Interior Design Contracts | Timothy Murenzi | Skillshare

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Interior Design Contracts

teacher avatar Timothy Murenzi, Interior Designer

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

11 Lessons (42m)
    • 1. Introduction to this course.

      0:38
    • 2. Lesson 1: Scope of Work

      1:33
    • 3. Lesson 2: What you are NOT doing

      2:39
    • 4. Lesson 3: Timelines

      1:24
    • 5. Lesson 4: Compensation

      5:10
    • 6. Lesson 5: Defaulting on payments.

      4:09
    • 7. Lesson 6: Misc. Provisions

      7:52
    • 8. Lesson 7: Termination

      5:22
    • 9. Lesson 8: Disclosures

      2:27
    • 10. Lesson 9: Refunds

      8:10
    • 11. Lesson 10: Payment schedule

      2:30
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About This Class

Contracts can be a daunting part of any design project. Making sure you are covered on a legality level, and also making sure that every part of the design project is covered for all of the "what-if's" takes a lot of time and years of going through experiences with projects that wind up causing you to add to your contract. 

While I am not a lawyer, I go through what my contract looks like and why the clauses I use are there. With real experience stories, you'll get a deep understanding of situations and why I added some clauses within the contract to make sure those situations don't come up in the future, OR I am prepared for it! 

Meet Your Teacher

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Timothy Murenzi

Interior Designer

Teacher

Hello! 

I have been an Interior Designer for over 13 years, and more recently I decided to slowly shift out of the industry and go into consulting for designers only. I help designers throughout the world with challenging business questions and help them achieve the success they have been working towards. 

I am here to teach and share my knowledge with everyone on Skillshare about the design industry. Thank you so much!

