Can Contractors File a Lien for Unpaid Work? 42
How About This asks: "Typically contractors are considered unsecured creditors, and if a company is having financial problems it is the unsecured creditors that usually lose out the most, or at least that's my understanding. Is it possible for a contractor that did software design and programming work to file a lien against a company for not paying for work performed? My searches have revealed references to mechanic's liens against land and property, but nothing directly with technology/computer related areas. Anyone have any links to sites or pages with this information? Or references to good (CA) lawyers in this field that can explain things (and has a reasonable initial consultation fee since obviously money is in short supply)."
Mechanic's lien? (Score:3, Informative)
See also: http://www.fullertonlaw.com/chapt1.htm#mechlien [fullertonlaw.com]
Interesting (Score:4, Interesting)
<ianal>
IIRC, mechanics liens are not "active" devices for securing payment, but "passive" devices that prevent the property owner from getting a mortgage or otherwise transferring his asset by sale. A good title search puts the brakes on any kind of transfer, so they have to settle with you before selling assets with recorded titles and deeds like real property.
I dunno if you need a contractor's licences to file a mechanics lien, but I think there may also be liens designed for suppliers of materials that are left unjustly unpaid.
</ianal>Re:Interesting (Score:2)
mechanic's leins (Score:3, Interesting)
but you say you want $$$. mech's leins are only on the property that the mech is working on (ie your care, etc). if you're trying to get compensation, i don't think mech's leins are the way to go.
Re:mechanic's leins (Score:3, Insightful)
I don't know if a lein allows one to take posession of the affected property at any point, but that would certainly up the ante!
Re:mechanic's leins (Score:1)
"When a contract debtor defaults, the contractor supplying labor or material can elect to either sue the debtor on the promise to pay or proceed against the property. "
-from the fullertonlaw article cited above.
oops.
"mechanic's leins" aren't liens by auto mechanics! (Score:3, Informative)
You've fallen prey to the suggestion that legal terminology has any bearing to legal practice. The legal term "Mechanic's Lien" comes from before the era of the automotive mechanic. According to tort law, a Mechanic's Lien is that which is filed against property in posession of the debtor in which the creditor has some stake. It involves titles, etc, as explained by other posters, and is commonly called a "Construction Lien" since it's usually used by contractors.
You're thinking of an Artisan's Lien, which applies to property of the debtor that is physically in posession of the creditor. This commonly the case with auto mechanics.
So yes, it's odd -- my business law professor had a field day with this one on the exam :)
Re:Ummmm excuse me? (Score:1)
What else is Ask Slashdot for?
Re:Ummmm excuse me? (Score:2, Interesting)
Typically contractors are considered unsecured creditors, and if a company is having financial problems it is the unsecured creditors that usually lose out the most, or at least that's my understanding. Is it possible for a contractor that did software design and programming work to file a lien against a company for not paying for work performed? My searches have revealed references to mechanic's liens against land and property, but nothing directly with technology/computer related areas. Anyone have any links to sites or pages with this information? Or references to good (CA) lawyers in this field that can explain things (and has a reasonable initial consultation fee since obviously money is in short supply).
I hope that helps, and I sincerely hope that you are able to sort out the problem your browser is apparently having with displaying the actual text of slashdot articles.
Check your contract (Score:5, Informative)
By default, independent software contractors own the copyright on work they produce. Unless you specifically signed over the rights, you probably still own it. Normally if they pay you, then they can use it (that's what they are buying). If they haven't paid you they may be commiting copyright infringement by using your code after you inform them that you have not authorized them to use it unless they pay. If they have revenue flow tied to the software, you might be able to threaten them with an injunction (but see below).
Even if you have signed over the rights, if they breach the contract that transfers the rights by not paying you, then the whole contract might be thrown out.
Unfortunately, if they are in bankruptcy, you usually can't sue them until they come out of it. However, if you send them a C&D letter informing them that you own the copyright and want them to stop using it and they blow you off, then they will be notching it up to "willful" violation which has hefty penalties. It is very rare for a company to completely liquidate, so eventually you have some leverage.
You absolutely need a lawyer (IANAL). Look up the names of some on some of the filings in the DVD-CCA case -- that was in California.
Re:Check your contract (Score:4, Informative)
Re:Check your contract (Score:2)
Re:Check your contract (Score:2, Insightful)
Re:Check your contract (Score:2)
The court system is special, everyone is always subject to the court system, whether they want to be or not. The use of arbitration only applies if both parties agree (or laws specify otherwise). So if the agreement is in dispute, then THAT gets disputed in the courts.
Re:Check your contract (Score:2)
Re:Check your contract (Score:2)
If they haven't paid you they may be commiting copyright infringement by using your code after you inform them that you have not authorized them to use it unless they pay.
Yeah, but why in the world would you want to do that? If they are experiencing financial difficulties, don't you want them to use your software to help themselves get out of the financial difficulties? Stopping them from using your software is only shooting yourself in the foot.
Re:Check your contract (Score:1)
By not paying you it would be they who are shooting themselves in the foot. If they are still operation there is *some* money around, it's just being allocated to the most important places. If they're dead without paying you, then you've taken over the most important place.
Re:Check your contract (Score:1)
Re:Check your contract (Score:2)
This guy stated specifically that he is a contractor, which rules out work for hire. Do a goodle search for CCNV v. Reid if you want Supreme Court precedent to clarify the differnece in the copyright context.
