Need advice concerning NDA and contract Thread poster: Sebastiaan Vandenbore
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I'm looking for opinions and advice concerning NDA and contract with a potential client, in particular the following fragments:
From the NDA:
The information is provided “as is” and there are no representations or warranties, express or implied, with respect to the information, including but not limited to a warranty against infringement, accuracy or completeness. Recipient will use all information received in a safe and prudent manner a ... See more I'm looking for opinions and advice concerning NDA and contract with a potential client, in particular the following fragments:
From the NDA:
The information is provided “as is” and there are no representations or warranties, express or implied, with respect to the information, including but not limited to a warranty against infringement, accuracy or completeness. Recipient will use all information received in a safe and prudent manner and is responsible for all risk or loss arising out of its use of such information. Recipient agrees that Discloser shall have no liability resulting from the use of the Confidential Information or such other information.
Shouldn't the client be responsible to ensure the documents they will request to be translated do not infringe the rights of a third party?
Non - solicitation. Recipient shall not offer employment to the employees of the other engaged in the performance of the Services hereunder during the pendency of this Agreement and for a period of three (3) years thereafter.
3 years?
Non – compete. Recipient undertakes to Discloser that it shall not enter, directly or indirectly, into any assignments, or in any other manner accept any assignments or render any services to such Discloser’s clients where the services of the Recipient are sought to be utilized, either during the tenure of this Agreement or for a period of three (3) years after termination of this Agreement.
3 years?
Equitable Relief. The Parties agree that Confidential Information contains valuable proprietary information of the Disclosing Party and any breach of this Agreement may cause irreparable damage and that, in the event of such breach, in addition to any and all remedies at law, the Disclosing Party shall have the right to seek an injunction, specific performance, or other equitable relief in any court of competent jurisdiction to prevent violation of these terms and without the requirement of posting a bond or undertaking or proving injury as a condition for relief. If any breach of this Agreement shall occur, Discloser can settle a contractual penalty in maximum amount of € 10.000. Such remedy shall not be deemed to be exclusive but shall be in addition to all other remedies available at law or equity.
That's quite an amount, isn't it?
From the contract:
The Customer shall not be obliged to send any Requests or the Orders referred to in §x(x) below to the Contractor.
If I get no PO, how can I prove my client actually owes me money for rendered services?
the Services shall be provided under the business run by the Contractor and no third parties shall be employed to provide the Services, unless agreed otherwise with the Customer.
Why would the client be allowed to tell me how to run my business in this particular matter? Is this common?
The Customer may submit their complaints relating to the Translation to the Contractor no later than 2 (two) weeks after the receipt of the Translation, and in the case of Translations larger than 100 pages no later than 1 (one) month. Customer’s failure to file any complaints within the above mentioned period shall imply that the Services have been accepted without complaints.
Are those periods realistic?
In the case of Contractor’s delay, the Customer, on a discretionary basis, may:
1) set an additional deadline for the provision of the Services while reducing the amount of Contractor’s remuneration;
2) set an additional deadline for the provision of the Services without reducing the amount of Contractor’s remuneration;
3) terminate the Agreement in whole or in the part to which the Translation/Interpreting concerns within 3 days from the date of notification of the delay.
Reducing the remuneration? Services provided should be paid for, OR NOT? Besides, they could set impossible deadlines or makes changes after I start on the project which would be kinda ...
In the event of failure to complete or deliver the Translation to the Customer within the deadline specified in the Order, the Customer may claim liquidated damages from the Contractor, amounting to 5% of the remuneration specified in the Order per each hour of delay. Moreover, the Customer shall be entitled to claim compensation in excess of the amount of the liquidated damages on general terms.
This one goes hand in hand with the one above...
If the Translation delivered by the Contractor is defective or non-compliant with the conditions specified in the Order, the Customer, on a discretionary basis, may:
1) set an additional deadline for the Contractor in order to eliminate the defects;
2) refuse to accept the Translation, if the defects are material, and terminate the Agreement in whole or in the part to which the Translation concerns within 3 days from the date of determination of such defects of the Services; or
3) accept the defective Translation while reducing the Contractor’s remuneration, after due justification;
4) order elimination of the defects at the Contractor’s expense in a situation when correction of the Translation by the Contractor is not possible or when it would be too time-consuming.
If the Customer terminates the Agreement for reasons referred to in Paragraph X(X) or in Paragraph X(X), or if the accepted Translation contains defects, i.e. in the situation referred to in Paragraph X(X), the Contractor shall be obliged to pay liquidated damages amounting to 70% of the remuneration specified in the Order. Moreover, the Customer shall be entitled to claim compensation in excess of the amount of the liquidated damages on general terms.
