Every contract should address at least 12 issues as outlined below. These points should be discussed and agreed upon by a prospective client.
Sample contracts available for print:
Principle # 1: Identification of the Parties to the Agreement
Questions to discuss with your client:
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- Who are the parties to the Agreement?
- Are the services provided by the consultant being provided personally by the consultant or will the services be provided primarily by others in the consultant’s firm?
- Is the client an individual and/or other entity (e.g., a campaign committee)?
- Who is responsible for payment? (See also Principal #10 below)
Sample language:
Sample 1: This Agreement is between Sam Smith for Congress, (hereafter “Committee”) and Acme Consulting (hereafter “Contractor”).
Sample 2: This Agreement is between Sam Smith, a candidate for Congress, his principal campaign committee, “Sam Smith for Congress” (hereafter “Candidate”) and Acme Consulting (hereafter “Contractor”).
Sample 3: This Agreement is between Sam Smith, a candidate for Congress, his principal campaign committee, “Sam Smith for Congress” (hereafter “Candidate”) and Acme Consulting, through the personal services of its President, Jane Doe (hereafter “Contractor”).
Principle # 2: Term/Duration of the Contract
Questions to discuss with your client:
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- When does the Contract start (i.e., when do the obligations of the contract commence)?
- When does the Contract end?
Sample language:
Sample 1: The term of this Agreement shall commence on January 1, 2014, and shall continue until December 31, 2014, unless terminated by either party pursuant to this Agreement.
Sample 2: The term of this Agreement shall commence upon execution of the Agreement by Client, payment of the first invoice provided by Consultant, and shall continue until the Agreement is terminated by either party pursuant to this Agreement.
Principle # 3: Termination Before the End of the Contract Term
Questions to discuss with your client:
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- What events can cause termination of the Agreement before the anticipated end of the contract term?
- Can either party cause termination at will (i.e., for no reason)?
- Should termination of the contract be limited to “cause” (i.e., a good reason)?
- Should there be compensation in the event of early termination?
- How can the parties terminate the agreement?
Sample language:
Sample 1: This Agreement may be terminated upon mutual agreement or by either party upon written notice with or without cause. Committee shall pay Contractor all sums earned and expenses incurred through the date of termination.
Sample 2: This Agreement may be terminated upon mutual agreement or by either party upon 30 days written notice with or without cause. Committee shall pay Contractor all sums earned and expenses incurred through the date of termination.
Sample 3: This Agreement may be terminated upon mutual agreement, or by either party, upon written notice of “cause” to terminate. For purposes of this section, “cause” means the material and continuing failure to perform the party’s essential duties hereunder; dishonesty; gross misconduct; fraud; misrepresentation; acts of moral turpitude; criminal conduct; or a material breach of any term of this Agreement.
Principle # 4: Duties/Obligations of the Parties
Questions to discuss with your client:
- What specific services are you going to provide the client?
- Are there services that you are NOT going to provide that the client might think you are?
- Besides payment of invoices, is the client responsible for anything else?
Sample language:
Sample 1: Committee agrees to retain Contractor to provide general campaign managements services in connection with the 2014 primary election for the 2nd Congressional District in Anystate.
Sample 2: Committee agrees to retain Contractor to provide general campaign managements services in connection with the 2014 primary election for the 2nd Congressional District in Anystate. Contractor agrees to provide a campaign budget and plan to Committee for its approval. Contractor shall have no obligation to provide fundraising services in connection with the campaign plan and budget.
Sample 3: Committee agrees to retain Contractor to provide general campaign managements services in connection with the 2014 primary election for the 2nd Congressional District in Anystate. Contractor agrees to provide a campaign budget and plan to Committee for its approval. Contractor shall have no obligation to provide fundraising services in connections with the campaign plan and budget. Committee shall use its best efforts to raise campaign funds based on the approved budget and shall notify Contractor immediately if it determines that it is necessary to revise the budget based on actual fundraising.
Principle # 5: Contractor’s Legal Status
Questions to discuss with your client:
- Will the Contractor be an “employee” or “independent contractor” to the client under applicable laws of the state in which the services will be performed?
- What is the legal liability of the parties if that status is challenged at a later time? (Note: most state laws impose liability on the employer regardless of any agreement to the contrary.)
Sample language:
Sample 1: Contractor shall not be considered an employee of Committee, and shall indemnify Committee for any loss, claim or liability from any federal or state income tax, social security, employment or disability payment imposed on Committee.
Sample 2: Contractor shall be considered an employee of Committee, subject to all applicable employment laws.
Principle # 6: Compensation
Questions to discuss with your client:
- How much will the client pay you for your services?
- Will you provide a detailed invoice for services rendered to your client?
- Will you charge interest on unpaid or late paid balances?
