The question : : Are contracts really necessary?
Another good question. Short answer? Yes, absolutely.
Question: Why?
Many reasons....firstly though, what is, a contract
From Wikipedia:
A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Contract law recognises and governs the rights and duties arising from agreements
Within jurisdictions of the civil law tradition, contract law is a branch of the law of obligations.
At common law, formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound. Each party must have capacity to enter the contract. Although most oral contracts are binding, some types of contracts may require formalities, such as being in writing or by deed.
In short, a contract is a statement (the simpler the better) that defines the people involved in the discussion (until signed, or executed, it is really only a discussion), their role and responsibility, a definition of the terms of reference (what the agreement is intended to be about) and generally sets out the obligations, rewards, penalties and/or consequences of the disruption of a contract.
In the world of design - in the world of creative endeavours (architectural, artistic, interior design, graphic design, music, etc) a contract seeks to define
the scope of the obligations or responsibilities - by all parties that are signatory to the contract. It is based, in most all instances, in the definition of a
Scope of Services.
What is that?
The Scope of Services basically lists and identifies all the things that the provider is required to do - those things for which they will receive compensation. And so, the Scope of Services is the most important part of any contract or agreement. It is the cornerstone of all that will follow.
If a designer, or a client, neglects to include a setoff responsibilities, or services, then the cornerstone is flawed. The problem is, that often-times one doesn't discover such omissions until they find it necessary to enforce the contract. It's like baking a cake.....if one agrees to bake a cake for $10.00 and it is to include all necessary and required ingredients such that the specified cake can be in fact produced, and one, or more key ingredients are overlooked and omitted, the cake is likely to be a failure. The purchaser of said cake then is within their rights to refuse to pay for the cake insofar as it is incomplete and does not conform to the Scope of Services, or, the RECIPE. Capisce?
Its simple really - and a successful agreement, in the eyes of all parties, is comprehensive and thorough with nothing overlooked. A successful agreement or contract is built by those parties anticipating any and all eventualities that might influence or interfere with the successful production and delivery of the cake. For example, it is agreed that the cake will be finished and delivered in time for Bob's birthday party....a very specific time and date. However, it is discovered too late, that the store has no sugar available to sell - nor does any other store within a reasonable distance. Thus, although the cake may be able to be produced, no one will be happy with the result. And the purchaser is perfectly within their right to refuse payment as the result did not meet the agreed upon Scope of Services. It matters not, legally, that due to some un-anticipated event, there was no sugar available locally. It would be seen as the ultimate responsibility of the provider to ensure they had adequate supplies of all necessary ingredients.
Following is a fairly standard Letter of Agreement which can be employed to cover many/most contractual undertakings:
Another good question. Short answer? Yes, absolutely.
Question: Why?
Many reasons....firstly though, what is, a contract
From Wikipedia:
A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Contract law recognises and governs the rights and duties arising from agreements
Within jurisdictions of the civil law tradition, contract law is a branch of the law of obligations.
At common law, formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound. Each party must have capacity to enter the contract. Although most oral contracts are binding, some types of contracts may require formalities, such as being in writing or by deed.
In short, a contract is a statement (the simpler the better) that defines the people involved in the discussion (until signed, or executed, it is really only a discussion), their role and responsibility, a definition of the terms of reference (what the agreement is intended to be about) and generally sets out the obligations, rewards, penalties and/or consequences of the disruption of a contract.
In the world of design - in the world of creative endeavours (architectural, artistic, interior design, graphic design, music, etc) a contract seeks to define
the scope of the obligations or responsibilities - by all parties that are signatory to the contract. It is based, in most all instances, in the definition of a
Scope of Services.
What is that?
The Scope of Services basically lists and identifies all the things that the provider is required to do - those things for which they will receive compensation. And so, the Scope of Services is the most important part of any contract or agreement. It is the cornerstone of all that will follow.
If a designer, or a client, neglects to include a setoff responsibilities, or services, then the cornerstone is flawed. The problem is, that often-times one doesn't discover such omissions until they find it necessary to enforce the contract. It's like baking a cake.....if one agrees to bake a cake for $10.00 and it is to include all necessary and required ingredients such that the specified cake can be in fact produced, and one, or more key ingredients are overlooked and omitted, the cake is likely to be a failure. The purchaser of said cake then is within their rights to refuse to pay for the cake insofar as it is incomplete and does not conform to the Scope of Services, or, the RECIPE. Capisce?
Its simple really - and a successful agreement, in the eyes of all parties, is comprehensive and thorough with nothing overlooked. A successful agreement or contract is built by those parties anticipating any and all eventualities that might influence or interfere with the successful production and delivery of the cake. For example, it is agreed that the cake will be finished and delivered in time for Bob's birthday party....a very specific time and date. However, it is discovered too late, that the store has no sugar available to sell - nor does any other store within a reasonable distance. Thus, although the cake may be able to be produced, no one will be happy with the result. And the purchaser is perfectly within their right to refuse payment as the result did not meet the agreed upon Scope of Services. It matters not, legally, that due to some un-anticipated event, there was no sugar available locally. It would be seen as the ultimate responsibility of the provider to ensure they had adequate supplies of all necessary ingredients.
