Friday, October 3, 2014

Avoiding Pitfalls

We've all done it: made a mistake and learned from it. Some mistakes are more costly than others. I've made my fair share of mistakes in my business dealings, and I'm here to share what I've learned with you. Maybe it'll save you the embarrassment or heartaches that I've been through. Please feel free to add any suggestions in the comments section below.

Number one point I can't stress enough is ALWAYS have a contract signed!

In your contract you should specify EXACTLY what the job entails in as much detail as possible. I can't tell you how many times I've said "Mural job" "$price" only to have my client misunderstand and assume the singular "job" includes another. Bad, bad, bad. So, my lesson learned is this: Be exact with details! I wrote that twice, for emphasis.

Agree on price up front. Make certain that your client knows exactly how much they will be paying you, and a deadline for when you will get paid. I highly recommend getting a 50% deposit before you even start to think about the details of any job. Ever. It weeds out no shows and other non serious types.

Set a time frame that is reasonable for YOU. Use your calendars, people. Be professional. Show up when you say you will. If they're not there, you can charge them for your time (yes, put that in your contract, too.) If the client causes you to run over the time you allot to any given project, or to cost more than you quoted, charge them, and make sure to stipulate that in your contract! (I have my contract online if anyone wants to copy it for their own use, it's free, go ahead. Use it. Spare yourself a lot of misery! You read my contract (and copy it to use for yourself if you like) below.

My contract has been tweaked over the years as I've lived and learned the hard way. I'm hoping that this blog (and shared contract) can be used by newbies so they don't have to learn the hard way like I did. Good luck and happy hunting. :)


Design Product Agreement

What is your budget? ________________________________________________

What type of project is this?

What is the objective/criteria for your project?


Date ______________________________________________________________ Commissioned by ___________________________________________________ Purchase Order Number ______________________________________________ Job Number________________________________________________________




(Final Date Due is predicated on receipt of all materials to be supplied by Client)

Materials Supplied by: (date)_____

Initial Version work starts after all materials are received. Due dates, milestone dates, and any early-completion reward dates mentioned shall be delayed by the number of days by which the Materials Supplied by the Client are late.


The material transferred can be used only for the purposes stated below. All other use(s) and modification(s) is (are) prohibited. All rights not transferred remain the property of (Insert your business name here, henceforth referred to as STUDIO). Usage beyond that granted to the Client herein shall require payment of a mutually agreed upon additional "Reuse Fee" subject to all terms.

All materials, including the intermediate milestone deliverables, may not be copied without the permission of (Your Studio).

Any transfer of rights is conditional on receipt of full payment.


Milestone Date Due Payment Due

Contract Signing (50% deposit required)____US$_____________ Delivery of (service or product provided) ______ US$_____________ Total US$ ____________

Client agrees to pay STUDIO a bonus of US$___0___per day in the event an acceptable Final Version of the site is delivered to the Client prior to____0_____ (date).

ESTIMATED DATE DUE: ___________________________

ESTIMATED EXPENSES: _____________________________

The Client shall reimburse STUDIO for all expenses. Expense amounts (in US$) are estimates only.

Illustration __________ Printing (If brokered by STUDIO)_______ Photography __________ Client's Alterations _________ Communication _________ Materials & Supplies__________ Transportation & Travel _________ Type __________ Messengers _________ Stats, Proofing & Copies_______ Shipping & Insurance _________ Mechanicals ___________ Other Expenses _________

Subtotal : ____________

Supervisory and Handling fee: ___0____

Sales Tax (on applicable items): ______

TOTAL : ______________


1. Time for Payment Payment is due at each milestone due date as noted in the Production Schedule. All invoices for Billable Expenses are payable within thirty (30) days of receipt. A 1.5% monthly service charge is payable on all overdue balances of milestone payments and Billable Expenses. STUDIO retains all rights to all intermediate deliverables submitted at each milestone. The grant of any license or right of copyright to the Client is conditioned on receipt of full payment by the Client of the Total amount and all Billable Expenses.

