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Episode 7: Essential Contract Clauses for Service Based Companies - Part 1
Friends! This is one of my favorite things to talk about… contract clauses! Haha, I’m sure you’re not as excited as I am, but I promise you that once you listen in to these episodes you’ll be much happier than before and a smarter business owner because I’ll easily explain the most important clauses you need in your service contract and why they’re important to have. I’m also going to break this episode up into a two-part episode series. Today is part 1 and next week will be part
In this episode we talked about:
• The mention of the Entire Agreement Clause (The “Biggie”), Description of Services Clause, Venue and Jurisdiction Clause, Severability Clause, Transfer Clause, Billing Structure Clause, Intellectual Property Clause, Counterparts and Facsimile Signature Clause, Communication Clause, Indemnity Clause, Arbitration Clause, A Cancelation and Rescheduling Clause, and a Force Majeure Clause.
• The importance of having an Entire Agreement Clause to every contract.
• Description of Services Clause: Provides details about the work that is going to be done or the services that are going to be provided and then the result that should be expected from your client.
• Venue and Jurisdiction Clause: States where a legal dispute should be resolved if one were to come up.
• Severability Clause: If one of your clauses in your contract is found to be invalid, that the remainder of your contract stays intact.
• Transfer Clause: Allows your client to have a say in who you transfer your obligations to if any situation were to arise and vice versa.
• Billing Structure Clause (“Fee Structure Clause”): Lays out all of the fees, ongoing rates, whether you bill by the hour or by the project, if there is a deposit or retainer (I mention the difference between deposit and retainer), how many of their payments they have when those payments are due, what happens if you have a late payment, how often are you going to get charged a late fee and then what services they are actually paying for, and more!
Here’s a few quotes that we thought were awesome:
<9:27> “You don't want to like be hauled into court in New York City and have to deal with all of the legalities and costs of getting out there so you need this in your contract because you definitely don't want your client to potentially sue you in a different state.”
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