The best legal contract we have ever been asked to sign
We seem to be in contract hell at the moment, having to sign our lives away. But that is a good thing, right? It must mean more work!
For a small business dealing with large global clients, this can be an extremely time-consuming process we have to go through before we can even start any work. Before we get to this point, we have already completed a Request for Information (RFI) and a Request for Proposal (RFP), both of which can include requests for all sorts of detailed information including individual employees’ salaries (which we never disclose). We even had one that requested over 100 budgets for fictitious projects! As you can imagine, hours, days and weeks of effort can go into these.
Recently we received a new contract for review and signature that took us by surprise. To be honest, we were at that here we go again stage, expecting 90-day payment terms and clauses giving exclusive intellectual property rights on everything we do, whether or not it’s for them. But to our pleasant surprise they were nowhere to be found. It was probably the most fair and well-constructed contract we’ve received to date.
To keep within the terms of the agreement we have changed the details a little, but here are the highlights.
1. Payment Terms
30-day standard as well as the agreement to resolve any problems in invoicing within a very short period.
Payment terms are the usual contentious issue and it is not unusual to find 90-day payment terms from the date of invoice, which always seems a little unfair on having to wait for three months to be paid for work you started six months ago. If only we could get our staff to agree to payments of their salaries in the same way.
2. Insurance
This is straightforward: we have to cover our side and they cover theirs, all with realistic levels appropriate to our business.
Our broker reviews all our contracts and constantly points out we cannot insure our client’s liabilities, no matter if it is in a contract or not. Apparently this is UK law.
3. IPR (Intellectual property rights)
The contract demonstrated an understanding that the client cannot own all IPR, only on what we produce for them and then not always all of it. A simple example of this is when we are on a limited budget and the project needs the use of library photography. Surprisingly, they cannot have exclusive full worldwide rights! They also can not own the rights to the code of the software we use — we have asked Adobe but, astonishingly, they won’t hand it over!
4. Termination
We both have the right to terminate the contract under the same reasonable grounds.
This is very different to a 30-day notice period with no reason needed, where we have no rights whatsoever. So why are we discounting rates and signing a three-year deal?
5. Self promotion
All we need to do is ask for permission. It doesn’t mean we will get it, but it seems reasonable.
As we take these clauses very seriously, not being able to claim work that is in the public domain or even say we work with certain clients constrains our ability to offer stability, especially as prospective clients always ask who we work with and if we can share examples of what we’ve done. New work is the lifeline that keeps us all fed.
6. Language
This was written in simple, easily digestible language that we understood straight away. There was very little ambiguity. Maybe someone has been taking advice from some of our health literacy work!
We would like to thank our client for such a straightforward way of doing business. Starting the working relationship on a positive, energetic note has resonated within the agency, and we look forward to doing some great work with them.