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Transcripts

1. Introduction to this course.: Hey everyone, welcome back to my skill share. Today we're gonna talk about contracts for interior designers. Throughout my 12 years of designing, I've struggled so much with contracts just because they're a legal document and there's so much that's changed throughout the years. So after every single project, I've literally added new clauses, clauses. So we're gonna go through my whole contract and discuss each and every clause. And I'll tell you about about a story for maybe not all of them, but some of them on the reasons why those pauses are there. As a full disclosure, I'm not a lawyer by any means. I wish I was, but please do not take any of these causes and your own contract without talking and consulting with a lawyer yourself. Now, without further ado, head on to the first lesson. 2. Lesson 1: Scope of Work: Alright, so welcome to lesson one. We're going to talk about the scope of work of a contract. The scope of work is extremely detailed and must be as detailed as possible. There should not leave any room for interpretation to the client and should outline everything that designers doing for the project. In this example, I do show that the detailed scope of work is sectioned off into the specific areas that we're going to be designing in. And this case kitchen, the guest, and some various things throughout the house. So in here, let's look at the kitchen conceptual design, creation of 3D floor plans of proposed layout and elevations for final selected design. What this means is that we're going to be creating three separate floor plans for the proposed layout. And we're gonna do elevations. So one set of elevations for the final selected floor plan design. This is how detailed you should get. And the reason why is because if you leave anything out, it could actually bite you later down the road if there's any kind of expectation set by yourself or the lack thereof with the scope of work, clients can come back and say, hey, we thought we were gonna get abc XYZ, but we actually got a DEF, for example, the scope of work is a really good starting point to making sure that you and your client on the same page and outlining it in a way that the client can understand that they are getting ABC XYZ specifically and leaving no room whatsoever for interpretation. Let's hope it or to listen to. 3. Lesson 2: What you are NOT doing: Lesson number two is talking about what you're not doing as a designer. This is equally as important to the scope of work. So the designer should not do certain things within a project. And making sure you outline these goes again, along with these correct setting of an expectation for your client. And this example, I use supervising any subcontractors on the project site specifically because in the state of California, we are actually not allowed as designers unless we are licensed as a general contractor to supervise any kind of general contractor or subcontractors on any kind of project site. We do have to have a license, a general contracting license, in order to basically Bach orders at contractors. Next, conducting extended price shopping for items on the project. So this is, for example, selecting bar stools and the client comes back and says, hey, they're a little too much money. Can you find those exact things for less money? We will not do any kind of extended price shopping for any clients. And the reason why it goes to the pricing structure, which is what we'll discuss later on. If you're charging flat rate design and that's covering a selection of three bars stalls. That's not going to be including any extra time that's necessary to resource any kind of pricing for the stuff that you've already selected. So it's important to outline that you're not gonna do any price shopping on items for the project. And the other reason too, is because that cuts into your profit margin. If you're going to find that same couch or sofa or bar stool for less money, you're gonna make less on that product. So you shouldn't allow that to happen. And delivery of any project materials is also something that we don't do. Delivery charges and pick up charges are separate from the design team and the design work. We will sometimes go pick up things if it's close to the office and on the way to the client's project, but you should never let your client know that you are picking that up for free, primarily because it sets the wrong expectation to your client that you're gonna do other things for free from the project. And lastly, engage in manual labor. So installing, flooring, moving furniture, not only does that put you at a liability for the project, but you don't wanna do that because you're not getting paid to do that stuff. But you definitely want to release any kind of liability when it comes to installing things and just leave that to the contractors. Unless of course you are a licensed contractor. And you can do that stuff. On to lesson three. 4. Lesson 3: Timelines: Timelines are a really important thing with any kind of design project that you're going to do. And the main reason why is, again, setting expectations to your clients that a project is not going to last indefinitely. In this example, I say that we strive to complete all projects undertaken within the set amount of days outlined in Article One, you guys didn't see it, but underneath your scope of work, I actually put estimated timeframe for Project. And the reason why that is is because if you don't put any kind of estimation on time and how long that project is going to take. The client can have an expectation set that the project is indefinite. The problem with that is that the client can delay their their their decisions. They can cause more scope of work to happen. And as a result, you can actually lose a lot more money on the project. In here we say, however, we can not be responsible for any delays in the performance of delivery of furniture, furnishings, subcontractors, or material supplied by others, as well as issues with the client not being able to afford services or items to complete the design as outlined in this agreement. So it's important to also say that you can't be held liable for other people's mistakes and delays in the project because you want to release yourself from that liability. Off to the next lesson. 