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Contract with multiple milestones. Company wants separate contracts.

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Betty B Member Since: Oct 3, 2020
1 of 5
Hi there,
About to sign first major contract via upwork as we wanted an escrow for the service. Was invited by the company and asked to pay 5% more for the commission? Is that right?

We are having a disagreement with the company who insists on having separate contracts for the same app. The amount is significant. There are couple of milestones. Tight schedule. Several teams will work on project.

Company therefore sent separate contracts for the same app, each contract for different section of it and under each section several milestones. Their reasoning is that we must fund the sections simultaneously and that will not be possible under one contract. I understand the former statement, but the latter is less plausible.

I am happy to fund simultaneously, but concern over our risk exposure since it is split in different contracts, should we have dispute or should they try to increase price for the last segment once the first ones have been delivered. Especially that the app will not be fully functioning until all segments are completed.

They are insisting on the separate contracts as “company policy”. We are also signing one full contract to be attached to each one of the segments’ contracts.

I don’t understand what is the difficulty in just creating more milestones under one contract and the same funding structure applies. They state that different teams will be working to achieve the tight deadline and if one has a delay, the other still needs to get paid. Hence separate contracts so unaffected of each other’s delay.

Do you think this sounds reasonable and what are the risks for us?
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Moderator
Nikola S Moderator Member Since: Jul 2, 2020
2 of 5

Hi Betty,

 

Could you please click on my name and send me a PM with more information about the contract you are referring to? I will be sure to look into your report and respond to you accordingly.

 

Thank you,

~ Nikola

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Betty B Member Since: Oct 3, 2020
3 of 5
Hi Nikola, thank you for your prompt response. I tried message you but it just won’t let me(page doesn’t load). Is there something you would like me to add/clarity?
Many thanks
Betty
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Tom C Member Since: Oct 3, 2020
4 of 5

You should insist in creating one contract and under one contract you can create several milestones. Creating several contracts for ONE JOB, will limit your options of disputes.

If you create different contracts, then yes, you are right, they can change ToS of other contracts and you will not be able to disputes because you can dispute milestones in one contract. You cannot dispute or relate disputes in other contracts.

Your app development team are trying to play safe and smart with you, so you will not have lots of options when you will have any disagreement with them.

Better to stick with one contract and make sure you will release milestones once they completed.

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Betty B Member Since: Oct 3, 2020
5 of 5
Hi Tom, thank you for this!
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