Different Deliverables on a Fixed Rated vs a ...

florydev · ‎11-04-2019

On another topic it was stated by one poster that:

If this was an hourly contract, then all files you produce while working on the project (billing time to the client) would belong to the client. So you WOULD need to provide those files to the client.

But because this is a fixed-price contract, then you only "need" to provide the deliverables specified in the original agreement.

Then it was further stated that:

Fixed-price contracts are contracts to provide specified delivables.

I have not read this anywhere, I have not seen it stated anywhere, on the surface it does not make sense to me that there would be a difference in what is delivered in the two scenarios. I am more than happy to be wrong, I just want to understand that if I am wrong, why I am wrong.

prestonhunter · ‎11-04-2019

Upwork has numerous help documents that discuss fixed-price contracts, including this one:

Milestones for Fixed-Price Jobs Screen Shot 2019-11-04 at 8.48.14 AM.png

And this one:

Fixed Price vs. Hourly: Which Pricing Structure is Right for Your Freelance Project?

Fixed-price contracts are about deliverables and specific tasks.

Hourly contracts are about time spend working on the project.

florydev · ‎11-04-2019

Preston,

Let me give you a specific example. If I write a program in C for a client that changes all the words foo to bar in a text file and I deliver an executable that works on the clients operating system of choice, are you saying in a fixed priced contract I do not have to deliver source code?

prestonhunter · ‎11-04-2019

re: "Let me give you a specific example. If I write a program in C for a client that changes all the words foo to bar in a text file and I deliver an executable that works on the clients operating system of choice, are you saying in a fixed priced contract I do not have to deliver source code?"

A fixed-price contract is about providing specific deliverables.

In such a situation, the deliverable for the contract would be stated:

a) "The freelancer will create a function in C that can change all of the words foo to bar in a text file."

[or]

b) "I have a large text file (50 MB) in which I need all of the words foo to be changed to bar. The freelancer will create a function and program in C that accomplishes this task and provide the altered file to me."

In contract (a), the freelancer would need to provide the source code, but no text files.

In contract (b), the freelancer would need to provide the alterted text file, but no source code.

I have personally worked on both types of projects, as have many programmers. Not all clients are interested in source code. Some just want a one-time task accomplished.

florydev · ‎11-04-2019

Preston H. wrote:

re: "Let me give you a specific example. If I write a program in C for a client that changes all the words foo to bar in a text file and I deliver an executable that works on the clients operating system of choice, are you saying in a fixed priced contract I do not have to deliver source code?"

A fixed-price contract is about providing specific deliverables.

In such a situation, the deliverable for the contract would be stated:

"The freelancer will create a function in C that can change all of the words foo to bar in a text file."

[or]

"I have a large text file (50 MB) in which I need all of the words foo to be changed to bar. The freelancer will create a function and program in C that accomplishes this task and provide the altered file to me."

So that is a no?

prestonhunter · ‎11-04-2019

re: "So that is a no?"

The answer to your question is "not necessarily."

You did not specify what the stated task and/or deliverable was for the project. You simply stated what YOU (as the freelancer) did.

There is no way to answer your question unless we know what the stated task/deliverable was.

Another task could be:

c) "Create an executable file that I can run on current the Windows operating system that will accept as input a text file and export a version of the file in which all words foo are changed to bar. Create the program in C. Provide the executable file."

That task/contract is DIFFERENT than a similar contract (d) that asks for the freelancer to create an executable file AND provide the source code.

Whatever it is that the client wants to receive needs to be specified in the original agreement.

The freelancer should not be a jerk about this. The freelancer should NOT hold anything back that the client is expectiving to receive.

I would never create source code for a client and ONLY deliver an executable file. That's not how I work. I think very few freelance developers/programmers on Upwork work that way. But we HAVE heard of situations like that in the Forum

Any freelancer who is thinking of holding ANY files back SHOULD make sure that they specify what they are planning to deliver and not deliver in the original agreement.

This goes for all types of work... photography, programming, graphic design, and video creation.

There won't be any problems if both parties clearly communicate their expectations.