5. Lesson 4: Compensation: So this next lesson is about compensation. Compensation is kind of difficult to talk to your clients about primarily because it's talking about money, just as it's difficult to talk to them about a $17 thousand. So for that year, sourcing for their living room, compensation is a really important part to pat down as tightly as possible. Because again, setting that expectation, you aren't able to kind of fall back on that if you're getting paid less than you should be on the project. So starting out talking to your client about payment compensation, of course is tough. But you want to be very, very clear and concise with what you're saying in this particular part. To not leave any kind of room for interpretation. We state and right at the top, the total design fee, which this case it's $8,125. And we say that we're charging an initial initial commencement fee of $2500 as outlined in the payment plan, which we will get to the very end due to upfront by the client before the designer. In this case, as t is my company, services will commence. The initial fee is 100% non-refundable under any circumstances. And the reason why we do an initial commencement fee is because that's non-refundable. That's non-refundable, excuse me, is because of the fact that when you're talking about the initial design phase of your project, there's a lot that goes into setting up a project in regards to setting it up in your software that you use or making sure that you, you take measurements and so on, so forth. So all of that is covered in the initial commencement t. This agreement is for flat rate fee as indicated above, C4, 0.11 below. So we'll go ahead and get this very last part. And charges incurred by the interests of the client's project will be billed to you accordingly. Section 4.5 is as t will provide the client with estimates and it's understood and agreed that such estimates are not binding and actual costs may fluctuate based on market rates, availability or manufacturer and in even more cases, freight charges. We then also say that we charge 3% fee for credit card charges and that checks or certified funds don't incur such fees. For 0.8 says that there are no returns on payments are already collected for work already performed. So also stated that it's non-refundable, but if you're going to charge your client your milestone fee, do so at the end of the milestone after the work is done. Especially because there are no refunds and you wanna make sure that all the work is complete before you're collecting your payment. 4.9 states the client understands and agrees that this if they submit a check and that returns, that they're just responsible for twenty-five dollar NSF fee in addition to any late fees that can incur as a result of their time check. For 0.10 states that travel expenses, of course, are reimbursable, that includes mileage. Also, make sure that you calculate all of that and make sure you keep a log of it so you can fall back on that if your clients have any questions. 4.11 says the client understand that any additional work outside the scope is subject to hourly rate. So this is a flat rate design contracts. So if for whatever reason your client wants to add additional work that doesn't cover in that initial scope of work, then you can go ahead and charge the client hourly because you're doing additional work outside the scope of work. So three more sections. The 4.12 is project being built on a flat rate charge. In this particular situation, the flat recharges single charge the client to complete the tasks listed in Article one. And that's why the scope of work is really, really important because you're stating that you are charging your client for x dollars for that scope of work. 4.13, The project is set to accomplish in a total of 30 hours. So in addition to the timeline, we're also saying how many hours? And so what I do is a unique pricing structure of hourly and flat rate. So I assess a project, I figured out how many hours it's going to take me and I charge that our as a flat rate. And if anything out is charged outside of that or done outside of that scope of work, then we convert to an hourly fee and convert to an hourly contract. And then lastly, the client further agrees that a flat rate project is due to complete and allocate an amount of hours. So this is explaining what I just did. The hours for your project are tracked by the designer and any hours that the client request outside of the scope of work, of course, is going to be approved by the client and the designer and will result in hours allocated to be used up out of that, that initial kind of threshold of 30 hours or however many hours it is. And then, of course, should those hours be used by the fault of the client, the agreement becomes an hourly agreement and the client will be built whatever kind of hourly fee charge with the required ten hours upfront, continue the project on the hourly basis. Onto the next lesson. 6. Lesson 5: Defaulting on payments.: Hey everyone, welcome to lesson five. Defaulting on payments. Arguably, defaulting on paintings is probably the worst thing you're gonna deal with as a designer when your clients don't pay you. So in the contract more to make sure you cover all of the basis. If a client ever decides to default on any of the payments that they're, that they owe you. So when we're talking about defaulting on payments, where talking really about a client stealing services. So we need to cover all of our basis with this. In this contract example, we say failure to submit payments for completed work in accordance with the payment schedule of this agreement will constitute a material breach of the agreement, and we reserve the right to terminate the agreement. The client will be responsible for any late payments past due amounts and termination fee as set and 7.3. And we're gonna get there 5.2 in the event that the designer hires an attorney to enforce any right under the agreement, the client also needs to reimburse the designer for such attorney fees and expenses regardless of whether suit is filed. And that's really important too, because you're not saying that the client would would owe you the attorney fees if you only go to court to fight it. You're saying that regardless if you go to court and if you have to hire an attorney to enforce the client not paying you, and that the client also has to pay you for that. 5.3 should the client submit their invoice within five days from the invoice date, that clients account will be considered late and incur a late fee of $150 plus an additional $6 per day thereafter. Now, a lot of you are probably thinking that this is really, really strict. And it is, and the reason why it's deterring people from actually defaulting on any payments. So we do have a cap and the cap we're gonna get to later out in the next paragraph. So the next paragraph says if the client does not pay the invoice 30 days after the late fee initiated, the contract will be terminated for non-payment. So I'm saying that if a if a payments delete will give the client 30 days before we actually cancel the contract, give ample time. It actually should be a lot less than that if you're thinking about it, because if you're not taking a payment or the client didn't pay for 30 days. That means that projects being stale for 30 days and that's a long time for that. So