Consultant work: definition of reasonable expenses

[riverdale]

I am preparing to begin work as an "independent contractor" and have some questions pertaining to the language in the contract I was presented. For one thing, it states that "Expenses will be reimbursed for reasonable travel, auto rental, lodging, meals, and other out-of-pocked expenses incurred by the consultant."
If there is a dispute, what is the legal definition of "reasonable"?
There are other things I have questions about as well, but let's start with that and see if anyone is able to provide useful information. Thank you in advance.

[DrDan]

1. there is a Personal Finance forum - looks like a great question to pose there

[rfranklin]

2. That's a weasel word put in there by lawyers...

Reasonable will be whatever they decide they will pay for. If you can, add clauses that stipulate what the maximum reimbursable for each category. Otherwise a yurt, a Yugo and a yogurt may be what you get.

[elleng]

3. In most situations, 'reasonableness' would be determined

based on the particular industry/market one is in, so if an issue arises, one can do comparables.

[librechik]

4. Those are normal expenses required to do your job.

However, if you raid the mini bar and suck up $150.00 of Tanqueray at the hotel, that's something you have to pay for, not the boss. If you ate dinner at the hotel that's on the boss--unless you invited a bunch of personal acquiantances over and they all ate with you--that's your expense, not your boss's, (unless you were scheduled to take them all out to dinner and it was part of your presentation. That's on the boss.) Most employers set a daily limit (per diem) on how much they are willing to pay you for meals. Ask in advance. In-room movies are your expense, not the boss's. Most hotels will give you a folio (a bill) which is just the room expenses and taxes, with all your extras on a separate sheet so the boss never even has to see those. If you have to rent a movie to show your clients, say "Sicko" for a healthcare client, that expense is on your boss.

BTW, the definition of reasonable is always the boss's definition, not yours. Ask in advance, or be prepared to eat some expenses if boss finds them unreasonable.

Taxis to and from work related expenses are your boss's expense--but if you are too grand for taxis and demand a car and driver, you will have to work that out in advance with the boss. Dan Rather gets a limo, associate director Pinhead takes a taxi.

Mileage is paid by your boss, unless you took a roundabout route that had nothing to do with work, and included a stopover at the spa, That's your expense, not the boss's. However, just driving back and forth to the worksite is most often your expense, not the boss's. But it's worth asking about nowadays.

I do the travel expense reports for my company and that's the gist of it. Ask me anything.

[MineralMan]

5. There's no legal definition.

In most cases, expenses directly connected to your consulting work are will be reimbursed. However, extravagant meals, really expensive hotels, and similar stuff will be rejected by most companies. It all is relative to the kind of work you're doing. If you're consulting on an executive basis, then the level of amenities rises to that used by other executives at the company. If at a lower level, you'll be expected to reduce the cost of those amenities.

Whether you stay in a Super 8 or a four-star hotel depends on the level of expertise you bring to the table. It's really a common sense thing. What I've done, in the past, is to ask the company what hotel they recommend I stay in when I'm in their city. Don't mention price. Just ask for a hotel name. Then stay there. They recommended it, so they'll pay. Even better, get them to book and pay for your stay.

If you rent a car, pick from the middle of the rate spectrum, as a general rule. When you eat in a restaurant, don't order the expensive wine, and avoid the highest-priced thing on the menu. It's pretty simple really. Use common sense.

If you do that, and they quibble with you about expenses, reconsider the wisdom of consulting for them. Moderation should be your guide.