- What is the role of commissions in your total compensation?
- How are commissions calculated and paid to you?
- Is the client responsible for tax or other government withholding?
Sample language:
Sample 1: Committee shall pay Contractor $10,000 per month on the first of each month during the term of this Agreement.
Sample 2: Committee shall pay Contractor a total of $100,000 for services rendered pursuant to this Agreement. The first installment payment of $10,000 is due upon execution of this Agreement, and nine subsequent payments of $10,000 shall be due on the first of each month pursuant to a monthly invoice issued by Contractor.
Sample 3: Committee shall pay Contractor a total of $100,000 for services rendered pursuant to this Agreement. The first installment payment of $10,000 is due upon execution of this Agreement, and nine subsequent payments of $10,000 shall be due on the first of each month pursuant to a monthly invoice issued by Contractor. Payments made 30 days after the due date shall be considered late payment and Contractor shall be entitled to charge interest at the rate of 10% on the unpaid balance per month.
Sample 4: Committee shall pay Contractor the sum of $10,000 per month, on the first of each month, during the term of this Agreement. In addition to the monthly compensation, Contractor shall be entitled to standard agency commission on all media placement and production.
Sample 5: Committee shall pay Contractor the sum of $10,000 per month, on the first of each month, during the term of this Agreement. In addition to the monthly compensation, Contractor shall be entitled to standard agency commission on all media placement and production. For purposes of this section, “media placement and production” includes all paid television, radio, digital, print media placement and production, but does not include postage.
Sample 6: Committee shall pay Contractor the sum of $10,000 per month, on the first of each month, during the term of this Agreement. Compensation is to be made without deduction for social security, federal or state taxes, or other applicable statutory deductions. Committee shall furnish Contractor a copy of IRS Form 1099, setting forth Contractor’s annual income no later than the end of February of the year following any year during which services were rendered.
Sample 7: Committee shall pay Employee the sum of $10,000 per month, on the first of each month, during the term of this Agreement. Committee shall furnish Employee with a copy of IRS Form W-2, setting forth Employee’s annual income as required by law.
Principle # 7: Expense Reimbursement
Questions to discuss with your client:
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- Will the client reimburse you for expenses you incur in providing the services?
- How will you itemize/account for such expenses?
- Can you incur expenses without the client’s prior approval or consent?
Sample language:
Sample 1: Contractor shall be reimbursed by Committee for approved expenses in a timely manner upon submission of a reimbursement request with supporting documentation, including receipts and invoices.
Sample 2: Committee shall reimburse Contractor for any necessary, customary and usual expenses incurred in performance of its duties, payable within 30 days of receipt of itemized statements. When incurred in the course of performing the above services, these expenses may include postage, photocopying, telephone, fax, mileage at the IRS rate per mile, and other out-of-pocket expenses as authorized and approved by Committee. Notwithstanding the above, it is expressly agreed that no expenses will be reimbursed unless Contractor submits itemized vouchers and receipts of such expenses to the Committee within 30 days of incurring the expense.
Principle # 8: Confidential Information
Questions to discuss with your client:
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- What are the client’s expectations regarding confidential information obtained during the course of the contract?
- What are the client’s expectations regarding confidential information obtained during the course of the contract AFTER the term of the contract?
Sample language:
Sample 1: Contractor shall hold all information received in connection with this Agreement in strict confidence, shall use such confidential information only in connection with this Agreement, and shall ensure that any person granted access to such confidential information similarly holds the information in strict confidence. Upon termination of this Agreement, any confidential information or other property of Committee acquired by Contractor in connection with the services provided pursuant to this Agreement shall immediately be returned to Committee.
Sample 2: Contractor shall hold all information received in connection with this Agreement in strict confidence, shall use such confidential information only in connection with this Agreement and shall ensure that any person granted access to such confidential information similarly holds the information in strict confidence. Contractor shall promptly return to Committee, or upon Committee’s request destroy, all such documents containing confidential information received hereunder, including copies in any form or other tangible evidence or impressions of such information, and shall thereafter make no further use thereof.
Principle # 9: Ownership and Use of Materials Produced
Sample language:
Sample 1: All materials produced by Contractor for the benefit of Committee shall be the sole and exclusive property of Committee. However, this section shall not prevent Contractor from using, as a sample of its work in connection with promotion of its own company, any materials produced by Contractor used publicly in this campaign. Committee may use any such materials in any manner after termination of this Agreement without obligation for any commissions or other compensation to Contractor.
Sample 2: After the term of this Agreement, all materials produced by Contractor for the benefit of Committee shall be the sole and exclusive property of Contractor. Nothing shall prohibit Contractor’s reuse or resale of the same or similar property to any other client. Committee may not use any such materials in any manner after termination of this Agreement without further agreement regarding compensation to Contractor.