2. Default in Payment The Client shall assume responsibility for all collection of legal fees necessitated by default in payment.

3. Estimates If this form is used for an estimate or assignment proposal, the fees and Billable Expenses shown are minimum expenses only. Final fees and Billable Expenses shall be shown when invoice is rendered. The Client's approval shall be obtained for any increases in fees or expenses that exceed the original estimate by twenty percent (20%) or more.

4. Billable Expenses The Client shall reimburse STUDIO for all direct and indirect billable expenses arising from this assignment, regardless of whether the assignment is Cancelled or Terminated. Billable Expenses include but are not limited to costs of commissioning images or subcontracting talent, software or run-time license costs, the payment of any sales tax due on this assignment, any travel, research, postage and delivery, photocopying, and storage media expenses. The markup charged by STUDIO for supervisory and handling time on all Billable expenses shall be_____percent of the Billable Expenses incurred. The Client shall advance US$_____to STUDIO upon the acceptance of the Design Product for payment of said Billable Expenses.

5. Client's Alterations There shall be no charges to the Client for revisions or corrections or additions made necessary by errors on the part of SES. Any other changes requested by the Client shall be considered Client's Alterations if they are requested after the acceptance of the Design Product. Any changes and additions not due to the fault of SES and requested by the Client before the approval of one of the Site Designs are not considered Client's Alterations. The Client shall be responsible for making additional payments at the rate noted herein for any Client's Alterations and any other changes in original assignment requested by the Client. However, no additional payment shall be made for changes required to conform to the original assignment description. The Client shall offer SES the first opportunity to make any changes.

6. Acceptance Procedures Unless otherwise noted in Acceptance milestone dates of the Production Schedule, during the Review Period within_____calendar days of a Delivery, the Client shall either accept the deliverable and make the milestone payment set forth in the Production Schedule, or provide SES with written notice of any corrections to be made and a suggested date for completion of the corrections which should be mutually acceptable to both STUDIO and the Client, or provide a written notice of assignment Termination if the work is found not to be reasonably satisfactory. The Client can Terminate the assignment only during this Review Period following the Delivery of a milestone deliverable. Any other Termination of the Assignment shall be considered a Cancellation subject to the stipulations of Item 7. SES shall designate _________________________________and the Client shall designate ________________________________________________________________________________________________________________________________________________as the only designated persons who will send and accept all deliverables and receive and make all communications between SES and the Client. Neither party shall have any obligation to consider for approval or respond to materials submitted other than through the designated persons listed above. Each party has the right to change its designated person upon ______calendar day(s) notice to the other.

7. Cancellation The Client may declare the Cancellation of the assignment for reasons not related to assignment Termination defined in Item 6. In the event of Cancellation of this assignment by the Client, any milestone payments made prior to cancellation shall be retained by SES. In addition, if cancellation is prior to the delivery of the Design Comps, a cancellation fee of fifteen percent (15%) of the balance of the Total payments shall be paid by the Client. If the cancellation is later but prior to the acceptance of a Design Comp, a fee of thirty percent (30%) of the balance of the Total payments shall be paid by the Client. If the cancellation is later but prior to the delivery of the Initial Version, the cancellation fee shall be fifty percent (50%) of the balance of Total payments. If the cancellation is after the delivery of the Initial Version, the cancellation fee shall be one hundred percent (100%) of the balance of all remaining dues. Regardless of when the project is cancelled, all billable expenses already incurred by STUDIO, or STUDIO is liable to pay for, shall be paid by the Client in full. In the event of cancellation, STUDIO retains ownership of all copyrights and any original artwork.