Not sure what to think of this ...
The Contractor shall offer a guarantee to the Customer with regard to the completed Translations for the period of 12 months from the date of acceptance of the Translation by the Customer.
If any defects of the Translation are found during that period, the Contractor commits to eliminate the defects free of charge within the deadline specified by the Customer.
I'm willing to provide some service to make corrections, but up to a year?
The Parties agree that the settlement period shall be a calendar month (“Settlement Period”). Settlements between the Parties shall take place at the end of the Settlement Period on the basis of Order Specifications prepared by the Customer in the xxx system, no later than on the 3rd day of the calendar month following the one when the Service was delivered. Contractor is obliged to log in the xxx system, by the 10th calendar day after the end of the Settlement Period and issue an invoice/receipt no later than 10th calendar day of the month, as well as upload the copy of their own invoice to the system.
Those are not payment terms I'm very happy with ...
This Agreement has been concluded for an indefinite period.
I usually work with 1 contract per job, this is a first.
I'm hesitant to sign these, so any advice would be appreciated. ▲ Collapse
| | | | | The short answer: if you don´t like it, don´t sign it | Aug 17, 2019 |
However, it is not always that simple. You have to agree to some NDAs and contracts to get work at all, so how far can you compromise?
I will not answer all your queries, but here are a few thoughts.
Firstly, you are a business partner, not an employee. You can negotiate terms that are unreasonable, or at least try to find a compromise that is realistic. Do not simply accept everything that comes your way! If the Customer changes the terms later, do not agree to lower rates or... See more However, it is not always that simple. You have to agree to some NDAs and contracts to get work at all, so how far can you compromise?
I will not answer all your queries, but here are a few thoughts.
Firstly, you are a business partner, not an employee. You can negotiate terms that are unreasonable, or at least try to find a compromise that is realistic. Do not simply accept everything that comes your way! If the Customer changes the terms later, do not agree to lower rates or less advantageous terms, no matter what kind of sob story or competition claim they may come up with!
On compensation for damages, my advice is to take out professional indemnity insurance, and read the small print in your policy carefully. Clarify with your insurers if necessary what is covered, and especially where the limits go.
Are you a member of a professional translators´ association? If so, you could ask them for advice.
The legal details will vary from country to country, but in general, as a one-person company, you do NOT have assets or cover to pay unlimited damages, and it is not reasonable to push all liability over to you anyway. Far bigger companies limit their liability to direct loss, excluding loss of profit, loss of goodwill and all sorts of other indirect claims.
The information is provided “as is” and there are no representations or warranties, express or implied, with respect to the information, including but not limited to a warranty against infringement, accuracy or completeness. Recipient will use all information received in a safe and prudent manner and is responsible for all risk or loss arising out of its use of such information. Recipient agrees that Discloser shall have no liability resulting from the use of the Confidential Information or such other information.
This is extremely woolly. Before signing, I would simply strike out ´... and is responsible for all risk or loss arising out of its use of such information. Recipient agrees that Discloser shall have no liability resulting from the use of the Confidential Information or such other information.´
Non-solicitation - if you are a freelancer, ignore it. If you start an agency or anything like that within three years, bear it in mind when employing people.
Non – compete. Recipient undertakes to Discloser that it shall not KNOWINGLY enter, directly or indirectly, into any assignments, or in any other manner accept any assignments or render any services to such Discloser’s clients where the services of the Recipient are sought to be utilized, either during the tenure of this Agreement or for a period of three (3) years after termination of this Agreement.
I insert KNOWINGLY in large red letters in clauses like that. You should not actively poach clients, of course, but if they approach you, and the name looks familiar, check whether you have anything to link them with the relevant agency.
Otherwise, when clients approach you, you cannot be expected to ask them whether they have ever worked with any of the agencies you may have worked with in the last three years…
Equitable relief and € 10,000.
The amount sounds to me like the limit that some insurers might set for their professional indemnity insurance. Again, check with your insurers how far you are covered.
Actually, this clause is far more reasonable than some of the ´all and any´ clauses I have seen, which, taken literally, leave the translator liable for totally undefined sums to parties who are only indirectly affected.
The Customer shall not be obliged to send orders…
No orders, no work, no pay. The fact that you have signed a contract with them does not mean they MUST send you orders.
If they have sent a clear go-ahead, whether they call it a PO or not, then they owe you for the services rendered.
However, they are not obliged to send an order, PO or whatever, if they have only sent an enquiry. (They may send it to several translators and not choose you, for instance.)
