Ask HN: Conflict of Interest while freelancing

10 points by throwaway642012 8 years ago | 10 comments

I'm a freelancer in Germany, and I'm waiting for the new project to be finalised. Meanwhile I'm working on a ML based app, and a startup approached me to do some hourly work. The startups is in the same space as my product, and is similar in some ways to my app. We've not signed a contract as I'm planning to work only 10-16 hours for the startup. I've not yet started the work (for the startup) yet.

Will there be potential conflict of interest/ legal issues in the future if I launch my product?

Should I take some steps to indemnify me from the other startup?

Any help is highly appreciated.

CyberFonic 8 years ago |

Your client is most certainly going to view your work as encroaching upon their intellectual property. That is simply how managements think. Regardless of the merit of their beliefs.

It might be possible to avoid future problems by having a contract where you disclose that you are working in the same space as the startup and that you will not use your code in their product, nor their code in your product. It is of course, difficult to prove that down the track.

If I was in your situation, I would decline the work. 10-16 hours doesn't generate enough revenue to pay for lawyers in the future.

mchannon 8 years ago |

Since you're working on what could converge into one product suite, have you considered offering a formal partnership instead of a strict hourly arrangement? They might be able to bring a steadier stream of work to you, and help provide you a more robust company platform to launch your own project (by sharing it).

You could always put an escape clause into your agreement that indemnifies any and all of your projects if the alliance fails to take off financially.

The only reason I suggest this is because you're actively considering doing the work for money, suggesting that your own project is underfunded (and less financially urgent than doing the work of others). They can obviously help you with this problem if they're offering to pay you.

A lot of deals are better than 100% of nothing.

chrisked 8 years ago |

Decline the work or make it transparent to both parties via a contract. 10-16 hours is not worth the potential legal trouble as well as burning bridges.

muzani 8 years ago |

Put it in the contract. Get a lawyer to double check. Make it clear to them as well. I usually triple check the anti-competition and the IP clauses in all contracts.

This kind of thing happens all the time. People who are experts in a field get hired by competitors in the same field.

CyberFonic 8 years ago | |

Agree with your suggestion, but the cost of lawyers is probably too much in light of it only being 16 hours work.

johnnyRose 8 years ago |

Steer clear from them - as far away as possible. Document important dates such as when/how/why you first came up with the idea, when you began working on it, when the startup approached you, etc. Absolutely do not look at anything technical from them and definitely any discussions about their product.

How would you feel if you hired a freelancer to work on your product and then shortly after they launched a similar product?

BjoernKW 8 years ago |

The way I see it you have two options:

1. Make what you're working on explicit and transparent in the contract you draw up with that startup. This has to be made / checked by lawyer in order to avoid any ambiguity.

2. Don't work for the startup.

If option #1 is worth it depends on how much profit you expect to make from the contract.

Tomte 8 years ago |

So even in your opinion it's in the same space and similar.

Don't work for them, don't have them send you anything remotely technical (specifications, code, documentation).

throwaway642012 8 years ago | |

They're a scrappy startup, and don't have much legal firepower. They're having hard time find people, so I agreed to help them. But after reading the comments here, I think it's better to back out instead of having potential future legal troubles.

DoreenMichele 8 years ago | | |

They're a scrappy startup, and don't have much legal firepower.

And if your project becomes big money, they may sue because they are still struggling to get by and you aren't.

So I think your impetus to turn it down is the correct one.