I'm in a quandary and would like to beg your opinions. I'm writing this as the unknown one, as well as using the very generic "they" and "them", to protect the innocent.

I've hired a friend to write a series of modules for us as a "work for hire" project, with which we would build other programs on. It was not to be a standalone program and required my programming to make usable for public consumption.

Time is always an issue for me and I (and his peers) respect their architectural skills, so I contacted my friend (who was available and in need of work) about cost. I had some extra money in the bank, wanted to help out a friend in addition to kickstarting me into writing this program I've been planning for ages. The program I've been planning will use the modules being written by my friend. A few thousand dollars for a "work for hire" program was verbally agreed upon. We specifically expressed many times that my company wanted only "work for hire" so there wouldn't be any issues with ownership. They verbally agreed each time.

The concept of the modules is, from my extensive research on cpan, sourceforge, and a variety of other locales, unique and wholly mine.

For reasons that seemed logical at the time, they've convinced me to use a program that they've written previously as a foundation of the program, which committed us to a gross 15% royalty on everything we sell (on our total gross sales price, not just their portion of the program) Hesitantly, we agreed. We valued their experience and skills enough, and wanted our friend to succeed as much as we want to succeed ourselves to agree to that 15%.

We've paid them a 30% deposit (US$1k) as a deposit for the modules, based on our conversations, which included the "work for hire" clause (they seem too fond of conference calls over writing to my tastes, so we have little in writing). The "work for hire" to us, and the world around us, usually means that full ownership is tranferred to the purchaser (us) upon satisfactory completion of the project (they write it, we're happy, we pay the balance).

Now, after half of the development is completed, they see the extreme usefullness of the modules and want to have the ability to sell it to their own clients as well as as incorporate it into the program that they've written as well as have us continue to pay the 15% royalty (on gross) for their other program.

My problem (and yes, I've flagellated my real username too many times to count already, and will probably continue to do so) is that we didn't do a written contract. Apparently, the written contract is required to be considered an official "work for hire" project. We didn't have the concern, time or resources to find/hire a lawyer specializing in technology to write up the contract, and we (rather, I -- my partner is not pleased with me to do this based solely on a friendship with the programmer in question) skipped that process.

So now my friend has $1k of our money and will undoubtedly want the rest in addition to the abilility to resell the product we've paid for them to write exclusively for us iun addition to us paying a 15% gross sale price royalty for each of the products we sell. I don't feel at all comfortable in funding a project based on my brainchild that they can turn around and resell.

I know I did this entirely the wrong way. I shouldn't have done this without a contract just because it was a friend, and I especially shouldn't have provided a deposit based on our verbal discussions which agreed to "work for hire" (which implies that we own the product).

Personally, I think that my idea is good enough that other people would see great use in it as well, but is it up to the contracted programmer to determine what he'd like to use at another time in the middle of a contract? And if he refunds my deposit and uses my idea, well, that's an affront, too. And if we decide to keep it a work for hire, then will I get the best product that he can produce so he can keep the best to himself? Man, this really stinks. I wish I had a contract, and I wish my friend were ethical enough to keep his verbal contract. Requesting a change in terms in the middle of a contracted project (especially after receiving a sizeable deposit) just seems like bad business practice to me.

So my question is... if you were dumb enough to do what I did... what would you do?

Humbly,
S/He who will remain anonymous

In reply to Work for Hire Project - Opinions Requested by Anonymous Monk

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