Ask HN: Client wants contract enforcement in their state. Red flag? | Hacker News Reader

Ask HN: Client wants contract enforcement in their state. Red flag?

5 pointsgs77 comments

Hi guys,

I'm in the negotiation stages with a freelance client for a sizable job. I presented a contract to them in which one of the terms is that the agreement shall be interpreted and enforced in accordance with the laws of the State of California (my state). They asked me to make a few changes in the contract, one of them being changing the state where the agreement is enforced to Florida, which is the state where they are and their new company is incorporated. I'm not a lawyer and don't think it's worth paying one to figure this out (I'd rather walk away at this point). Do you think this is a red flag? Or is it customary to ask for this? Do I have to go to Florida if there's any sort of dispute?

Thanks!

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Personally, I've never regretted walking away from a deal I didn't feel good about and have regretted not walking away from several that I took...though I'll admit there is selection bias inherent.

My gut is that it's a red flag. Partly because your intuition is that it might be one and you're ready to walk away. Partly because moving the venue to Florida signals that the potential client (they're not an actual client until they write you a check) is more concerned with you enforcing the terms of the contract against them [a Florida venue is an impediment] versus a concern about having to enforce a contract against you [a Florida venue is an impediment]. To put it another way, a Florida venue hedges their non-payment over their enforcement. It's a bet that it's more likely they won't perform than you.

My experience is that people are able to live with not paying because they give warnings up front. That's why I like retainers. If a potential client balks over paying a retainer, then the odds are higher they will balk over paying an invoice. Anyway, there's only two reasons that a client would balk over paying a retainer: they don't trust me in which case I don't want them as a client; or they don't have the money in which case I don't want them as a client.

Good luck.

IANAL, but I wouldn't necessarily consider it a "red flag". They are more or less trying to put the burden on you by having to travel to, or obtain counsel in Florida, should there be an issue. In my experience it is not a common request, as most contracts state that the terms are interpreted based on the laws of the state the contractor is located in. This is more common because you otherwise you would have to have contracts written for every state or area you have customers in. I can't imagine that any of their service providers would agree to those terms. For example, if they agree to the terms with a hosting provider or email service, those companies are not going to change their terms if they are not located in Florida.

I would ask an attorney for their opinion. It's not worth the hassle though, and if this is an absolute sticking point for the client, it may end up being a red flag and time to walk away. A couple options you may have would be to agree to arbitration or mediation in lieu of court. Another option would be to require a "legal deposit" that would put an attorney in Florida on retainer for the length of the contract. The deposit would either be applied to a final invoice or refunded at the term of the contract. This would discourage them from doing something frivolous down the road hoping you won't travel to Florida to enforce the agreement.

Again though, I would talk with an attorney before proceeding.

I wouldn't walk away from the deal. They're just concerned you'll fail to deliver and also don't want extra hassles dealing with attorneys, just like you. And you're concerned about not being paid. Ask for a deposit, do a great job, and don't worry about it.

You're both in different states. Each of you want litigation/contracts resolved in your own states. One of you must budge. How's this a red flag?

You can politely say no and explain why. You have many clients and can't account for all the laws in each state, you'd rather deal with local laws you are familiar with and certainly abide by.

Furthermore, you can also show past works, references, etc. to support that point and convey that you like to stand by your word. Writing a contract where you're not fully familiar with the laws of the state means it makes it harder to deliver the work and experience you are known for.

When they say they want to amend the contract, what they are really saying is that they feel uncertain about certain things and feel there's a higher level of risk.

And at the very end of the day if they still insist on the changes, tell them you're willing to do that and explain to them that you will need to change the quote because of the extra legal fees.

Source: years of working with clients and making them happy

They may be doing it just because it's easier for them to get legal counsel in their own state. I wouldn't call it a red flag but they are definitely trying to tilt the balance on their side.

If you don't have the resources to get legal advice I would walk away. Not worth the trouble.

Although I've never been in a situation like you describe, this seems like sound advice:

> If you don't have the resources to get legal advice I would walk away

If there is no way that you could afford to get a consultation for, don't know, 100-300 USD range?, then how much are you willing to risk in case you sign the contract and something bad happens?

I would guess that just flying from Cali to Florida would trump those 100-300 attorney fee, even if it's just flying to sign some paper and end the issue.

Thank you all for your thoughtful responses! Considering the potential client has also asked for some other contract changes that would increase my liability to them, I've decided to stand firm and not give in to any of their contract change requests. We've been working on getting a deal together for 6 weeks now and I've found them quite inexperienced with technical matters so far. I think this translates into a lack of trust towards me, though I don't get the feeling there's any malice or ill-will behind it. So if they insist on their proposed changes to the contract, I will happily walk away. Thanks again for your thoughts!

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