As a practical matter, Upwork does not have any of these files. If a disagreement arises, Upwork can not unlock its "secret file vault" and deliver raw source code files or raw video source files to clients. It is the freelancers who are in possession of those files.

Clients should understand this.

florydev · ‎11-04-2019

Preston H wrote:
re: "So that is a no?"

The answer to your question is "not necessarily."

You did not specify what the stated task and/or deliverable was for the project. You simply stated what YOU (as the freelancer) did.

All right, the client wants an executable that does what was stated. Do you have to deliver the source?

mtngigi · ‎11-04-2019

Mark F wrote:
Preston H wrote:
re: "So that is a no?"

The answer to your question is "not necessarily."

You did not specify what the stated task and/or deliverable was for the project. You simply stated what YOU (as the freelancer) did.
All right, the client wants an executable that does what was stated. Do you have to deliver the source?

Mark - I'm not interjecting here to further confuse you, but to put another slant on this topic.

Despite what some think about "the way things work", here's the bottom line (IMHO). I believe that the terms in fixed vs hourly and what a client gets at the end depend a very great deal upon the job and category. (and here, let us all take note of how many poorly-worded documents Upwork provides - many directives/TOS are "clear as mud").

For instance: If I'm designing a logo for a client, the end product is exactly the same whether I produced it on a fixed rate contract, or an hourly contract. The client receives the same files no matter what: native source file and various versions the client may need across all media. I don't believe this easily applies to jobs like source codes (and correct me if I'm wrong because I am completely illiterate about that stuff).

There may be other good examples to further this "argument", but I can only cite what I know in my category. If a client specifies they want native files for jobs other than logos, then I factor that in and let them know what I can legally give them. If they don't specify native files, then they get press-ready files ready to send to a printer; that is all specified in my bids. And again, this would occur in either working model - fixed or hourly.

My 2¢.

pudingstudio · ‎11-04-2019

Mark F wrote:
On another topic it was stated by one poster that:
If this was an hourly contract, then all files you produce while working on the project (billing time to the client) would belong to the client. So you WOULD need to provide those files to the client.
But because this is a fixed-price contract, then you only "need" to provide the deliverables specified in the original agreement.
Then it was further stated that:
Fixed-price contracts are contracts to provide specified delivables.

I have not read this anywhere, I have not seen it stated anywhere, on the surface it does not make sense to me that there would be a difference in what is delivered in the two scenarios. I am more than happy to be wrong, I just want to understand that if I am wrong, why I am wrong.

No idea, only sharing opinion:

Can a third party dictate which files are to be delivered?

That has to be between client and freelancer; no matter the contract type.

If they can, by which criteria?

There are jobs without 'source files' (tutoring, installing software..).

What would happen when "I accidentally delete source files because my grandmother was ill"?

Strange to learn about that rule (if it exists).

prestonhunter · ‎11-04-2019

re: "Can a third party dictate which files are to be delivered?"

No.

re: "That has to be between client and freelancer; no matter the contract type."

Correct.

pudingstudio · ‎11-04-2019

Thanks, Preston.

Evil Mark brought confusion, I believed his wickedness.

(no ill thoughts, just making a joke)
Smiley.

florydev · ‎11-04-2019

Antun M wrote:
Thanks, Preston.

Evil Mark brought confusion, I believed his wickedness.

(no ill thoughts, just making a joke)
Smiley.

Am I?

Can a third party dictate which files are to be delivered? It seems like they can...

https://www.upwork.com/legal#optional-service-contract-terms

6.4 OWNERSHIP OF WORK PRODUCT AND INTELLECTUAL PROPERTY

Upon Freelancer’s receipt of full payment from Client, the Work Product (except for any Background Technology), including without limitation all Intellectual Property Rights in the Work Product (except for any Background Technology), will be the sole and exclusive property of Client, and Client will be deemed to be the author thereof. If Freelancer has any Intellectual Property Rights to the Work Product that are not owned by Client upon Freelancer’s receipt of payment from Client, Freelancer hereby automatically irrevocably assigns to Client all right, title and interest worldwide in and to such Intellectual Property Rights. Except as set forth above, Freelancer retains no rights to use, and will not challenge the validity of Client’s ownership in, such Intellectual Property Rights. Freelancer hereby waives any moral rights, rights of paternity, integrity, disclosure and withdrawal or inalienable rights under applicable law in and to the Work Product. If payment is made only for partial delivery of Work Product, the assignment described herein applies only to the portion of Work Product delivered and paid for.

tlsanders · ‎11-04-2019

Antun M wrote:
No idea, only sharing opinion:

Can a third party dictate which files are to be delivered?