it really should be a lot shorter than that, like maybe half that 15 days. But I used 30 just because benefit of the doubt, I've had situations where clients wanted up in the hospital for a long period of time and I couldn't contact them. So this kind of gives a benefit of the doubt that, you know, you have positive intent in, you know, the faith that the client is going to be paying you. At that point, the $6 day fuel cap out. So 30 days really is the only time. So the invoice becomes late in five days. So from five to 30 days, which is really 25 days, you're only charging $6 a day times 25, that's a $150. So it's only a $150 in addition to the late fee of a 150. But of course that's only $6 per day that the clients delete. So if the client pays in today's It's only $12 more that they are paying for. The clients account will be submitted to collections and the client is responsible for any collection agency fees in addition to the debt from the designer. Should the client account remaining collections from more than a 180 days, then the designer can technically put a lien against the property or begin a litigation process in this case. I live in San Bernardino County, so that's where the jurisdiction is. In addition to this collection agency that we use will report the debt to all three credit bureaus and that's directly through the collection agency. Excellent. Off to the next lesson. 7. Lesson 6: Misc. Provisions: Welcome to lesson six, miscellaneous provisions. Now, miscellaneous provisions, these are, this is stuff that really I could have fit in different categories, but it wasn't too from similar with it. So I decided to do is add miscellaneous provisions. So this is a little bit of a lengthy section just because of the amount of money you can get the provisions. The other reason for miscellaneous provisions is because over the years when I've added clauses to the contract because of situations. And this is where some of the stories might come from, but I've added it just on miscellaneous provisions just to make it simple for me. But number one, so 6.1 is communication that honestly communication is the key to the success of any project you do. So the expectation is that if the designer contacts the client in any manner, whether that's email, phone, text messages, it is the client's responsibility to respond to the designer within 24 to 48 hours. That's that's a general consensus. Timely correspondence is really imperative to in certain situations like for example, we may need to confirm an order or changing the order, but if the client's not going to be responding to you, then you do have to cancel an order or you have to delay the project and the project being delayed is a huge, huge issue. And I just realized correspondence is spelled wrong. So I plot is about 6.2 access. The client is expected a grant reasonable access to the, to the premises so that the designer can actually work. This is really huge. I've had situations in the past where like one client, we had delivery for furniture and the client was always home. And unfortunately this time she had to not be home. And I didn't have any access to again to the house, so we had to wait a whole hour for her. We did charge her double time for that whole hour just because that was supposed to be something that we well, it was something we scheduled in advance and she wasn't there. So next photography of this space, upon completion of the project, designer may require permission to photograph the project for our records now, a lot of clients are actually very weird about their space being on the internet. So if you have a client like that, the key to this is saying that it's for your records. And primarily if a client asks for a little bit more detail on that, you could theoretically say, you know, there are situations where, you know, in the past a client has claimed that there was damage to something that was done by our team and by taking pictures at kind of documents that we don't run into any issues there. And it's also good to document stuff even on the construction side as a designer. So you don't want the contracted a blame that design team for stuff if something got damaged by their team. So photography of this base, we do multiples areas like or multiple phases we do before and multiple during demolition and installation and then we do a final so there's about four different times that were doing any kind of photography, verbal agreements. So it's mutually understood and agree that there are no verbal or any other agreements in addition to. Or in contradiction of the terms and provisions in this contract. So that's basically saying that the client can't come to you and say, hey, I want you to add ABC XYZ to the project. But it just be a verbal agreement. No, everything should be in writing. And so this is basically staying saying that there's no verbal agreements, period. Amendments. This agreement is non-negotiable. I think that's a given and no amendments will be made except adding to the scope of work. Decrease of budget. The clients will not decrease their budget once they advise the designer of their budget for the project, the client changed the budget. They must notify the designer immediately in writing and provide any corresponding documentation. This is huge because clients can theoretically changed the budget. I mean, it's their budget, right? But you wanna make sure that the client is going to decrease it. That doesn't hurt in the design process because obviously if you're selecting furniture or doing material based on a specific budget, you want to make sure that that material fits within that budget. So if the client's gonna go and decrease that, you basically are screwed in that sense and you have to go back to the drawing board with a design. And then of course, you'd have to charge a client for those hours. Change orders change orders to the project's scope must be requested in writing and are subject to a change order fee of $150 per changed order made and build to the client accordingly. Next, vendor invoices. So we never, never, never, never, never, never never give in vendor invoices to the client. It just doesn't work that way. So this is stating that the designer does not have any obligation nor will provide vendor and voices for any reason whatsoever, even if requested by the client. The client understands that they are purchasing materials and services from the designer, and therefore will only be able to receive an invoice from the designer showing what was charged to the client. That's important too, because you don't want the client to know your markups. I know in some states, they state requires the contractor or designer to let the client know of the percentage of markup, but they don't need to see the vendor invoice. They don't need to see how much the designer paid for that particular material and the