A quick talk to share Comalatech's experience when dealing with the legal aspects of running a commercial plugin business:

  • Your license agreement
  • Taking or not taking Purchase Orders
  • Sneaky additional Terms and Conditions
  • Implications of accepting any Terms and Conditions
  • Insurance
  • No labels

7 Comments

  1. Samuel Le Berrigaud [Atlassian]

    Sounds interesting.

    You're based in Canada so am I right saying that this talk is mostly relevant to North Americans? I'm sure there is plenty of things for everyone. But some details might change for European based developers, right?

    1. Dan Hardiker

      I'd be more than happy to speak up about any differences that exist for European based plugin developers – there are also others from the EU who can do the same for their own state.

      As you're dealing with global companies the concepts still broadly apply (i.e. you'll still get large corp x trying to modify your T&Cs for their own benefit).

    2. Ryan Lee

      Yeah, I'm based in Canada, but a very big chunk of everybody's sales are to the US... as a matter of fact the bulk of what I have to share is about dealing with US firms...

      My perspective is from the Product point of view. Services has different implications.

      Like with all the Lighting talk the idea is to get the ball rolling for further discussion... just see bellow how we already got a Guy-dump (wink)

      1. Guy Fraser (Adaptavist)

        If it's primarily about USA clients, then you should certainly cover the joys of W-8BEN and W-9 forms. (smile)

  2. Guy Fraser (Adaptavist)

    EULA:

    We held firm on the following:

    • Jurisdiction – keep it the same as the country where your business is based, it has a big effect on insurance.
    • Indemnity – not worth the trouble.

    If customers weren't happy with those, we waved bye bye.

    If you broadly base your EULA on Atlassian's EULA (but checked by lawyer from your country) you should be generally fine.

    You will get most of the large enterprises trying to get you to change your EULA. On rare occasions their request will be valid, so do consider each one. But in the vast majority of cases just show them the door and they'll suddenly realise that your EULA is fine after all!

    Purchase Orders:

    You can't deposit a purchase order in to the bank. That's because it's not a legal form of tender.

    A purchase order is just a "commitment" from the client that they want to purchase something from you.

    Purchase Order != timely payment.

    We generally showed those customers, who wanted to "pay" with a Purchase Order, the way to the door. And they all suddenly realised that they could pay in advance after all!

    EDIT: Obviously for bespoke services (eg. consultancy) things are a bit different. But for plugins never accept a purchase order as if it was payment.

    Sneaky T&C's:

    Always read NDAs - many large customers will sneak "all your IPR are belong to us" clauses in them, an act that never ceases to piss me off.

    Insurance:

    Keep hunting round, it will save you £1000's. Just like car insurance, company insurance is designed to screw you. Get quotes from several suppliers. Insurance and loyalty are mutually exclusive concepts.

    You'll also get some customers, eg. public sector or large enterprises, asking you to have crazy insurance policies. They do this because they are used to suppliers doing £100k projects, not selling plugins. Go back to them and explain what your current insurance cover is and they'll always, in my experience, agree to make their terms match your existing policy. Never increase your insurance for a customer, even if they are paying megabucks for it - because insurance is a recurring liability.

    Accepting customer-provided contracts:

    If you do consultancy work, you'll have to do this. If you're just selling plugins, you should never do it.

    Regardless, if you find yourself compelled to sign a customer-provided contract, it needs legal review first. But keep notes of the problem areas, you need to be able to pre-filter obvious cruft from the contracts before sending off to an expensive lawyer. You also need to factor in those lawyer costs – you need to bill that plus markup to the customer.

    See it from their perspective:

    If you look at your own company overheads, now multiply that by many orders of magnitude, do the same with every risk you can imagine and you're still a long way off the place where big customers live.

    If they can get just a small percentage of their suppliers to reduce prices, indemnify software, change jurisdiction, etc., they'll save £millions. They are just doing what's right from their perspective. They're not out to screw you, they've merely boilerplated the way they engage with suppliers in a way that works best for them.

  3. Brendan Patterson

    A couple lawyer jokes seem relevant.

    NASA was interviewing professionals to be sent to Mars. Only one could go — and couldn’t return to Earth.

    The first applicant, an engineer, was asked how much he wanted to be paid for going. “A million dollars,” he answered, “because I want to donate it to M.I.T.”

    The next applicant, a doctor, was asked the same question. He asked for $2 million. “I want to give a million to my family,” he explained, “and leave the other million for the advancement of medical research.”

    The last applicant was a lawyer. When asked how much money he wanted, he whispered in the interviewer’s ear, “Three million dollars.”

    “Why so much more than the others?” asked the interviewer.

    The lawyer replied, “If you give me $3 million, I’ll give you $1 million, I’ll keep $1 million, and we’ll send the engineer to Mars.”

    1. Dan Hardiker

      You said a couple, but I count only 1 (wink)