Yes, if you've agreed to be bound by that third party's terms and you don't explicitly agree otherwise with the client.

That has to be between client and freelancer; no matter the contract type.

The client and freelancer are free to agree to alternate terms. If they opt not to enter into such an agreement or neglect to do so, then their contract is governed by Upwork's default terms, as both parties agreed when registering to use the site.
If they can, by which criteria?

There are jobs without 'source files' (tutoring, installing software..).
What would happen when "I accidentally delete source files because my grandmother was ill"?

Then you would not have fulfilled the terms of the contract, if you were operating under Upwork's default terms.

florydev · ‎11-04-2019

Tiffany,
How formally do those terms need to be set in your opinion?

tlsanders · ‎11-05-2019

Mark F wrote:
Tiffany,
How formally do those terms need to be set in your opinion?

Ideally, they should be written into the offer. While a case can be made for terms agreed to in messaging, the actual contract is made up of the offer, the freelancer accepting it, and the Upwork terms incorporated as a function of both parties having agreed to be bound by them.

With limited exceptions, representations made in advance of execution of the contract are not considered in interpreting a contract, as the terms in the executed agreement are considered to supersede anything previously discussed.

If I wanted to ensure that terms like retaining intellectual property were clear and enforceable in an Upwork contract, I would ask the client to withdraw the offer and substitute one that included that provision before accepting.

petra_r · ‎11-04-2019

Mark F wrote:
On another topic it was stated by one poster that:
If this was an hourly contract, then all files you produce while working on the project (billing time to the client) would belong to the client. So you WOULD need to provide those files to the client.
But because this is a fixed-price contract, then you only "need" to provide the deliverables specified in the original agreement.
Then it was further stated that:
Fixed-price contracts are contracts to provide specified delivables.

I have not read this anywhere, I have not seen it stated anywhere

You won't find it anywhere, (other than in Preston's posts) because he made it up.

a_lipsey · ‎11-04-2019

The thing with all contracts and TOS is that they are subject to interpretation. You'd have to go to court and get a ruling for real specificity. I think Upwork's TOS are broad so that they cover a range of FL activities, and as such, can be interpreted different ways, best for clients and freelancers to be specific in deliverables and outcomes and not ever rely on TOS to protect them. And remember that any advice you get here that isn't from a mod is not Upwork policy or TOS, simply other users' speculation - whether they are right or not.

prestonhunter · ‎11-04-2019

I do not blame Petra if she disagrees with my explanation of how fixed-price contracts work.

She is basing her interpretation on Section 6 of Upwork's ToS.

https://www.upwork.com/legal#optional-service-contract-terms

Particularly sub-sections 6.4, 6.5 and 6.6

My explanation of how fixed-price contracts work is NOT based purely on that document.

petra_r · ‎11-04-2019

Preston H wrote:
I do not blame Petra if she disagrees with my explanation of how fixed-price contracts work.

She is basing her interpretation on Section 6 of Upwork's ToS.

https://www.upwork.com/legal#optional-service-contract-terms

Particularly sub-sections 6.4, 6.5 and 6.6

My explanation of how fixed-price contracts work is NOT based purely on that document.

This is not the case. The above subsections were in a different context.

Preston, what I meant is the fact that you keep making pretty specific statements about deliverables being inherently different between hourly and fixed rate jobs, Mark asked you where it says what you stated. I informed Mark that doesn't, because you made it up.

prestonhunter · ‎11-04-2019

re: "I informed Mark that doesn't, because you made it up."

I can understand why you might feel that way, but that is not how I see things.

I have no intention of making up anything. I have no interest in telling Upwork how to run their business.

My descriptions are based on what I can read on Upwork's website, in their Help documents as well as ToS, and in statements by Upwork representatives, including Forum moderators, and in how things are done in actual practice on the site.

