Are There Legal Risks in Doing Engineering Side Work Without a License?

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Discussion Overview

The discussion centers on the legal implications of doing engineering side work without a license, particularly in the context of freelance work for a small company. Participants explore concerns about liability, business licensing, and contractual obligations, as well as the potential for profit-sharing and patenting ideas.

Discussion Character

  • Debate/contested
  • Technical explanation
  • Conceptual clarification

Main Points Raised

  • Some participants argue that one does not need a FE or PE license to do freelance engineering work, suggesting that liability typically falls on the company producing the product rather than the individual designer.
  • Others emphasize the importance of having proper paperwork to absolve oneself of liability once the design is handed over to the company, highlighting the designer's responsibility for public safety in their design choices.
  • There are suggestions to consult a lawyer to clarify contractual terms and ensure protection against potential liabilities, especially regarding profit-sharing or patenting the work.
  • Some participants mention that state and local laws may require a business license, and that liability issues can arise regardless of contractual agreements.
  • A few participants raise questions about the necessity of licenses for starting a small engineering company, particularly in specific fields like automotive electronics.
  • One participant expresses interest in learning more about the legal aspects of engineering entrepreneurship and seeks resources for legal documentation.

Areas of Agreement / Disagreement

Participants do not reach a consensus on the necessity of licenses for freelance work or the best practices for managing liability. Multiple competing views remain regarding the legal requirements and implications of side work in engineering.

Contextual Notes

Participants note that laws vary by state, and there is uncertainty about the specific legal requirements for freelance engineering work and business licensing. The discussion reflects a range of opinions on liability and contractual obligations without resolving these complexities.

Who May Find This Useful

Individuals considering freelance engineering work, students studying engineering, and aspiring entrepreneurs interested in the legal aspects of starting a business in the engineering field may find this discussion relevant.

david90
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A small company asked me to engineer a product for them. It's a electrical/computer related product.

Will there be any legal implication if I do it for them because I don't legally own a business. I don't even have FE or PE license. I just a guy with a BS in computer engr.. I don't want to start my own business right now. Ideally I just want to do some sidework to supplement my income.:smile:
 
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david90 said:
A small company asked me to engineer a product for them. It's a electrical/computer related product.

Will there be any legal implication if I do it for them because I don't legally own a business. I don't even have FE or PE license. I just a guy with a BS in computer engr.. I don't want to start my own business right now. Ideally I just want to do some sidework to supplement my income.:smile:

Doing side work is cheating on reputable compananies, it is cheap enough to
start your own (legal) company, but if you want to (cheat the system) go ahead and be a Dell boy, i am sure the irs will not notice.:smile: i would do it in a heart beat, but i know i would be caught.
 
You don't need the FE or PE to do freelance work.

The product liability is usually covered by the company producing the product. In the US liability rests on the company and not on the employees unless serious negligence can be proven. In your situation, I think it would depend on how you sell your design. I would think that for the sale you should have some kind of paperwork drawn up that obsolves you of liability issues once the company relieves you of the design. As the designer, it is your responsibility to make sure that public safety is maintained as far as you can in the design, i.e. materials selection, toxicity, etc...What the company does with it after that is out of your control.

Just make sure with the company before you sign anything that you are covered. If you are truly worried, drop a hundred bucks and have a lawyer look it over.
 
Anyone can be self-employed. They'll pay you with a 1099 and you just fill out a Schedule C on your tax return. You don't need to be incorporated.

Like Fred said, though, just make sure you know what you are signing. If they give you an ugly looking contract, have a lawyer look over it.
 
David, I'd recommend talking to a lawyer even without liability issues. You should be clear in advance about the renumeration schedule. If it's just some little doodad with a single purpose for the company, then a single flat payment is appropriate. On the other hand, it might be something that they can make a lot of money from, such as an industry-altering modification to existing equipment or a brand new product. In that case, you should consider asking for a percentage of whatever profit is generated. Alternatively, you could patent the process or product and license the client to use it. An attorney can advise you as to which approach is in your best interest. It's worth a few bucks to be sure.
 
FredGarvin said:
You don't need the FE or PE to do freelance work.

The product liability is usually covered by the company producing the product. In the US liability rests on the company and not on the employees unless serious negligence can be proven. In your situation, I think it would depend on how you sell your design. I would think that for the sale you should have some kind of paperwork drawn up that obsolves you of liability issues once the company relieves you of the design. As the designer, it is your responsibility to make sure that public safety is maintained as far as you can in the design, i.e. materials selection, toxicity, etc...What the company does with it after that is out of your control.

Just make sure with the company before you sign anything that you are covered. If you are truly worried, drop a hundred bucks and have a lawyer look it over.

Would you need FE and PE if you want to start a small company that engineer electronics for automotive ?
 
State and/or local laws may, and most likely do require that you file for a business license.

Depending on the situation, what can matter when people start suing people is who gets sued, not what the contract says. A contract between you and your customer is not an agreement between you and their customer. If they get sued, you could still be named. There is no such thing as liability free work when you're on your own.
 
david90 said:
Would you need FE and PE if you want to start a small company that engineer electronics for automotive ?

Use the word "engineering", and not "Engineer", and you can avoid many problems, but this can be a risky business.
 
I would like to know more about this topic. I am studying engineering myself and would like to be an entrepreneur when I graduate. Would there be also some of this legal documentation freely available on the net as samples?
 
  • #10
The laws vary from State to State. The best way that I know to learn the local laws is to see a good lawyer. You might also seek out entrepreneurs in your area: Attend meetings, network, work for a company that does something that you would like to do - seek out an internship - and in general, find ways to learn what you want to know, and how to do what you wish, from the people who are doing it.
 
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