Re:Check your contract (Score:1)
Don't bet on it. "Professional photographers" claim that the copyrights to pictures they take of your wedding are owned by them.
Re:Check your contract (Score:1)
I hope you aren't charging other parties for code you produced under contract for someone else or you're going to be poor soon.
Re:Check your contract (Score:4, Informative)
IANAL either, but I make sure to check the definitions because I know how sneaky they can be.
Whether a contract existed may not matter (Score:1)
Nope. In a typical Chapter 11 bankruptcy (a "reorganization," as distinguished from a Chapter 7 liquidation), the court generally reduces the debtor's debts substantially, including debts arising from, say, contracts. These days, a business debtor typically pays just 20 cents per dollar of debt. A bankruptcy court has broad and substantial powers, including the power to reform contracts, but this extraordinary power is generally wielded, if at all, to the benefit of the debtor, not the creditors.
FWIW, yes, IAAL (now turned technologist), but I have been out of the legal field for years now. Furthermore, I was in taxation and public utility law, not bankruptcy. For self-help, try www.nolo.com (Nolo Press) or a damned good trade association bankruptcy site: www.abiworld.org.
Re:Check your contract (Score:2, Funny)
You may be out of luck (Score:3, Interesting)
If you are just getting into the business you will still want to seek advice from a lawyer. Ask about ways you can structure your contracts so that you get what you are owed. I would ask for a downpayment if you think the company may be short on cash. You can also bill them as you go, once or twice a month.
Go down to the courthouse and read the form.... (Score:3, Informative)
What kind of lien? (Score:2)
Workman's lien and contracts for goods and service (Score:2)
Standard disclaimer: you should really see a lawyer regarding your own particular circumstances. This isn't legal advice, just some general information you might be interested in.
A workman's lien, as others have pointed out, is a proprietary right over an objet that you surrender to a workman for him/her to work on it. In a certain sense, the workman becomes the "owner" of the property you surrender (or, to put it another way, your title and interest in the property is burdened or encumbered by the lien) and the workman has the right to prevent you from taking back the property until you're paid the price of his or her work. It doesn't really apply in contracts for sale or construction of goods.
In that case, different rules apply. In a contract for the sale of goods, title usually passes the moment the contract of sale is finalized, i.e. when vendor and purchaser agree that the sale should go ahead. If the purchaser goes bankrupt, then all creditors have rights against those goods as the purchaser's property, and the vendor simply has the status of an unsecured creditor through his unsecured right to payment
The traditional way to get around this is the insertion of a clause into the contract to override the default position and stipulate that title only passes once payment has been made, and that up until that point the purchaser has "only" an unrestricted licence to use and convert the goods as s/he wishes. If the purchaser goes bankrupt, the vendor then has a property right in those goods (provided they're still capable of recovery) over and above the rights of other creditors. In the case of contracts for the production and sale of intellectual property, the default position would be governed by the provisions regarding ownership according to the circumstances when it is related. IIRC, US copyright law provides that copyright always vests with the author unless there is an express contractual term to the contrary. I am unaware of the position for patents, designs, or other forms of IP in the US.
Bottom line, you should try to have a term included in your contract stipulating that assignment or exclusive licence in the copyright or other IP right will only transfer once you've received payment. That's likely to be difficult, as your employer is likely to be making regulard part payments (through your pay cheque) for your work, and doubtless is expecting to see something for it. Note that you may have trouble doing this retrospectively, especially if the person or compnay who's paying you is in trouble. That's called a voidable preference, and bankruptcy/insolvency law takes a dim view of such attempts of creditors to secure parts of a prospective bankrupt's assets for themselves when it becomes clear that the ship's going down.
what my friend did... (Score:2)
what your friend did was stupid...try a UCC... (Score:3, Insightful)
your best bet so far is to send via certified mail a C&D -- assert your copyrights, and threaten and then absolutely try and file a UCC against them
it can and will prevent them from obtaining any kind of financing from a bank since it will stick out like a sore thumb
A few (probably useless and redundant) ideas (Score:1)
* with small companies, sometimes it can be useful to redefine the target of your suit- I saw a few instances where folks added the individual's name (perhaps the owner), as well as the company name to the list of defendants in order to track somebody down that can be held accountable. I'm not sure if you could change the name of the defendant from a financially insecure company to a finacially secure owner for purposes of collection. I'm also not sure how/if such a thing would work after the case is decided. Obviously, if such a thing were to work, the owner would have to be somehow personably accountable for your debt.
*What kind of bankruptcy are they filing for? If it's chapter 11, or something like that, I think you could still hit them with bank attachments.
*If they are not filing for Chapter 7, how about a debtors exam to figure out where you can get your dough? That can be done without an attorney, although it is better if you have one. It gets really fun when they don't show up, and they're is a warrant out for the CEO's arrest!
PMSI? (Score:1)
Leave a timebomb in the code... (Score:2)
Sure enough, he had problems collecting, and sure enough, they called in 3 months when they had problems. He agreed to come in to look providing that,
1) They have a check waiting for his unpaid invoce
2) The hours he spent fixing the problem was at an overtime rate and paid onsite. He spent 2 hours playing some UNIX net-game, removed the timebomb, recompiled, and left.
Knowledge is power, and in certain situations you may have to so something unethical to ensure you aren't screwed over.