This does not mean that my word alone should be considered the "source of all truth" on this topic. But I can assure you that what I have stated in my posts about this topic represents what I genuinely consider to be the way things work.

petra_r · ‎11-04-2019

Preston H wrote:

My descriptions are based on what I can read on Upwork's website, in their Help documents as well as ToS, and in statements by Upwork representatives, including Forum moderators,

So how about you simply show where in the ToS it says it and the matter is solved and closed.

Not some vague "It's what I think I understand from what I read so I shall continue to keep claiming it's a fact" - but where it says that in absence of a client and a freelancer agreeing otherwise, there are fundamentally and dramatically different deliverables on an hourly contract as opposed to a fixed rate one.

(Other than the fact that the "deliverable" on hourly jobs is actually just the time spent working, ultimately,")

browersr · ‎11-04-2019

This is a great question. The problem when looking to the ToS for this level of specificity is that the ToS is meant to cover everything someone may buy/sell through UW which makes it rather inadequate for nuance. For many things the finished product is the finished product. For other things, like software, there is a finished product as defined by some complied output (generally speaking) and by what went into to making it (the source code). It is actually unlike many other deliverables offered by other professions as I would certainly argue that the source code IS the product and not the compiled output. I educate all of my clients who are new to software around this fact. They may think they are paying for the app as it's submitted to the store, but really their investment lies in the code that produces it. Without that code they are left with one unalterable output that in the world of software is by itself wholly insufficient.

When looking at the way this site works specifically, the concept of Fixed Price takes on a very different feel because it - unlike hourly - will have specific written deliverables that the client will then use to determine if the milestone was met and thus the freelancer gets paid. An hourly, outside of the job description and whatever discussions took place, doesn't have this singular formal written "document" that outlines what the expectation is. Therefore it's easier to discuss things in terms of the "spirit" of what should be delivered. With fixed one can point directly to the milestone description and attempt to say that is the only thing that matters.

So what's the answer here? I don't think you will necessarily get one unless you go to court and likely each case will present some nuance that might make the outcome different than another. The other option is to batter one another with differing interpretations of the ToS which doesn't amount to much since most here aren't lawyers let alone one's with expertise in this specific area of law. Like so many things it comes down to handling your business the way you think it is best and therefore living with the fact and risk that not everything will have fully backed detailed and easily understood legal documentation to support it.

In this specific scenario with source code I would follow (and do follow) just what Mark indicated in the OP and provide the same deliverable at the end. As software engineers we know better here even if the client doesn't ask for it. For me source code is always in the deliverable.

mtngigi · ‎11-04-2019

Scott B wrote:
This is a great question. The problem when looking to the ToS for this level of specificity is that the ToS is meant to cover everything someone may buy/sell through UW which makes it rather inadequate for nuance. For many things the finished product is the finished product. For other things, like software, there is a finished product as defined by some complied output (generally speaking) and by what went into to making it (the source code). It is actually unlike many other deliverables offered by other professions as I would certainly argue that the source code IS the product and not the compiled output. I educate all of my clients who are new to software around this fact. They may think they are paying for the app as it's submitted to the store, but really their investment lies in the code that produces it. Without that code they are left with one unalterable output that in the world of software is by itself wholly insufficient.

When looking at the way this site works specifically, the concept of Fixed Price takes on a very different feel because it - unlike hourly - will have specific written deliverables that the client will then use to determine if the milestone was met and thus the freelancer gets paid. An hourly, outside of the job description and whatever discussions took place, doesn't have this singular formal written "document" that outlines what the expectation is. Therefore it's easier to discuss things in terms of the "spirit" of what should be delivered. With fixed one can point directly to the milestone description and attempt to say that is the only thing that matters.

So what's the answer here? I don't think you will necessarily get one unless you go to court and likely each case will present some nuance that might make the outcome different than another. The other option is to batter one another with differing interpretations of the ToS which doesn't amount to much since most here aren't lawyers let alone one's with expertise in this specific area of law. Like so many things it comes down to handling your business the way you think it is best and therefore living with the fact and risk that not everything will have fully backed detailed and easily understood legal documentation to support it.