Without more details, that is how I would understand the clause.
the Services shall be provided under the business run by the Contractor and no third parties shall be employed to provide the Services, unless agreed otherwise with the Customer.
The Customer has a contract with you personally, having seen your qualifications etc. and possibly your work. They do not want you to subcontract the work to anyone else, and pass on the confidential documents etc. to others, without agreeing with them. If that is how you run your business, fine, but they want to know.
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The other terms and conditions are more or less normal apart from the time limits, which strike me as rather long. With luck the situations will not arise, but you can either try to limit the periods (probably a waste of time, but if you don´t try you have to accept them).
As for delivering late, or delivering a translation with serious errors, there is always going to be trouble.
Sometimes an abject apology and a corrected file (if delivered in time) can save the situation, but it depends on a lot of factors. This is where you get into the areas of loss and damages… depending on how serious, etc., or if the client really needed the translation on a specific date, and so on.
Reducing the remuneration? Services provided should be paid for, OR NOT? Besides, they could set impossible deadlines or makes changes after I start on the project which would be kinda …
If you deliver a crap translation (perish the thought, but it is theoretically possible), the Customer might be justified in reducing the price.
If they propose an impossible deadline from the start, it is your responsibility to negotiate a better one or turn down the job.
If they make changes after you start on the project, then again, you are entitled to negotiate extra payment, extra time, or whatever you need to deliver a quality translation.
If, after you have started, YOU become ill or for any other reason cannot meet the deadline, LET THE CUSTOMER KNOW AS SOON AS POSSIBLE, and try to find a solution, or let them find another translator. This is where you can recommend a trusted colleague if appropriate, but LET THE CUSTOMER KNOW, don´t just let your colleague take over...
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Payment terms. Could be worse! I prefer to send invoices at the end of the month, and my terms are 30 days from then. I can then accumulate jobs if I have more than one from the same client in the month.
If you complete a job before the 10th of the month and submit your invoice immediately, you may get paid earlier. If the client´s portal or website where you upload invoices is efficient, this CAN be a good way of doing it, but you need to make sure your invoices are acceptable to the tax authorities where you live.
(I have dropped clients because their portals have been too much trouble, especially if their payment terms are 60 days or more after the end of the invoicing month … I would accept these terms to begin with, but that is one of the things you have to negotiate or decide for yourself whether to accept them.)
An Agreement for an indefinite period.
This means that it applies to all jobs the Customer may send to you, until one of you decides to terminate the agreement.
In view of the long non-competition periods, I might insert a comment that these periods apply for three years after the last assignment sent by the Customer, if the agreement was not otherwise terminated, because otherwise they can in principle bind you for ever!
Or you can simply say you no longer wish to work for them, and terminate the agreement yourself, should you feel like that at any time. You do not have to give a reason, unless it serves a purpose.
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Read the contract through, strike out anything you really cannot accept, and try to negotiate - sometimes clients accept a good reason.
Then you have to decide how much you need the work, and whether the advantages are greater than the risks. Some of these very draconian 'equitable remedies' and whatever are not entirely unreasonable IF the situation runs off the rails.
You make no mention of late payment! For clients in northern Europe, there are way and means, if the situation arises. Check the Blue Board and other places, but I tend to give customers the benefit of the doubt, and I have had very few problems.
You simply have to keep the rules for your part, deliver as requested and on time etc. I hope you have found a good customer - best of luck!
[Edited at 2019-08-17 19:00 GMT] ▲ Collapse
| | | | DZiW (X)
Ukraine
English to Russian
+ ...
| BizRisk management | Aug 17, 2019 |
Hello Sebastiaan.
First, a contract is a mutually* agreed deal, yet with a veto right: it's no ultimatum.
As an equal biz party, you can add, remove, or amend the terms before signing.
Second, if one need a piece of relevant advice or an educated opinion, it's a good idea to consult a dedicated specialist, in this case--a practicing lawyer in contracts.
Why, I know a lawyer who reworded all the terms, deleting all the 'ambiguous' words and amendin... See more Hello Sebastiaan.
First, a contract is a mutually* agreed deal, yet with a veto right: it's no ultimatum.
As an equal biz party, you can add, remove, or amend the terms before signing.
Second, if one need a piece of relevant advice or an educated opinion, it's a good idea to consult a dedicated specialist, in this case--a practicing lawyer in contracts.
Why, I know a lawyer who reworded all the terms, deleting all the 'ambiguous' words and amending the in/definite articles--and thus making a new contract, which was signed by the parties.
I mostly agree with Christine (though with a few reservations and specifications), but as a clever businessman you already have started doing it the right way--seeking for the real answers and choosing the best options for yourself. ▲ Collapse
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