Things to consider when engaging a Contractor

Things to consider when engaging a Contractor

It’s whoever creates the intellectual property, as a general rule, is the one, the person, the entity that owns it, regardless of whether you’ve paid them or not.

It’s really important to make sure you’ve got adequate provisions in your contract when engaging a contractor, including intellectual property.

And I’ll say this; it’ll make sense to you in one sentence.

It’s whoever creates the intellectual property, as a general rule, is the one, the person, the entity that owns it, regardless of whether you’ve paid them or not.

Apart from employees where there’s a statutory, the rule at law is that if you have employees, then ordinarily any intellectual property that they create is the business’s.

But when you’ve got third parties, contractors, if they’re creating any intellectual property for you whatsoever, could be logos, could be content, could be designs, anything at all that they create, code for the website etc., your website buildup, your graphic designer, your content creator.

Anyone who is a third party and not an employee of the business actually owns the intellectual property because they’re the ones that created it, unless they assign it over to you. So, unless there are provisions in the contract which specifically assigns that intellectual property to the business and says, yes, the business is paying for this, but also anything that they create during the relationship is actually owned by the business.

Unless that exists, and, in most cases, unfortunately, with contractors that submit their contracts to a business, usually this will be left silent, and probably for suspicious reasons, that they can hold onto the intellectual property until they’re fully paid.

And then if they’re then fully paid and the business needs to demonstrate that they own the intellectual property, then they can potentially even get more money out of the business by saying, oh, we can assign it over to you for a fee.

Unfortunately, we see this a lot in businesses.

Key Takeaways: Engaging A Contractor

So, before you even get into that contractual relationship, before you start work with them, make sure you come to us and we can just make sure that the business has the adequate provisions in place to make sure that they own the intellectual property that these third-party contractors create.

That’s just in relation to the intellectual property.

Obviously, there’s a whole bunch of other things that you need to consider when engaging with third parties, which we can obviously advise you on as well.

I hope that helps today.

It’s a really common misunderstanding in the market, that just because you pay someone for doing something, that you own what they build.

Hope that helps and looking forward to helping you.

Contact us today if you require any assistance with engaging a contractor.

(c) Progressive Legal Pty Ltd – All legal rights reserved (2019)

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