Entrepreneurs like to work together “in good faith.” In other words, agreements are made verbally and the parties immediately start working together. That’s great, after all we want to get to work quickly and deal with legal matters as little as possible. However, it only has to go wrong once and regrets surface. If only I had put that in writing in a commission contract with the contractor / client.
So too with the commission contract. Our advice to entrepreneurs is therefore: good faith is nice, but well organized is better! Discuss the conditions with each other and have them put on paper by a lawyer. An important message here is that a commission contract does not have to be pages long. You put the basic agreements on paper (can also be done by e-mail) and the law will fill in the rest.
In this article, we would like to provide some points that can be covered in the assignment agreement.
Duration and termination of assignment agreement
An important agreement that you should lay down is the duration of the contract. Will a specific assignment be completed or will the parties continue to work together for a longer period of time? This information is important, not only for the future perspective, but also for the possibilities of terminating the assignment.
For example, a contractor may, in principle, only terminate the open-ended contract and the fixed-term contract may only be terminated for important reasons. A client may cancel the assignment contract (indefinite and definite term), unless it concerns a professional client and deviating arrangements have been made. For example, the parties can agree that both parties can cancel the contract (possibly under certain conditions) with due regard for a notice period.
Compensation contractor
Of course, as a professional contractor, you also want to be paid. It is therefore wise to agree on that remuneration in writing. Are you going to work on the basis of an hourly rate, a piece rate or a fixed amount for the assignment. Also think about the expenses. Are they included in the fee or will they be for the account of the client or contractor.
If you do not agree on a fee, the contractor can still claim a reasonable fee. Of course, this is not a desirable situation and it is wise to put the agreed remuneration in writing.
Intellectual Property Contractor
As a contractor and client, you will have to deal with intellectual property rights. The main rule is that the creator (the one who delivers a creative performance) is the owner of the intellectual property rights, even if the client has commissioned the creation of a text, design or invention. It is possible to deviate from this main rule. After all, the client wants to use the intellectual property. So agree for what purpose the client may use the work delivered (user license) or arrange a transfer of copyright.
Please note that if the performance was created under the direction and supervision of the principal, then the copyright could lie with the principal. This depends on the instructions given and the freedom the contractor had.
Non-competition and relationship clause in assignment contract
We are all familiar with non-competition and non-solicitation clauses from employment contracts, but they can also be used in assignment contracts. Case law provides a similar test for assessing the legal validity of a non-competition clause. A non-competition clause is not automatically valid. It must be in writing and may not violate the fundamental right of free choice of employment (Article 19 of the Constitution). This may be the case if the duration of the clause is unnecessarily long or otherwise too broadly formulated.
The rule for the contractor is therefore: do not just sign a non-competition clause. And for the employer the following applies: a non-competition clause may be used to protect the business interests, but do not formulate the clause too broadly so that it does not infringe on the contractor’s freedom to choose his work.
Need help drafting assignment agreement?
We would be happy to help you draw up a contract of assignment so that you can focus on your business. Would you like more information or a free consultation about the possibilities? Please contact Lisa Kloot of LVH Advocaten. She can tell you everything about working relationships, such as the commission contract.
