Let's talk about boilerplate. What the hell is boilerplate? Boilerplate is the stuff that exists at the end of your contract and it's really important, and this is the kind of stuff that kind of looks the same all the time, right? You'll see it and probably every agreement that you've ever entered into you'll see these same clauses limitation of liability is cause warranties, entire agreement, modifications, waiver these are the kinds of things that you see there, and these things protect your business, so for example, the limitation of liability is cause creates a situation where it limits your liability under the agreement, no matter what the circumstances. So if you have a dispute with a client and it gets ugly, you can limit the liability teo the value of the contract. So if the services were worth five thousand dollars, you can't be sued for more than five thousand dollars as long as you've got a valid limitation of liabilities clause okay, and there's some circumstances, some nua...
nces to this, but for the most part, for our purposes today, you want to have this in your contract. The other thing you want to have his recovery of litigation expenses if you've got to take a client to court, for example, if you do a bunch of work and they don't pay you in the end on you have to take them to court for you want to make sure that you can get your attorney's fees covered because attorneys fees are not cheap, so you have to take someone to court, you're gonna have to hire a lawyer to help you do that. You're gonna have to pay their bill, and so you will get reimbursed for that. If you take them to court and win independent contractors. This is really important, especially if you're a freelancer and working alone, or even if you have a small shop, you want to make it clear that you do. You are not an employee of the client very, very important, especially if you have a big client who's like a large business, this can get kind of funky and confusing. One of the reasons you want to make that clear is because that effects ownership of your intellectual property if you're considered an employee of one of your clients, for example, well, guess what as an employee, any intellectual property you create as an employee belongs to your employer. They're right. We already talked about how you want to preserve the rights to the I p as much as possible, so you want to be in a situation where you're handing off the copyright accidentally because you're in a relationship that looks like an employee. Employer employee relationship now there are a lot of state employment laws that affect this okay so that's why you want to have the claws right in writing make it super clear that this is not an employee employee employer relationship that this is a contractor relationship okay very important warranties this is what I call the pinky swear clause where you're just basically saying that you are warranting that you are going to provide professional design services of a professional quality that's the only thing you wanna warranty and then your clients are probably going toe warranty that they are you know legally able to enter into that contract with you that they are capable of making the payment and things like that and then this entire agreement modifications and waiver clause incredibly important for designers because there is so much scope creep right in design work there's so many times when and I've done this I've done this as a client of designers you decide oh you know what I need a new website and I also want you to help design this new pdf that's going to be the menu opt in and then I want like all these social media promo images too ok and you give them a fee for that and then they're like oh but I also want to design this other e book and then also I need like twenty more promo images and also I need this membership site designed okay well that's different and that's a different set of fees right? So I like we said you want to make it very clear in the contract with the delivery bubbles are and then you want to make sure that this language is in there which says that this is the entire agreement between us there is no editing there is no modification um there's no modification happening unless it's in writing and signed by both parties so this makes it so that you're not inadvertently in conversation agreeing to things that you don't want to be agreed teo like doing additional work and not getting paid for it this is also the last bit of boilerplate that I want to go over with you that is really really important in this day and age we're working with people all over the country write all over the world I have clients who are in bangladesh you know I have clients who are in costa rica I've climbed all over the world and I'm sure you do as well when you work you know when you're doing work that can be delivered in tangibly right if you're doing work that is mainly creating intellectual property you can deliver it virtually which means that you can work with people all over the world and when you do that that means that there's a lot of different laws that are being triggered so if you're a new york design studio when you're working with a client who's based in texas, which law applies to that transaction, if there's a problem, right? Which states law do you have to comply with? This is how you know, with the governing law venue mediation, kloss and this is an actual clause from one of the contracts that's included in our small business bodyguard template, and I pretty much include, ah, clause, that looks very similar to this for every single clients contracts, almost every contract that I create includes a mediation clause specifically as well, so we'll talk about that so first let's talk about the governing law so let's read this this says this agreement shall be construed in accordance with and governed by the laws of the state of insert your company state. So in my case, my companies formed in new jersey, let's say, in the state of new jersey as applied to contracts that are executed and performed entirely in the state of new jersey. So what is that doing that's essentially saying, hey, no matter where the hell you're located, we're going to treat this contract like we're both new jersey companies, and we're going to make it so that you can on lee su in new jersey, the exclusive venue for any court proceeding based on or arising out of this agreement shall be insert companies, county ends or companies right so that means you got to come to bergen county new jersey if you want to sue me ok and so that makes it so that you're not hauled into court in texas because you have a dispute with the texas client so really protects you and it makes it so that you are only responsible for knowing new jersey law you don't have to figure out the laws of all the state you know so here's another piece of that this is the mediation clause the parties agreed to attempt to resolve any dispute claim or controversy are rising out of or relating to this agreement by mediation which shall be conducted under the then current mediation procedures of the c p r institute for conflict prevention of resolution or any other procedure I want upon which the parties may agree so this is saying that any disputes that we have if we can't resolve them on our own we've got to go to mediation and let me tell you what mediation is in case you're not familiar mediation is where you sit down you and the party that you're having a dispute with with a third party neutral this is somebody who's not doesn't know either of you personally not connected to you in any way a mediator is trained to help you resolve disputes now they work in family court they worked in you know, commercial settings mediators work in all different kinds of context this is a really powerful tool for you as a small business owner to protect yourself and avoid litigation because litigation is very very expensive lawyers love doing litigation because it makes them a lot of money okay but it's not good for you as a small business owner because you're paying a lot of money and you never know what's gonna happen you go to court and you can't tell for sure what the judge is going to do and so you're putting your livelihood in your business in a judge's hands if you can avoid that you know there are times when you absolutely have to go to court and that's all there is to it but that doesn't apply to every single dispute so if you have a dispute with a client you want to have a mediation clause in there and you can specify an institute like this this is a well known mediation institutes you can you can hire them it's like a fifteen hundred dollars fees to hire mediator you split the fees between both parties and you sit down for a day and try to work it out and the great thing about that is you can come up with creative solutions right in court the only thing that you can ever get on ly thing that you're ever gonna win is money in court with mediation you can come up with clever, unique ways creative ways to resolve disputes for example you might have a situation where a client is not pleased with the work that you did, and there was a big dispute about it. And they want a bunch of money from you that you can't afford to pay, so you can't pay them with money. But you can pay them, maybe with other services, or maybe you, khun, you know, repay them by connecting them with somebody that they really want to get connected with, you know, creating a valuable relationship for them there's all kinds of ways in which you can bring value to a situation and same thing for your clients. So this creates creative ways for you to resolve. Disputes always always have a mediation clause in there, because let me tell you, fifteen hundred dollars sounds like a lot to resolve the dispute. You have no idea that's probably like three hours of a lawyer's time for litigation and trust me. Litigation khun take thousands of hours. So now you're getting the sense of how much it cost to resolve legal disputes. So always included mediation clause in your contract.