Principle # 10: Liability and Indemnification
Sample language:
Sample 1: All obligations of Committee hereunder are obligations of such Committee and not of any officer, director, or employee of Committee, or of any organization with which Committee or such officer, director, or employee is, or may be associated, and Contractor shall look solely to the assets of Committee for all amounts due hereunder.
Contractor shall indemnify and defend Committee and its agents for damages and costs, including attorneys’ fees, suffered by Committee, as a result of a third party legal action caused by the acts of Contractor taken without the approval or acquiescence of the Committee or an agent designated for this purpose by the Committee.
Committee shall indemnify and defend Contractor and its agents for damages and costs, including attorneys’ fees, suffered by Contractor, as a result of a third party legal action caused by the acts of Contractor taken with the approval or acquiescence of the Committee.
Committee shall indemnify and defend Contractor and its agents for damages and costs, including attorneys’ fees, suffered by Contractor, as a result of a third party legal action caused by the acts of Committee or its agents without the knowledge or acquiescence of Contractor.
Sample 2: All obligations of Committee hereunder are obligations of such Committee and [name of individual] as the person directly benefiting from the services rendered by Contractor.
Contractor shall indemnify and defend Committee, and its agents, for damages and costs, including attorneys’ fees, suffered by Committee, as a result of a third party legal action caused by the acts of Contractor taken without the approval or acquiescence of the Committee or an agent designated for this purpose by the Committee.
Committee shall indemnify and defend Contractor and its agents for damages and costs, including attorneys’ fees, suffered by Contractor, as a result of a third party legal action caused by the acts of Contractor taken with the approval or acquiescence of the Committee.
Committee shall indemnify and defend Contractor and its agents for damages and costs, including attorneys’ fees, suffered by Contractor, as a result of a third party legal action caused by the acts of Committee or its agents without the knowledge or acquiescence of Contractor.
Principle # 11: Fee and Expense Disclosures
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- If your services include the production of artistic or other intellectual property, what are your expectations regarding the ownership and future use of such materials?
- Can the client reuse materials produced by you in his or her campaign in future campaigns even if your services are not requested in the future?
- Who is responsible for payment of compensation under the Agreement? (See Principle #2 above.
- What happens if the Committee gets sued because of actions of the Consultant?
- What happens if the Consultant gets sued because of actions of the Committee?
- Questions to discuss with your client:
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- Most campaigns are subject to a complex set of campaign finance and reporting rules. Who is responsible for understanding and complying with such rules?
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Sample language:
Sample 1: Contractor acknowledges that Committee is required by law to disclose fees and expenses paid in accordance with this Agreement on tax returns, campaign disclosure statements, and other public filings. Contractor and its agents, including sub-vendors, shall furnish Committee, in a timely fashion, full itemization, together with bills, receipts, and any other substantive documents, of all expenditures and accrued expenditures made with respect to the campaign and the services performed.
Sample 2: Contractor acknowledges that Committee is required by law to disclose fees and expenses paid in accordance with this Agreement on tax returns, campaign disclosure statements, and other public filings. Contractor shall have no responsibility for the filing of such statements, but will assist committee and shall furnish Committee, in a timely fashion, full itemization, together with bills, receipts, and any other substantive documents, of all expenditures and accrued expenditures made with respect to the campaign and the services performed.
Principle # 12: Choice of Law and Dispute Resolution
Sample language:
Sample 1: This Agreement shall be governed, construed, and enforced in accordance with the laws of the State in which the Contractor resides, without regard to its conflict of laws rules.
Sample 2: This Agreement shall be governed, construe, and enforced in accordance with the laws of the state in which the Committee resides, without regard to its conflict of law rules.
Sample 3: This Agreement shall be governed, construed, and enforced in accordance with the laws of the State in which the Contractor resides, without regard to its conflict of laws rules All disputes over the terms of this Agreement, or costs incurred thereunder, not resolved in a reasonable time by the parties shall be submitted to, and finally settled by, an arbitrator licensed by the American Arbitration Association under its Arbitration Rules, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction. Such arbitration shall be binding on the parties and the prevailing party is entitled to have and recover from the losing party reasonable attorneys’ fees and costs of arbitration.
Final Thoughts
After having worked to establish the parameters of the Agreement with your client, make sure both parties keep a copy of the signed agreement. If you make changes/ amendments to the Agreement along the way, document such amendments in a subsequent written Agreement.
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- In the event of a dispute, will the parties be bound by arbitration or will the dispute be resolved by civil litigation in the courts?
- If the parties do not reside in the same state, or the services are to be rendered in multiple states, what laws shall apply to interpret the Agreement and where shall any disputes be resolved?
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