Second of three parts
Q: How can I prevent misunderstandings when implementing a contract with an independent contractor?
A: An independent contractor (IC) is one who agrees with a buyer to provide goods or services for pay in a nonemployment (also known as freelance) relationship. Challenges in implementing a contract occur when there are disagreements over terms and performance by both sides. Examples include late or nonconforming performance, delayed or less than full payment, misunderstandings regarding one side's expectations or contract terms, or when multiple people from the buyer of an IC's services give conflicting directions to the contractor.
Foreseeability lies at the root of disagreements in the implementation of a contract. When utilized as a way of looking ahead to where a contract could encounter a problem, foreseeability can serve all stakeholders well.
For example, a service business owned nine vehicles and six went in for maintenance to an IC shop. The IC stated in its bid specifics regarding what would be repaired on each vehicle, the price for parts and labor and the completion date. The work was completed on time and the buyer found it acceptable. The repair shop as the purchaser of the tires was able to redeem a $300 rebate offered from the tire supplier, which it kept. The buyer found out about the rebate and wanted that money, claiming it was the purchaser having paid for the tires. The repair shop responded the rebate had neither been promised nor agreed to in the contract, and it was used as credit factored into its bid to reach the attractive price that the buyer liked when shopping for bids to repair the vehicles. Nothing in the document comprising the contract addressed anything about rebates. The business declined going any further on pursuing a claim and walked away annoyed.
Ideally foreseeing the possibility of a rebate when purchasing tires could have been brought up by either side during the negotiation of this contract, and arguably the "buyer beware" saying applies. Research as to possible collateral benefits on this or any IC agreement could possibly have avoided the disagreement.
John Del Vecchio has been operating a general practice, solo law office since 1988 and is on faculty at the University of St. Thomas Opus College of Business.