8. Assignment Termination In the event that work in process is found by the client not to be reasonably satisfactory in accordance with the Acceptance Procedures in Item 6, the client may pay a termination fee to Terminate the assignment. Any milestone payments made prior to Termination shall be retained by STUDIO. If assignment Termination occurs prior to the acceptance of a Design Comp, the client shall pay a rejection fee of ten percent (10%) of the balance of Total payments. If Termination occurs after the delivery of the Initial Version, the Termination fee shall be twenty percent (20%) of the balance of Total payments. If Termination occurs after the acceptance of the Initial Version, the Termination fee shall be one hundred percent (100%) of the balance of Total payments. Regardless of when the assignment is Terminated, all billable expenses already incurred by STUDIO, or STUDIO is liable to pay for, shall be paid by the Client in full. In the event of Termination, STUDIO retains ownership of all copyrights and any original artwork created by STUDIO. However, the Client retains all rights already purchased by STUDIO on behalf of the Client from third parties.

9. Ownership and Return of Artwork The Client acknowledges and agrees that STUDIO retains ownership of all original artwork, in any media, including digital files, whether preliminary or final. The Client waives the right to challenge the validity of STUDIO's ownership of the art subject to this agreement because of any change or evolution of the laws. The Client shall return such artwork within thirty (30) days of use unless indicated otherwise below:

10. Copy Protection The Client must protect all final art which is the subject of this agreement against duplication and alteration.

11. Credit Lines STUDIO and any other creators shall receive a credit line with any editorial usage. If similar credit lines are to be given with other types of usage, it must be so indicated here:___________________________________________________________________ ________________________________________________________________________________________________________________________________________________

12. Releases The Client shall indemnify STUDIO against all claims and expenses, including reasonable attorney's fees, due to Client's uses for which no release was requested in writing from STUDIO or for Client's uses which exceed authority granted by a release by STUDIO.

13. Modifications of the Agreement Modifications of the Agreement must be written, except that the invoice may include, and the Client shall pay, fees or expenses that were orally authorized by the Client in order to progress promptly with the work.

14. Code of Fair Practice The Client and STUDIO agree to comply with the provisions of the Code of Fair Practice, a copy of which may be obtained from the Joint Ethics Committee, P.O. Box 179, Grand Central Station, New York, New York, 10017, USA, or is available on the World Wide Web at

15. Warranty of Originality STUDIO warrants and represents that, to the best of its knowledge, the work assigned hereunder is original and has not been previously published, or that consent to use has been obtained on an unlimited basis; that all work or portions thereof obtained through the undersigned from third parties is original or, if previously published, that consent to use has been obtained on an unlimited basis; that SES has full authority to make this agreement; and that the work prepared by SES does not contain any scandalous, libelous, or unlawful matter. This warranty does not extend to any uses that the Client or others may make of SES 's product which may infringe on the rights of others. CLIENT EXPRESSLY AGREES THAT IT WILL HOLD STUDIO HARMLESS FOR ALL LIABILITY CAUSED BY THE CLIENT's USE OF STUDIO's PRODUCT TO EXTENT SUCH USE INFRINGES ON THE RIGHTS OF OTHERS.

16. Limitation of Liability Client agrees that it shall not hold STUDIO or its agents or employees liable for any incidental or consequential damages which arise from STUDIO's failure to perform any aspect of the Project in a timely manner, regardless of whether such failure was caused by intentional or negligent acts or omissions of STUDIO or a third party. Furthermore, STUDIO disclaims all implied warranties, including the warranty of merchantability and fitness for a particular use.

17. Dispute Resolution Any disputes in excess of one thousand (1000) US dollars arising out of this Agreement shall be submitted to binding arbitration before the Joint Ethics Committee or a mutually agreed upon arbitrator pursuant to the rules of the American Arbitration Association. The Arbitrator's award shall be final, and judgment may be entered in any court having jurisdiction thereof. The Client shall pay all arbitration and court costs, reasonable attorney's fees, and legal interest on any award of judgment in favor of STUDIO.

17. Acceptance of Terms The signature of both parties shall evidence acceptance of these terms.

Date STUDIO Authorized Signature________________________________ Client Authorized Signature_______________________________ Client's name and title____________________________________