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I own a Canadian corporation, which consults on software. Recently, I've been offered a contract with a US company. Instead of making the contract solely with my company, it states that "Consultant" is comprised both of my company, and myself individually: Bob Smith, an individual, and Bob's Software Company, Inc. ( together “Consultant”)

The NDA portion is directed at my person, and obviously all the legal responsibilities would also involve my person, not just the corporation.

Is this a usual practice? Is it something to be wary of?

Thanks!

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The implication is that it makes you and your company liable for the obligations of the contract. If something goes wrong and your client wants to sue you, they can sue either or both people - putting your personal assets (home, car etc.) at risk as well as the assets of your company.

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From your client's point of view, they want you personally to do the work and they are presumably paying accordingly. If they merely contracted with your company for the work then you could subcontract the work out to someone else with much lower qualifications and pocket the difference. The wording is intended to stop that.

You need to decide what happens if you are unable to do the work, for example if you fall ill. Since the contract specifies you personally, if you are unable to do the work then you are in breach of contract. Make sure there is some kind of liability limitation for any such circumstances, and think carefully about what those might be (e.g. a relative's funeral might not count unless the contract says so). If it is a long-term contract then make sure holidays are in. And probably other things I haven't thought of.

This contract makes you look like an employee and quack like an employee, but you are not an employee and do not have the rights of an employee unless the relevant labour law says otherwise. Various national and state legislatures have been cracking down on contracts that blur the line between employee and contractor, and having you personally named on the contract is the kind of thing that might trigger such a provision. You might also find that US or Canadian tax authorities treat this differently too.

  • Thanks, Paul! This makes sense, the company obviously wants to protect itself and make sure I'm the one doing the work. I was just worried about the tax and legal repercussions that my name would have on the contract. – vivri Nov 27 '19 at 15:19
  • Unless the contract prohibits subcontracting your answer is wrong - an individual can subcontract as easily as a company can. – Dale M Nov 27 '19 at 18:53
  • @DaleM: Ahh. OK. I would delete this, but its now marked as "accepted." – Paul Johnson Nov 28 '19 at 10:28
  • @vivri DaleM has just pointed out that my answer is wrong, so if you could un-accept it I'll delete it. – Paul Johnson Nov 28 '19 at 10:29
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It's also possible that it's a form contract and they just plug and play the names. If there are parts of the contract that you don't like, or you want spelled out better, ask for it. Hopefully you have an attorney reviewing it on your behalf - it may cost you a little money, but it would certainly be worth it if things went poorly.

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