Contract Clauses

Subject: Contract Clauses
From: Barry West <Barry_West -dot- S2K -at- S2KEXT -dot- S2K -dot- COM>
Date: Wed, 10 May 1995 16:52:07 EDT

Ron Miller wrote in a private post:

>I also always state that I will inform the client before charging extra.

Excellent and very important detail.

In all the time I have contracted, I only had one client balk at the thought of
paying extra. Most clients are reasonable and know when they are responsible
for creating additional work (e.g., review overkill or added functionality).
But it is important to let them know before actually billing them. This does a
couple of things. First, it refreshes their memory about the contract clause
(which they no doubt forget about almost immediately). Second, it gives them an
opportunity to either adjust the way they are handling things or prepare
themselves for the possible extra cost. Simply sending a bill has the potential
for creating problems, since some project leaders have only an absolute fixed
amount they can spend on a project. You need to give these people the
opportunity to modify their approach or modify the project in some way before
demanding extra compensation. If they choose not to, that's their problem.
However, I can't think of any worse PR than handing a bill to someone who
cannot afford to pay it. Not only that, if you know before you do the extra
work that you're not going to get anything more for it, you then have the
opportunity to make some decisions of your own.

BTW also - If you have to provide a fix-price quote, always give a plus or
minus factor. I generally quote a plus or minus 10%. This covers you for
something you may have overlooked, and it is a good way to cover additional
work without having to specifically 'confront' the project people with the
issue of additional costs. I usually downplay the 'plus' end of the quote, but
I always let the client know that it is a possibility because of unknowns.
Don't do this instead of the "extra work" clause mentioned above, but rather,
together with it. On the 'minus' side, you can really impress a client by
billing the minus factor if your work comes way under what you quoted. They
don't expect it, and you become a hero/heroine. This can significantly help
increase your potential for future work.

BTW again - This reminded me of something else. You should also come to an
understanding and agreement with the client of what the deliverable will be. If
they want electronic files, agree on a format. I made this mistake once.
Although the client knew up front that I was going to prepare the document
using Ventura, they really didn't understand what that meant in terms of the
deliverable. When the project was over, they wanted me to deliver the files in
Microsoft Word format. Since I had only specified "computer files" as the
deliverable, I had to convert the files (many hours) before getting paid the
balance of what they owed me.

BTW one more time - never agree to wait until the end of the project before you
get paid. Put a payment scheme in your contract. This could be a periodic
percentage or a scheduled payment for work complete. For example, I usually get
20% up front, 50% at some agreed upon midpoint, and 30% after the doc is
delivered. This way, you can ensure that you won't be shafted completely. If
you stay in the game long enough, there is a good chance you will be. Everyone
has an agenda, so minimize the damage.

Barry_West.S2K @ @ INTERNET

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