In this specific scenario with source code I would follow (and do follow) just what Mark indicated in the OP and provide the same deliverable at the end. As software engineers we know better here even if the client doesn't ask for it. For me source code is always in the deliverable.

Brilliant - and the word I should have used when making my case ... "nuanced". I know to educate my clients as to what they need. Many FLs don't know, and/or don't bother.

petra_r · ‎11-04-2019

Scott B wrote:
This is a great question. The problem when looking to the ToS for this level of specificity is that the ToS is meant to cover everything someone may buy/sell through UW which makes it rather inadequate for nuance

The deliverables, regardless of hourly or fixed rate, as per the ToS, are what is agreed between client and freelancer.

In absence of a detailed agreement in full or in part, the optional servive contract terms apply and are binding and they go pretty deeply into detail.

They do not differentiate at all between hourly and fixed rate contracts.

"However, if and to the extent that the Users who are party to a Service Contract have not agreed to different terms, then they agree to incorporate these Optional Terms."

This will include the majority of contracts on Upwork, because most freelancers do not specify a detailed service contract at the outset.

So Preston just waving away the legal terms saying "Oh, I don't base my claims on legally binding terms" holds no water whatsoever.

prestonhunter · ‎11-04-2019

You left out the word "purely."

My description of how fixed-price contracts work is heavily informed by Upwork ToS. But it is not based purely on the ToS document.

I DO understand that some people might not find such an approach unacceptable. But I see no reason to be ambiguous about where I'm coming from on this.

Upwork is a software system. It is governed by source code, and also by the actual practice of Upwork employees and users. Upwork ToS is important, but it is not everything.

To quote Petra's post above:

"The deliverables, regardless of hourly or fixed rate, as per the ToS, are what is agreed between client and freelancer."

I agree with this, as far as fixed-price contracts go.

With hourly contracts, no agreement at all is necessary. All work product belongs to the client.

Petra is referring to the ToS document when she says that there is no difference between hourly and fixed-price contracts in this regard.

I don't have any problem with her pointing out - as described in the ToS - that all work product belongs to the client.

So I don't see that there is much disagreement on this topic.

I am emphasizing the fact that clients and freelancers SHOULD agree to specific deliverables before starting any fixed-price milestone.

A client who fails to make it clear what she expects to receive can not rely on Upwork's ToS to obtain files. Upwork doesn't have her files. The freelancer has them. Clients shouldn't risk a misunderstanding about this.

petra_r · ‎11-04-2019

Preston H wrote:

I DO understand that some people might not find such an unapproach acceptable.

Thank you.

You are right. Such an "unapproach" as you call it, is perfectly fine until something goes wrong.

Also, when you use your "unapproach" that's your business. That does not mean that your "views" - which contradict the terms of service, become a great defense when there is a dispute and the freelancer says "Yes, I know what it says in the legally binding terms of service which are used to resolve such matters, but that guy Preston said it's all nonsense and it's actually different."

How far do you that would get them in a dispute or arbitration?

Again you need to consider those who don't question your posts and act on what you told them.

prestonhunter · ‎11-04-2019

re: "an unapproach acceptable"

That was a typo.

Corrected to:

"I DO understand that some people might not find such an approach unacceptable"

As far as I can tell, both Petra and myself are in agreement that if the client and freelancer specify what the deliverables are (which is something that should be done with every fixed-price milestone), then that agreement dictates what deliverables should be provided by the freelancer.

Isn't a fixed-price milestone which does NOT specify tasks and deliverables somewhat meaningless?

Does the disagreement over my description of how fixed-price contracts are done boil down to this:

"What if a fixed-price task is specified, but the deliverable files are not specifically identified? What then should be required of the freelancer?"

browersr · ‎11-04-2019

Petra R wrote:

Scott B wrote:
This is a great question. The problem when looking to the ToS for this level of specificity is that the ToS is meant to cover everything someone may buy/sell through UW which makes it rather inadequate for nuance
The deliverables, regardless of hourly or fixed rate, as per the ToS, are what is agreed between client and freelancer.

In absence of a detailed agreement in full or in part, the optional servive contract terms apply and are binding and they go pretty deeply into detail.

