Contracts 101: Negotiating Consulting Agreements in Your Favor
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Confused by independent consulting contracts? This session provides fundamentals of consulting and freelance contracts, and examples of contract pitfalls to avoid. For anyone considering independent contracting, freelancing, or starting your own consulting business. Find more resources for independent professionals at www2.mbopartners.com/ic-resources
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Contracts 101: Negotiating Consulting Agreements in Your Favor
- 1. Contracts 101: Negotiating Agreements in Your Favor Welcome! We will be reviewing a sample contract during today’s session. Download your copy here to follow along: www.mbopartners.com/b/contracts101 The webinar will begin shortly. If you require technical support, please email bbazian@mbopartners.com with your phone and email contact information. 1 Copyright © 2009 MBO Partners. All rights reserved.
- 2. The full screen icon maximizes the presentation area. The “raise hand” icon lets us know you Have a question. We can unmute your line to discuss the question if you are on a phone line or if you have a microphone plugged into VOIP. The chat box allows you to send a question to the presenter. 2 Copyright © 2009 MBO Partners. All rights reserved.
- 3. Contracts 101: Negotiating Agreements in Your Favor May 5, 2009 Dave Putt Vice President, Client Services dputt@mbopartners.com 3 Copyright © 2009 MBO Partners. All rights reserved.
- 4. I am not an Attorney! The items we’ll cover today are some of the same things we look for at MBO Partners when signing consulting agreements with clients on behalf of independent consultants and freelancers. Before you sign a contract, if you don’t understand it, it’s always a good idea to get qualified legal advice. 4 Copyright © 2009 MBO Partners. All rights reserved.
- 5. Our Mission “To make it easy for independent consultants and their clients to work together.” “If you’re thinking about going out on your own, the MBO way is the way to go; just let them handle everything and it will make it easier for you and your client.” Dawn Alexander, Communications Attorney 5 Copyright © 2009 MBO Partners. All rights reserved.
- 6. Overview Agenda for today: Contracts 101 Contract Terms The Basics Dangers Contract Review Negotiations Oddities Questions & Discussion 6 Copyright © 2009 MBO Partners. All rights reserved.
- 7. This is the era of the contract. Handshakes just aren’t enough. 7 Copyright © 2009 MBO Partners. All rights reserved.
- 8. Glossary Powerful words to know: 8 Copyright © 2009 MBO Partners. All rights reserved.
- 9. Non-Compete / Exclusivity: a term under which one party agrees to not pursue a similar profession or trade in competition against another party 9 Copyright © 2009 MBO Partners. All rights reserved.
- 10. Indemnification: a guarantee against any loss which another might suffer 10 Copyright © 2009 MBO Partners. All rights reserved.
- 11. Intellectual Property: Intangible rights protecting the products of human intelligence and creation 11 Copyright © 2009 MBO Partners. All rights reserved. *All definitions from The Free Dictionary by Farlex
- 12. Non-Disclosure / Confidentiality: a contract through which the parties agree not to disclose information covered by the agreement 12 Copyright © 2009 MBO Partners. All rights reserved. *All definitions from The Free Dictionary by Farlex
- 13. Warranty: an assurance by one party to the other party that certain facts or conditions are true or will happen 13 Copyright © 2009 MBO Partners. All rights reserved. *All definitions from The Free Dictionary by Farlex
- 14. Injunction: an equitable remedy in the form of a court order, whereby a party is required to do, or to refrain from doing, certain acts 14 Copyright © 2009 MBO Partners. All rights reserved. *All definitions from The Free Dictionary by Farlex
- 15. Breach: a situation in which a binding agreement is not honored by one or more parties to the contract 15 Copyright © 2009 MBO Partners. All rights reserved. *All definitions from The Free Dictionary by Farlex
- 16. Arbitration: a legal technique for the resolution of disputes outside the courts 16 Copyright © 2009 MBO Partners. All rights reserved. *All definitions from The Free Dictionary by Farlex
- 17. What’s In Your Contract? Scope Term Termination/Renewal Venue; Jurisdiction Price and Payment Assignment Remedies Force Majeure Warranty Severability Limitation of Liability Relationship of Parties Indemnity Compliance with Laws Insurance Ownership of Work Dispute Resolution Notice Change Orders Waiver Compliance w/Local Rules No Other Promises Confidentiality Amendment Complete Agreement Headings Governing Law Counterparts 17 Copyright © 2009 MBO Partners. All rights reserved.
- 18. Beware: Contract Dangers When good contracts go bad: Very limiting non-compete clauses Overbroad indemnities Burdensome warranties Non-payment clauses Undisclosed flow-downs from prime contracts Expensive insurances 18 Copyright © 2009 MBO Partners. All rights reserved.
- 19. Let’s see this in action. If you haven’t downloaded the sample contract yet, you can find it here: www.mbopartners.com/b/contracts101 …or simply follow along 19 Copyright © 2009 MBO Partners. All rights reserved.
- 20. Contract Negotiations How to conduct yourself Know “It’s just business” Ask for what you want, but have a bottom line. Don’t try to guess what your client will agree to Be prepared to walk away 20 Copyright © 2009 MBO Partners. All rights reserved.
- 21. Contract Oddities Liens Bonds Administrative constraints 21 Copyright © 2009 MBO Partners. All rights reserved.
- 22. time for questions ... 22 Copyright © 2009 MBO Partners. All rights reserved.
- 23. Next Steps Visit our Consulting Blog www.mbopartners.com/consultingblog Connect with the consulting community Find MBO Partners on Twitter, Facebook, LinkedIn, YouTube We’ll email the slides after the show Reply to the email to get in touch with MBO Stay tuned for our next webinar 23 Copyright © 2009 MBO Partners. All rights reserved.
- 24. MBO Partners 13454 Sunrise Valley Drive, Suite 550 Herndon, Virginia 20171 1-800-220-0469 www.mbopartners.com Copyright © 2008 MBO Partners. All rights reserved.
Editor's Notes
- During the webinar
- Brief overview of who we are. “Thanks for coming to Contracts 101. Before we get started, if you’re not familiar with MBO Partners, we provide you with a comprehensive business process infrastructure to help make your independent consulting career more productive.Because part of our mission is to promote the independent lifestyle, our goal with this webinar is to ensure that consultants and freelancers can be their own advocates when negotiating their contracts. I’m Dave Putt and I am the VP of Client Services with MBO. I’ve been here XX years… But it’s critically important to note:”
- “Let me make it absolutely clear. I’m not an attorney. Our goal today is to help you as a consultant or contractor negotiate strong agreements with your clients without being intimidated or bullied. I come at this from the perspective of a company executive who has dedicated his career to the business interests of consultants. Our MBO Associates benefit from having Business Managers who review agreements to ensure they are ironclad and that the terms are in the Associate’s favor. But we encourage them to be familiar with the basics of their contract as many aspects will affect them directly during their engagement. Alright, let’s get started.”
- Here’s an overview of our discussion today. There will be plenty of time for discussion and questions at the end. Contracts 101: The basics – overview of contracts and their purposeContract Terms: A glossary – Go through the list of termsNon-Compete/ExclusivityIndemnificationIntellectual PropertyConfidentiality/Non DisclosureWarrantyInjunctionBreachArbitrationBasics:ScopeTerminationPayment TermsInsurancesOther standard covenantsDangers:Limiting non-competesOverbroad indemnitiesBurdensome warrantiesNon-payment clausesUndisclosed flow-downs from prime contractsExpensive insurances
- This is the slide where you’ll discuss the basics of contracts. What is their purpose and why are they so important these days.Bankruptcies, credit problems, it’s a good reason to have a contract.