7 tips on contracts in the IT industry

7 tips on contracts in the IT industry

I assume you are a beginner in the IT industry. Truth? You've successfully completed the recruitment process and you are about to start your first job. You only need to sign a contract ...

The contract is obviously not equal to the contract. There are those that are worth signing only when the total annual amount is at least $ 500,000, and there are those that should not be signed at all. We have prepared a few tips for you that will allow you to avoid many mistakes related to signing contracts. Are we starting?

First, read with understanding

This is the most important of these points.

I know such programmers or consultants who have been judging companies for years. They made one serious mistake - they signed the contract without even reading it.

I always read each contract several times. I always spend a minimum of a week analyzing the records. If I don't understand something, please explain. If something is imprecise, please specify in the contract. If I find that the contract is written in an unfavorable manner, I consult individual provisions with a lawyer.

Second, never rush

Remember the rule of unavailability.

Sometimes it happens that you get a contract and you have to sign it on the same day. But the less time you have to do this, the more likely you are to make a mistake. At worst, such a mistake could cost you millions of dollars.

My little advice: take your time. You must remember that you can turn this situation to your advantage. Remember that the longer you delay signing the contract, the more pressure is transferred to the potential employer. Also, remember that there is such a thing as an inaccessibility rule.

Note: The rule of inaccessibility refers to the principle that a person desires what is inaccessible or what is not enough. There is a tendency to desire what few or only one person can have. The rule is that the forbidden fruit tastes best. The rule of inaccessibility is one of the six rules of social influence distinguished by the psychologist Robert Cialdini.

Third, the subject of activity must be described in great detail

The worst possible entry is the provision of programming services.

It means that one day you can write PHP code, the second day you can write PHP code, the second day you can write native C code, the third day you can write native C code.

Fourth, contractual penalties

Contractual penalties are not standard nowadays. However, here, too, we have a distinction between sensible and senseless punishments.

A very sensible penalty is a breach of competition rules. None of us want our customers on the side to work with our employees. And this is perfectly normal in my opinion.

But there are also senseless penalties. For example, a code error penalty. Code errors happen, especially when we work in large teams and under time pressure. This is a normal situation.

Other examples of nonsensical penalties are: penalty for correcting someone else's mistake, penalty for delay in correcting a mistake, additional penalty for potential losses, compensatory penalties and many others.

Sometimes the penalties are several A4 pages. If your employer believes you have made a mistake, have them sued for civil lawsuits.

Additionally, remember that you can also punish your employer. For example, if he does not pay you on time, why not impose penalty interest and include the amount in the contract?

Fifth, the place of service

None of us want to work in North Korea.

This point is simple but often overlooked. The contract should specify the place where the services are to be provided. We often work for a specific client and our company is only an intermediary. The contract should include a list of customers and their locations to whom they can send you, so that you do not find out that you are in for an unexpected trip to North Korea.

Sixth, non-competition

A badly signed contract may mean that we will not be able to work in the IT industry for years.

In the IT industry, we also often do small projects after hours. I personally always want to be able to execute side orders or maintain systems that I have been keeping for years. If the non-competition clause is written in a wrong way, it may turn out that even after the termination of the contract, you cannot start another job.

You should read the prohibition of competition very well, so as not to wake up on the pavement one day and join the group of the homeless. When it comes to non-competition clauses, I always ask people who know the law better than I do.

Seventh, contracts are made for worse times

Of course, we all want our employer to always pay on time and keep his word.

Therefore, you must sign a contract. Consider a situation where the customer does not pay you money. Then you will go to court. Large companies can afford a court battle that will last for years. And you?

Always speculate and predict. Consider worst-case scenarios. Anything can happen here, and a well-signed contract will prevent court cases that last for years.


I believe these seven points are a good introduction to discussing developer contracts, but of course it is not the end of the story. I encourage you to comment on this thread and share your own insights. Mutual education can bring really good results.

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