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I am intending to work as an independent contractor, writing software for a client based in another country. My work will be provided electronically so I won't need to relocate. However, there is a legal dilemma, as I see it:

  1. If the draft contract stipulates that governing law is the law of the country where the client is based, I will find it very difficult to find a lawyer willing to review the contract. (This has been my experience.)
  2. If the draft contract stipulates that governing law is the law of my country, the client will face the same problem: they will find it very difficult to find a lawyer willing to review the contract. Right?
  3. There is no realistic third option. The contract has to stipulate a choice of law - anything else would be ridiculous.

Let me go into more detail on why option 1 is difficult:

  • Lawyers in my country, who know only my country's law, will simply throw up their hands and say "Can't help you - unless you get the stipulated law changed".

  • Expatriate lawyers from the client's country, working in this country, even if they are from the right state or province, will probably be too busy working for corporate clients to be interested in my (from their perspective) petty little contract review.

  • So, it looks like my only option remaining is... hire a lawyer based in the client's country? And interact with them by phone/VOIP, email and fax? Is this possible? Will it even be legal for them to take on me as a client? How can I get a recommendation?

Is there anything I'm missing?

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It occurs to me that something similar to this must frequently occur with contracting work across state lines in the US. (I'm assuming this, because I don't live in the US so I don't actually know how it works in practice.) "I'm not licensed to practice in California, you'll have to hire someone who is". Same problem, but with state lines instead of national borders. –  Robin Green May 31 '11 at 19:45
    
Interesting factoid from Wikipedia: "In some countries, the negotiating and drafting of contracts is considered to be similar to the provision of legal advice, so that it is subject to the licensing requirement explained above.[51] In others, jurists or notaries may negotiate or draft contracts" –  Robin Green May 31 '11 at 20:07
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2 Answers

I don't have a good answer for you because I don't think there is one. What I can do is share a couple of Rules of Thumb I used when I had my own software company back in the 80's and 90's.

  1. Never do business with someone (or some company) that you wouldn't do business with without a contract. If your gut says they are untrustworthy, trust your gut.
  2. But you still need to get get some sort of contract in place. Even if it's not perfect, it will still help clarify the expectations of each party.
  3. If the other party is bigger/wealthier than you are, then having enough money to survive all the way through a lawsuit will be a huge risk for you, regardless of how well-drawn the contract was. See rule #1.
  4. There are an infinite number of deals, not all of them good. Know what you want/need out of the business relationship, and then state that clearly and in plain English (or whatever) to the other party. Get them to do the same. I once had contract negotiations with Siemens stall for 18 months because of a mutual misunderstanding of US vs. German liability law. Fifteen minutes with a really knowledgeable attorney (Fred Greguras, then of Fenwick & West) cleared up the misunderstanding and they went on to become one of my most important customers.
  5. Finally, keep your billables up to date. Don't let things get to the point where they owe you for months and months of work. If they are a little late, give them a polite-but-firm reminder about this section of the contract. If they slip a little more, tell them you are invoking clause 12 (or whatever) of the contract and then simply suspend work until they correct the matter. Don't take any excuses for why they can't pay their bills.
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I particularly like #1. I'd rather stay out of lawsuits. I'd really rather stay out of international ones. –  David Thornley May 31 '11 at 20:31
    
@David: Agreed. I was only involved in one and it was a Royal PITA. Even though we knew we were in the right, my attorney explained both how poorly written the contract had been (my fault) and the cost to defend. He said we could either pay for his kid for one year at a very good secondary school, or we could settle and get on with our lives. We settled, but I can still taste the bile 30 years later. –  Peter Rowell Jun 1 '11 at 1:37
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Not strictly the legal answer BUT the position for most independent contractor is-- They can afford lawyer(s) and you cannot.

So unless you are prepared to represent yourself and/or risk personal bankruptcy you are going to lose any legal battle.

Conversely if you set up a limited company and make sure any contract is between your client and your company they have nothing to gain by suing you.

The fact that there are two jurisdictions involved does not really change the situation.

In any case it would be professional suicide to take your client or employer to court unless the circumstances were really really extreme.

So don't worry about it. Perform your work as best you can, and, down tools the minute the bills are not paid.

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+1 for "They can afford lawyer(s) and you cannot." –  John R. Strohm Sep 6 '13 at 13:04
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