Following is a fairly standard Letter of Agreement which can be employed to cover many/most contractual undertakings:
LETTER OF AGREEMENT
Between
Mr Bob Bobbalo
(hereinafter referred to as the Client)
And
Destructo Design Environments
(hereinafter referred to as the Designer)
Between
Mr Bob Bobbalo
(hereinafter referred to as the Client)
And
Destructo Design Environments
(hereinafter referred to as the Designer)
Whereas the Client wishes to retain the services of the Designer to perform the following services:
The client agrees to compensate the Designer for work as described herein based on:
a) base consulting rates:
Principal Designer $250.00/hour
Project designer $150.00/hour
Intermediate designer$100.00/hour
Junior staff $75.00/hour
Said fee not to exceed $12,500.00 provided the agreed upon Scope of Services is not
modified or changed by the Client unless agreed to in writing by the Designer
Schedule of payments:
The Client agrees to the following payment schedule –
for printing costs, courier costs, long distance telephone/fax charges and all other such expenses.
Travel:
The Client agrees to pay the Designer for approved out-of-town travel according to the following schedule:
Principal Designer – per diem rate of $1250.00
Project Designer - “ “ $ 750.00
Intermediate Designer $ 500.00
All travel related expenses will be reimbursed by the Client to the Designer immediately upon receipt of
appropriate invoices (to include copies of original bills, etc)
General:
The Client further agrees to responsibly reply to queries, questions by the Designer such that the
normal flow of a project does not become delayed due to lack of information or approvals
by the Client.
******* The Designer may insert any number of additional stipulations into the LOA.
Just be aware, the more complex an agreement is drafted the longer it will take for such an
agreement to be reviewed by the Client’s legal advisors. Brevity, clarity are the watchwords of
a successful agreement.
This is a basic format, perfectly acceptable as a business agreement. But, when entering into any such contractual arrangements one should firstly consult a legal opinion as to the legality and applicability of the terms of the agreement.
- Planning study of app 7,000 sq ft office space with private offices for
President, 2 VP’s, Conference Room, General Office Area, Staff Kitchen - Detailed floor/furniture plan
- Colour & finishes proposals, schemes
- Detail drawings for custom conference table
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- Etc.
The client agrees to compensate the Designer for work as described herein based on:
a) base consulting rates:
Principal Designer $250.00/hour
Project designer $150.00/hour
Intermediate designer$100.00/hour
Junior staff $75.00/hour
Said fee not to exceed $12,500.00 provided the agreed upon Scope of Services is not
modified or changed by the Client unless agreed to in writing by the Designer
Schedule of payments:
The Client agrees to the following payment schedule –
- An initial retainer of $4000.00
- At a point of 30% completion a further payment of $3000.00
- At a point of 75% completion a further payment of $3000.00
- At completion (100%) the balance of $2500.00
for printing costs, courier costs, long distance telephone/fax charges and all other such expenses.
Travel:
The Client agrees to pay the Designer for approved out-of-town travel according to the following schedule:
Principal Designer – per diem rate of $1250.00
Project Designer - “ “ $ 750.00
Intermediate Designer $ 500.00
All travel related expenses will be reimbursed by the Client to the Designer immediately upon receipt of
appropriate invoices (to include copies of original bills, etc)
General:
The Client further agrees to responsibly reply to queries, questions by the Designer such that the
normal flow of a project does not become delayed due to lack of information or approvals
by the Client.
******* The Designer may insert any number of additional stipulations into the LOA.
Just be aware, the more complex an agreement is drafted the longer it will take for such an
agreement to be reviewed by the Client’s legal advisors. Brevity, clarity are the watchwords of
a successful agreement.
This is a basic format, perfectly acceptable as a business agreement. But, when entering into any such contractual arrangements one should firstly consult a legal opinion as to the legality and applicability of the terms of the agreement.
What is, Professional Practise?
Good question......
Every profession states their core values regarding Professional Practise usually within their
Mission Statement, or Code of Ethics.....
And many associations of non-professionals embed their Principles of Conduct in their manuals.
Professional Practise is exactly what it states it is....it is a body of statements, definition, operational
practises that reflect the core values of the particular profession.
P/P, as a guidance vehicle, is intended to encourage all members to use and apply the highest standards
of performance of their work - be it an accountant, architect - pilot, designer.......
Professional Practise is the envelope within which its members guarantee to conduct their client/customer
relationships in the most fair business like manner, to the highest ethical standards.
This sector of DesignReview•International will be an ongoing forum wherein we will provide guidance, answer questions -
provide copies of LOA's (Letters of Agreement)....discuss Early Termination Fees......explain BHR (Billable Hourly Rates)
and how to determine them.....
Generally, most of the issues we expect to deal with are pertinent to most professions....however, our focus of course
is on design - interior design, graphic design, industrial design
So - if you have questions, comments, etc please send an email to inbox@DesignReview.International and
in the Reference field type Professional Practise.
We promise to monitor the mailbox and respond promptly
Good question......
Every profession states their core values regarding Professional Practise usually within their
Mission Statement, or Code of Ethics.....
And many associations of non-professionals embed their Principles of Conduct in their manuals.
Professional Practise is exactly what it states it is....it is a body of statements, definition, operational
practises that reflect the core values of the particular profession.
P/P, as a guidance vehicle, is intended to encourage all members to use and apply the highest standards
of performance of their work - be it an accountant, architect - pilot, designer.......
Professional Practise is the envelope within which its members guarantee to conduct their client/customer
relationships in the most fair business like manner, to the highest ethical standards.
This sector of DesignReview•International will be an ongoing forum wherein we will provide guidance, answer questions -
provide copies of LOA's (Letters of Agreement)....discuss Early Termination Fees......explain BHR (Billable Hourly Rates)
and how to determine them.....
Generally, most of the issues we expect to deal with are pertinent to most professions....however, our focus of course
is on design - interior design, graphic design, industrial design
So - if you have questions, comments, etc please send an email to inbox@DesignReview.International and
in the Reference field type Professional Practise.
We promise to monitor the mailbox and respond promptly