percentage markup can be done inside the contract. Last section is rushed design and orders. So the client understands that the designer the designers normal business operation hours on Monday through Friday at nine AM to five PM Pacific Standard Time. And if the client receives an unexpected data delivery for receivables that we are limited on being able to deliver those receivables anytime sooner than a given expected date of delivery. If the client request that the deliverables are to be delivered sooner than the given expected date. The client will be assessed at $250 rush fee per request to be able to accommodate that request. However, it's up to the discretion of the design team to determine whether or not that can be accommodated. And a lot of that comes down to whether or not the manufacturer has rush delivery. Really. We're talking about just a fee to rush the order. That's not even including like any kind of fees in freight to rush the order. And we won't be able to determine the fee for the freight until we contact the manufacturer Anyway. So and last but not least, the designer charges a lower Design fee as it is anticipated, the client will purchase the material from the designer sources for the project. Should the client not purchased the chosen material from the designer, The designer reserves the right to not, I'm sorry, to increase the design fee to compensate the designer from the time spent on sourcing such material that was not charged initially. So the way I charge is a design fee and it's usually lower because I'm making profit on that particular material that I'm sourcing. So now if a client goes into shops me and says, hey, I'm Tim, I'm going to go and buy that material over at this place because it's a lot cheaper. I would actually charged the client an extra $75 per hour that it took me to source that material that they're now going to buy elsewhere. So that's really important because want to be compensated for your time. And if the client is going to go back and turn around and just try to get something cheaper. You should be compensated for the time, which is generally compensated in your project product markups, if that's how you charge your clients. Excellence off to the next lesson. Thanks so much. 8. Lesson 7: Termination: Alright, welcome to lesson seven, termination, something that I've had to do quite a bit. Like 12 years of designing terminations are they could be good and that can be bad. They can be mutual, they could be argumentative. And you wanna make sure that you'd be as professional as possible and terminating a client. And there are many reasons for termination, but without further ado, these are our reasons for terminating a contract. And I think it's really important to actually outline all of the reasons that you could potentially terminate a contract. 7.1 information for cars if either party breaches any provision of this agreement, and if such breaches not cured within 30 days after receiving written notice from the other party is specifying a breach. The non breaching parties shall have the right to terminate this agreement. So this is saying that either party can terminate if there was a breach done by the opposing party. That's really important because you wanna make sure that the client is as equally able to terminate an agreement. You don't want to make it to where the client can't terminate an agreement with you because the court system is not going to like that at all. 7.2 termination for convenience, this agreement may be terminated by either party on a 30-day notice, written notice effective as of the date as the expiration of the notice period contingent to 7.6 below. So that's more of a mutual agreement determinate. That's really like We'll get to 7.6 down below 7.3. Don't read ahead by the way. 7.3 contract termination fee. I do charge a contract termination fee and it's a very steep and it's because I don't want clients to terminate a contract just because they realized that, oh, I can maybe designed myself and I like it better and then worse screwed basically. A client further agrees that if they terminate the agreement before its completion date, the client will be responsible for paying a termination fee of up to 50% margin of the cost of the total design fee depending on when the agreement was terminated. An example of this is let's say the design fee is $3 thousand total, the termination fee would actually be $2 thousand. And this is calculated by taking the total cost of the project, dividing it by 0.6 and minus the total cost of the initial design phi, in this case it was $3 thousand. So if we did this math right now, so we're taking the initial design F0, $3 thousand, dividing that by 0.6, which is actually $5 thousand. And then minusing the $3 thousand initial design fee, which comes out to $2 thousand. So you're charging a percentage, a margin of the total design fee or not, the total initial design fee that the client paid to hire you. 7.4. In the event of termination, a client shall pay designer for services performed through the termination in the amount of the prorated portion of the fees, do the client shall pay all expenses, fees, and additional cost incurred through the date of termination, including kinda termination fee. If applicable. Now of course, the termination fee is to your discretion. You can charge that if you want to. You can even add to the designers discretion. You may be charged a termination fee, but that's up to you. 7.5, the designer observes reserves. Reserves the right to terminate this agreement in the event of the client becomes verbally abusive, conducts themselves in inappropriate slash unprofessional manner, or creates a hostile work environment towards any employee of the designer. Should the designer be forced to terminate this agreement for such actions, a termination fee would be charges outline Article seven, Section 7.3. So this is why the contracts that I've terminated terminated for hostile work environments, clients, clients get angry, especially when contractors do stuff or even there's under misunderstandings on the designer side, I've had situations where a client and threatened to hit me with a bat and actually went and got his bat. And I immediately left the house and sent him an email of notice termination. And so that's really important. You want to be safe. And if the client's not, if they're gonna be verbally abusive to you, you're not getting paid to do to take that. So definitely how something like that in your agreement number 7.6, this agreement can be terminated by mutual agreement should the agreement not being able to be fulfilled to its fullest by either party, such termination can be effective immediately from the date of the notice by other party and any termination fees would be paid by the client if applicable. So that means that if for whatever reason you just feel like maybe you charged too little for the project or let's say the client is just not making any decisions. You can certainly terminate the agreement. That way as well. We wanna make sure that you're happy in your project and you don't feel obligated to be in the project? Yes. And the contract is an obligation, but in a sense that you're the designer and if you feel like the project is over your head, why not terminate it and cause less of a headache for yourself and your client down the road. Off to lesson eight. 