be looking out for in the NDA? Any other tips or tricks from those who engage in these type of arrangements previously?

Thanks in advance!

 

[GregLocock]

That rather depends on the jurisdiction you are in, how big a job it is, what your appetite for risk is, and what your full time employer thinks about it.



Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[WD4]

Initial impression is that it would be a fairly small job, maybe ~100 hours spread over a few months. I would be willing to take some risk on reduced up-front payment for a cut of future earnings (if they are willing to offer that option), but really have no idea how I would phrase that in a contract.

Opinion of full-time employer is a concern that I have and I'll need to try to resolve that with the black hole that is our HR dept.

 

[jpankask]

What is the individual willing to do in the form of payment? It doesn't do you a lot of good to draw up a contract with payment terms if he's not willing to pay you in that manner.

Be fully open with your current employer and get approval, in writing, from your company. Will you be using any company property (computer, software, plotter) for this? May be a sticking point with your employer. They will also want to ensure your daily work is not suffering for your night job...

 

[TheTick]

Hourly or weekly rate. Do not ovrextend your time horizon. As soon as this individual misses a payment, quit.

 

[ajack1]

Yep that should guarantee the project fails.

 

[TheTick]

Usually it's the inventor that guarantees the project will fail.

Failure to keep promises and make payments is just a milestone in the death spiral. Don't get ahead any further than you are comfortable losing.

 

[TheTick]

p.s. If you're designing cabinet hangers or an espresso press, get your money up front.

 

[JLSeagull]

Assure that you avoid ethical problems. If you are employeed as a direct hire (salaried exempt) employee, consider disclosing such part-time activities and obtaining your managers blessing to avoid ethical issues. The support cannot be for a potential competitor without crossing a line that can cause long-term grief.

 

[MiketheEngineer]

I have done both - got some money up-front for a cut in the future - like so many dollars per unit sold. Worked OK.

Some states REQUIRE that you notify your current employer of your activities... and your employer may fear some competitve issues abound.

Are you putting your PE stamp on this??

Good luck - but bottom line - I would try to work something out.... You will learn a lot and might even get rich.. But don't hold your breath!!!

 

[KENAT]

Take a look at: Starting & running an engineering business

http://www.eng-tips.com/threadcategory.cfm?lev2=89

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

http://eng-tips.com/market.cfm?

 

[WD4]

Thanks for the tips everyone. Looks like I'll be expending more energy figuring out the legalities & such then I will with the actual engineering task. Sigh.

 

[GregLamberson]

It all comes down to what is your time worth and how much are you willing to do it for. Whether it is acceptable to the "employer" is a separate issue. Determine what it is worth for you to do the work and give it to him. If he accepts, both are happy. If not, nothing lost.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[stanier]

The chance to get out of the rat race rarely comes along. Is this venture of the type that will set you up for life or just some beer money?

If the former go for it. 100 hours isnt worth claiming from the person. If you dont accept payment but a future share of the action if successful then your risk may be reduced. ie no contract for the advice.

If 100 hours is all you will see, go see your boss for a raise or change jobs and forget the whole messy business.