View Full Version : Conditions of Engagement


tdmc
16-11-2006, 22:38
I cross a number of professional areas and provide varied services to clients so Institute or Profesisonal Assoc Conditions of Engagements dno't suit.

A few years back i developed by own, had it reviewed (legal) and have used it successfully, updating from time to time.

I posted a reply in the thread on Copyright which had a good response.

here's another extract from my standard condiitons of engagement - it relates to payment gurantees - and it works! On a few occasions clients have tried to avoid paying, but when confronted with this clause they find they cannot get out of the agreement (legally!)

Again, fee free to use and adapt.....

03.9 Guarantee
If at any time default shall be made in payment by the Client, the person whose signature appears on behalf of the Client, agrees to indemnify the Consultant against the loss of fees, costs and charges and be responsible for the payment of same.

Anyone have others?:cheers:

Nick Fox
16-11-2006, 22:44
I'm not to sure that your guarantee is lawful. If the client is a company then you'd be essentially holding an employee liable for a debt of the company.

cacapis
16-11-2006, 22:56
I'm not to sure that your guarantee is lawful. If the client is a company then you'd be essentially holding an employee liable for a debt of the company.
But if the employee signs a document holding himself responsible for the company he works for it's not one's problem at first.
Here the best thing to do when starting a project is to sign a contract (not everybody does it though) that states when and how the payments have to be done and the possibilities of change as well as cancellation.
We even have something called "tacit contract" wich is for when you don't have an actual contract and you can prove you did work for somebody. With that you can start legal actions and claim your payment.

tdmc
16-11-2006, 23:25
It's usually the "small" clients that are a problem - individuals hiding behind a company that they have created - so they can say"oh, it's not me that has the debt, it's the company" and THAT is a problem is you are trying debt recovery from the client and the company, stangely has no money.

Yes it is legal - it's been tested and it works. It is similar to a director's guarantee (common when taking a loan etc). If they don't want to sign it - then i have suspicions and don't take the project on.

If a client won't sign an agreement, particularly one that is "tight" in terms of patments being required, then maybe the client was never goping to pay for the work anyway!

tdmc
16-11-2006, 23:26
cacapis - yes we should always have a written and signed agreement before we start - it doesn't always happen though!

The times that I don't have one are the times that it's hardest to get the fees out of a client!

tdmc
16-11-2006, 23:28
Nick, if the client is a compnay and doesn't want to pay, then the person who signed is responsible for incurring the debt - siple. Either they had the authority to sign and it wasn't a problem, or they are trying to wriggle out of payment. With larger corporations it's not an issue - with the single person company it can be.

Anyway - I'm up front about it and expect my clients to be the same - if they are not I wonder whether it's worthwhile taking on the job!

Nick Fox
16-11-2006, 23:52
Nick, if the client is a compnay and doesn't want to pay, then the person who signed is responsible for incurring the debt - siple. Either they had the authority to sign and it wasn't a problem, or they are trying to wriggle out of payment. With larger corporations it's not an issue - with the single person company it can be.

Anyway - I'm up front about it and expect my clients to be the same - if they are not I wonder whether it's worthwhile taking on the job!

So what you're saying is that if say the secretary for the company is authorised to sign documents and signs the contract then they are liable for the company's debt? I think that the person signing needs to be a director of the company as they can be held liable so that's perhaps something to check before a contract with a company is signed.

I can see how it works where the person is not signing is an individual and not a company representative but you'd need rocks in your head to sign a contract with such a clause. Has this ever been tested in court? I'd be interested in reading it.

tdmc
17-11-2006, 00:44
Nick, believe me it works - don't get too caught up on the corporate stuff. Put simply, someone signing on behalf of the company presumably has the authority to do so. If they don't have the authority to spend the company's money, or the compnay doesn't want to pay - then the person signing the engagement is responsible for the debt. Really simple. It puts payment responsibility back on the person I deal with not some distant company - it's not my concern who pays, just that i get paid.

In the past two years there have been two occasions where i have done work, the client hasn't paid, and I've needded to start legal action to recover. What happened in both cases was their lawyers looked at the agreement, realised they couldn't get out of it and wow - cheque arrived in the mail.

Remember, if they don't like it they don't have to sign - take their work somewhere else - it's all about honesty and a good relationship, not starting out a project knowing that you will need to force the client to pay!