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Preparing Contracts

Updated: January 12th, 2013 10:24 AM (MT)

Preparing Contracts

From the April 30, 1998 CIC SIG Meeting

Presented by Stewart Olive, Attorney at Law

NOTE: The STC Rocky Mountain Chapter neither endorses nor disparages this contract. While this sample contract may be appropriate for many situations, you should consult your attorney before using it and before signing any other contract. Please see the disclaimer.

Stewart Olive, Attorney at Law reviewed the sample contract, which is also available on this website.

Below is a summary of the key issues Stewart covered during his presentation:

  • Be sure that you clearly describe the scope of the project. The more detail, the better if you ever have a dispute with your client. Include details on what you will provide to the client (the deliverables) and what the client needs to give you for you to be able to do the work. If you agree to change the scope of the project, put the new agreement in writing.
  • Be sure that the person signing the contract has the authority to do so.
  • Try not to sign a contract that has a clause stating that you will indemnify your client for damages. If your client insists on such a clause, be sure that the clause limits your liability to only your negligent acts. The client must cover any damage their negligent acts cause.
  • Try not to sign a contract that has a clause that says your client must be a named insured on your business insurance policy.
  • Be sure that you cannot be construed as an agent for the client and that the client cannot be construed as an agent for you.
  • Arbitration clauses have pros and cons. Despite all the cons, Stewart still favors including an arbitration clause.

Arbitration Pros

Arbitration Cons

Can be faster than a lawsuit.

No appeal process available.
Can be less costly than a lawsuit. Arbitrators have limited accountability for their decisions and actions.
Under Colorado law, you can convert an arbitrator's award into a judgment. No discovery process to let you learn about your opposition's case.
  No "teeth" to get the other side to "play by the rules."
  You pay half of the arbitrator's fee of $125 to $400 per hour.