Penalty clause on programming contract

Question

I am considering the move to the other side of development, as a contract programmer.

SO has given me a good few hints on the kind of figures to quote ( and why ), and a few points to bear in mind such as Non-competition and [IP Protection]

Having worked as a programmer for a while, I know that a few reasons for deadline delays may be -

1. Estimates can be all over the place both from the Contractor, and the Job provider
2. Things like bandwidth bottlenecks, merge for high-impact code etc
3. Clarification time on provided requirements... etc

If you have worked as a contract programmer then

• How frequently do you encounter a penalty/forfeit clause in your agreement?

• What do you deem unacceptable in the penalty/forfeit clause?

Answer 1

Never

worst-case scenario: late delivery foregoes early-completion bonus

and you'd better have Acceptance Tests well-specified in advance of signing the contract!

Answer 2

Steven is right. Never give a customer an excuse for penalizing your work. Your own question already lists reasons as to why and how a customer might be culpable in delaying your own delivery. In other words, adding any kind of penalty clause into a contract will create a perverse incentive for the customer to delay you.