I'm looking to hire some developers to help bang out some features of my app that I can't do myself yet. I'm going to be able to give them pretty specific tasks and if they do well continue on and have them do more. Do I need to have a contract for something like this, or is an agreement through messages okay? I might hire 3 developers to do the same task and see which on does it the best/was the best to work with. When's the proper time to use a contract? Is it done through the website or through email, fax, postal? Does it need to have a bunch of protective legal stuff or can it be just informally written up by me and the developer? Is there anything I'm forgetting?
You don't need a contract, but it is very much in your own interests to have one.
Who will own the copyright of the finished work? When? It should be in the contract
What if the work is wrong and you can't agree? It should be in the contract.
What if you want to terminate?
What defines work complete?
What is the payment schedule for bug fixes? What constitutes a bug as opposed to an addition?
Even though most of it should never be needed, it is in the best interests of both of you if something goes wrong. Disagreements or misinterpretations are far too easy if there's just a few informal emails.
(And as an ex-freelance developer, I would never do development work without a proper contract in place)
You don't need to have a written contract, but it is highly recommended to prevent disputes down the road. One of the purposes of a contract is to make sure that the two parties to it have the same understanding of what the agreement is. Oral communications are too easily misunderstood.
I suggest writing up a contract on paper. You can scan and email it back and forth, but each party should print it out, sign it, scan it, and send it to the other.
You should include a bunch of legal protective stuff as well. First, make sure the contract defines the relationship as that of an independent contractor and not an employee. Second, define clearly how and when developers are to be paid.
Use Google to find examples of such contracts and look through a few examples to see other legal stuff that you might want to include as well.
One thing to consider is the location of the freelancer. Remember a contract is only as good as your ability to enforce it.
If someone across the world breaches your agreement do you have the ability and resources (money) to enforce it? If not, perhaps you might consider hiring locally within your reach of enforcement.
If you're not going to have a lawyer write your contract, then my advice is to keep the wording as simple as possible. Don't try to fake legalese and sound fancy. Make it so that a 10 year old child would be able to read and understand what the contract is about.
I hope that helps.
Here's the basics of what you need:
I think Nolo has all the basic legal form templates for these things. If not, Google for them. I'd also invest a few hundred dollars with a local attorney who can review the templates to make sure you're covered your bases properly.
I have a copy of NDA I used when I had a product company. I used it with every freelancer included NDA and some non-compete .
If interested, email me and I will sent it you.
I highly recommend Consultant & Independent Contractor Agreements by Nolo. I read through it and it outlines everything you need in regards to contracts when working with independent contractors (everything mention in the answers before me is covered in this book). It has outline contracts for different types of contractors also: Software, Creative Content, Accounting, and so on. It also goes through the process of breaking the contract down into parts and explaining to you in simple term what each part of the contract means. This book is written for someone just like you :)
Here is an outline taken from the website:
Using freelancers can get you great results and save you money -- but you need to know what it takes to avoid the ire of the IRS while protecting your business and intellectual property. Here's everything you need to:
Disclaimer: I do NOT work for Nolo in anyways, I bought several of their books and they have all been tremendously usefully in helping me start and run my business.