They do not differentiate at all between hourly and fixed rate contracts.

"However, if and to the extent that the Users who are party to a Service Contract have not agreed to different terms, then they agree to incorporate these Optional Terms."

This will include the majority of contracts on Upwork, because most freelancers do not specify a detailed service contract at the outset.

So Preston just waving away the legal terms saying "Oh, I don't base my claims on legally binding terms" holds no water whatsoever.

The optional terms I don't think specifically cover what Mark asked in the OP. This is where nuance comes in and hopefully where common sense prevails before going to court... Indeed there should be no differentiation between hourly and fixed but I can see where the appearance of one would lead to the initial question.

richard_wein · ‎11-05-2019

Petra R wrote:

Scott B wrote:
This is a great question. The problem when looking to the ToS for this level of specificity is that the ToS is meant to cover everything someone may buy/sell through UW which makes it rather inadequate for nuance
The deliverables, regardless of hourly or fixed rate, as per the ToS, are what is agreed between client and freelancer.

In absence of a detailed agreement in full or in part, the optional servive contract terms apply and are binding and they go pretty deeply into detail.

As far as I can see (but I might have missed something) those terms don't settle the specific question of whether source code must be delivered if it hasn't specifically been stated to be a deliverable.

The most relevant text seems to be this:

“Work Product” means any tangible or intangible results or deliverables that Freelancer agrees to create for, or actually delivers to, Client as a result of performing the Freelancer Services, including, but not limited to, configurations, computer programs, or other information, or customized hardware, and any intellectual property developed in connection therewith.

Whatever the contractual situation, I would consider it quite unacceptable for a software developer to refuse to deliver the source code on the grounds that it wasn't mentioned as a deliverable. That would be like a builder saying: "But you only asked for a house. You didn't say you wanted foundations."

I certainly don't claim any legal expertise, but I believe that courts (and, more important for us, arbitrators) have some leeway to take into account common sense and established practice. So I would hope and expect that an arbitrator would decide against a freelancer who refused to deliver source code without better grounds than "the client didn't specify it as a deliverable".

I'm not saying that this would/should also apply to intermediate stages of other kinds of work, such as rough sketches. It depends on the kind of work.

They do not differentiate at all between hourly and fixed rate contracts.

That appears to be the case, as far as I can see. But, if Upwork's website says otherwise (and I don't recall if it does), perhaps an arbitrator would take that into account.

petra_r · ‎11-05-2019

Richard W wrote:
They do not differentiate at all between hourly and fixed rate contracts.
That appears to be the case, as far as I can see. But, if Upwork's website says otherwise (and I don't recall if it does), perhaps an arbitrator would take that into account.

The Upwork website does not say otherwise. Preston does.

And that is the entire point of this thread and the discussion on the other thread: Preston claiming that there is a difference and stating what those deliverables must be for each.

Ultimately, on hourly contract the main deliverable is "time spent working while tracking the time properly." - which is why there can not be a dispute on the quality of the deliverables.

florydev · ‎11-05-2019

As far as I can see (but I might have missed something) those terms don't settle the specific question of whether source code must be delivered if it hasn't specifically been stated to be a deliverable.

The most relevant text seems to be this:
“Work Product” means any tangible or intangible results or deliverables that Freelancer agrees to create for, or actually delivers to, Client as a result of performing the Freelancer Services, including, but not limited to, configurations, computer programs, or other information, or customized hardware, and any intellectual property developed in connection therewith.

Whatever the contractual situation, I would consider it quite unacceptable for a software developer to refuse to deliver the source code on the grounds that it wasn't mentioned as a deliverable. That would be like a builder saying: "But you only asked for a house. You didn't say you wanted foundations."

They don't specifically say and that is a shame and I have no expectation that they ever will.

But as far as I am concerned it does settle it. Source code is an Intellectual Property in likely every country involved with Upwork so to me you can't say that an IP is owned by the client if they don't actually have it. The reason I asked the question is I felt that the idea of one type of project being different to another in this aspect felt like equivocating and to put a finer spin on it...it was really irking me.

But now I think I will ask a more direct question on the developers forum.

Different Deliverables on a Fixed Rated vs a Hourly Contract