Too busy (or lazy) to read this whole book? Below are ten key issues to consider in any Service Agreement.
Remember: every project is different. What might be mission critical in one deal could be a non-issue in another. So be sure and consider the client, the project, and your business before deciding your priorities.
- Excluded Work. Sometimes the best way to describe what something is, is to describe what it is not. Use exclusions in the SOW to define your scope properly. Without key exclusions, Clients will often think anything related to the project is included in the fee.
- Assumptions. Use the SOW to spell out the assumptions behind your fee and the consequences if the Client fails to meet those obligations. Are you assuming the client will approve the creative brief by next Friday? Say so. Have a deadline for when Client content is due? Make it explicit. Does your project require a consistent client team? Put it in black and white. And once you’ve listed all those things, make clear that if the client misses an obligation or an assumption fails, that the Agency can adjust the fee and calendar accordingly.
- Avoid Payment on Client Acceptance. Avoid clauses that say the Client pays after it has accepted the work. Using acceptance as the standard for payment gives the client a backdoor way to ask for additional work under the guise of the work not being acceptable. Better approach is to trigger payment on delivery. For more on this, see Fees, Costs, and Invoicing.
- No Rights Until Payment. Whether you are transferring ownership of your work to the Client or licensing use, make clear that those rights don’t transfer until Client has paid in full for the applicable deliverable. Find more on this in this book’s section about Intellectual Property.
- Suspension or Termination for Breach. The contract should include a clause allowing you to stop work or terminate the contract if the Client fails to make payment when due (after any applicable grace period). The right to stop work or terminate should also apply if the Client materially breaches the agreement. This subject is discussed further at Term & Termination.
- Portfolio Use. You do not need to retain the copyright in your work to have portfolio rights. Instead, you just need a good portfolio clause. For projects that will be released to the public, make sure the portfolio clause allows you to use the Client’s name, the Client’s logo, and images of the work in your portfolio, social channels, and submissions for awards and recognition. Learn more about prtfolio clauses in the section aboutOther Provisions .
- Cap on Liability. Ideally, the contract will contain a conspicuous (bold, all caps) clause capping potential damages to no more than the total fee paid to you by the Client. It’s fine if this clause also benefits the Client. Learn about this important clause in Limitation of Liability and Disclaimers.
- Proper IP Indemnities. Make sure that any intellectual property indemnity (or representation) in your agreement has a proper scope. Promises regarding intellectual property liability should be limited to Designer’s knowledge. If you do logos and naming, you should also be sure to disclaim responsibility for trademark clearance searches. See the section on Indemnification for more information.
- Disclaimer of Warranties. To avoid ambiguities about the promises made about your work, be sure to include a conspicuous clause that states that other than as expressly provided in the agreement, the work is provided AS IS. Read more about this type of provision at Limitation of Liability and Disclaimers.
- Attorneys’ Fees. Include a clause that says the prevailing party in any dispute can collect its attorneys’ fees from the loser. More about legal fee clauses can be found in Boilerplate.
That’s the quick version. While no checklist is a substitute for proper legal review, this should get you thinking about the right things.
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