Kill Fees and Six Other Clauses to Consider for Your Contract
I’m not an attorney, but I have read through more than my share of agreements, both for my own business and on behalf of my clients. There are some clauses that are vital, especially when you are providing contracted services. Here is a breakdown of some of the big ones and why you may want to consider working them into your agreement.
A kill fee is simply a cancellation fee. This is particularly important for designers and developers because it specifies that you will still get paid for all work completed to-date, even if a client cancels the agreement. Most kill fee clauses are worded to protect the contractor and ensure they get paid, regardless of the reason the client cancels.
This clause should clearly state that you are an independent contractor and not an employee of your client’s organization. It’s an important clause because it ensures that you are not entering into a non-exclusive arrangement, gives you control over how and when you work, and states that you will not receive benefits from the client. Basically, this clause protects you and your independent status. For more about the employee vs. self-employed confusion, read: Who Are You? Employee or Self-Employed?
Many times this clause is worked into the Independent Contractor clause, but it’s so important that there is some value in giving it its own paragraph. It should reiterate that you are not providing services exclusively to the client and that you have the right to perform services for other clients during the term of the contract.
The Indemnity clause is considered a “hold harmless” clause because it states that you are not an agent of the company. Essentially, it protects you as the contractor from future losses or damages experienced by the client.
This clause is one that is meant to afford protection to the client and their knowledge capital. It states that as an independent contractor, you will not divulge confidential or proprietary information that you encounter as part of your working relationship.
A warranty states that you will do certain things in a certain way and that the client can have certain expectations about the result of your working relationship. This can apply to stating that you will provide services that are consistent with high-quality standards in the industry. It can also specify any support services, troubleshooting and bug fixes you will provide as part of your agreement. If you do include a warranty, it’s important to limit the term and be very specific about what is included.
The ownership clause is an especially important one for those in the creative and technical fields because it specifies who owns the final product as well as the working files that were used during the course of the work. This clause can also outline what rights you have as the contractor to use the work and related images in your portfolio. It can also provide permission to include a credit line, stating who did the work, on the final product.
There are other important clauses that should be in your agreement, but these are among the most important ones. Please note that this shouldn’t be considered legal advice and it’s always best to consult with an attorney in order to make sure your contract is bulletproof.
What other clauses do you think are most important to include in a contract?
Image credit: Steve Woods