9. Lesson 8: Disclosures: Okay. Disclosure. This disclosure specifically as for contracting, now you can also add a S at the end of this to make it plural for covering all of your disclosures in general like California Prop 65, I believe 64, 65. Remember. But anyway, you can use this as all of your disclosure. So whether that be, you know, your California Prop 65 disclosure, if you're in California or any other disclosures, you constantly have to push out. Now by putting that in the contract, that doesn't mean you can't put it on all of your purchase orders to especially for Prop 65, in that you really have to disclose it everywhere to cover your basis. So on this specifically, we cover full disclosure on contracting and construction. Let me read it for you. The designer is not and does not, is not N does not poor, purport to be a contract or or contracting service. The designers did not does not hold a contractor's license and does not perform or offer services that such contractor would provide, including, but not limited to painting, electrical installation, plumbing installation, demolition, masonry work, tiling, and so forth. The designer is also not legally able to provide construction advice on structural walls or any services or labor that would otherwise be performed by a licensed contractor. It is not liable for any work performed by any contractor or subcontractor, including, but not limited to, architects, engineers, general contractors. The designer does not supervise on site can demolition, construction or responsibilities of general contractors or subcontractors? Contractors are responsible for obtaining their own measurements to ensure accuracy and final construction. The designer does not assume any responsibility for the design or modification of the design of any structural heating, air conditioning, plumbing, electrical baba, blah, blah, blah. So if you are general contractor as a designer or a general contractor and a designer, you don't need this obviously. But in certain states like California, I legally cannot do any of this, even consulting about construction If I don't hold a general be licence. Off to the next lesson. 10. Lesson 9: Refunds: Okay. Okay. So now we're gonna talk about refunds. Personally, I do refunds, but there's heavy, heavy consequences to doing so and I'll explain a little bit. So 9.1, the client may return non custom. That's a really important and, and on a special order products. So that's non like custom sofas or anything, that's a special order. So There's gonna be a 50% restocking fee. Now, pick your jaw up off the floor and I'll explain. So you have upwards of ten steps that take up at least five hours of your time when returning something. Unless it's something as easy as you putting it into a box and sending it to the manufacturer. But even then there's still like steps there. So let's look at the logistics here on returning an item, you have to go from your office or if you have a home office to your client's house, drive there however long that's going to take, then you have to pick up the item and drive it back to your office. You have to package that stuff up and bring it to either post office or however you're going to deliver it to the manufacturer, then you have to drive to the manufacturer or the post office or wherever you're you're going to get hit send, and then drop it off, then drive back to your office. Now, if you're not shipping it and it's lead local, local store, you have to go to your client's house and you have to pick up the item, then drive to the store, wait on line, then return it, then drive back, then wait five to seven business days to actually get a refund. And if you're shipping the product that's even longer because they have to wait for the manufacturer to actually receive it and then issue or refund, which could take ten days in itself. Then once you are done at the story, you have to drive back. So are ready at 77 steps. Then. You have to basically go to the bank to get a cashier's check for your client, for the refund unless you want to refund them through like your payment processing. But even then that and tells you now going to log in, go into return, and then you have to do all the paperwork on the backend, on the accounting side for that returns. So it's a lot of steps. So the 50% restocking fee deters clients from actually returning anything that they've selected and approved before doing anything. And then on top of that, it just covers a lot of the admin stuff that you're gonna do. Now. You could either do that or you can charge them the admin time on your hourly rate. But let's say for example, it took you five hours and you charge a $175 per hour. That's already $875 spent just returning the item. So that's why we do that. 9.2, there are no refunds for services already rendered. That's a that's a no brainer really. That's saying that if you are already designed something and the clients not happy that you're not going to return whatever work you've already been, what's already been done. The designer would provide you with a time metric for any payments that the client paid. Let's say it's a flat rate design and the client cancels the contract or something. But you still have like ten hours on the project that you technically got paid for, you should refund them that amount of the hours that we're not actually used for the project. So in that case, you'd have to give the client and he kind of proof that you spend that time. And then whatever time you didn't spend and then refund the client accordingly, then 9.3 is covenant not to sue. This means that considering any funds were accepted. So actually backtrack 9.2. So it also says that if the client agrees or the client agrees that if they cash the check on a refund that you gave them, the client cannot sue you for any additional money because by accepting that check, they've accepted that return or refund. And therefore, they've accepted the terms that that's what they were going to accept and so on and so forth. So this is saying that if they accept any funds or if a cat check was cached, the client is accepting a refund. The purchaser and his or her spouse, hairs legal representatives or anyone else. Next of kin cannot sue you because they accepted that refund and they accepted the terms of that. So that's important to then we have a section 1542 wavelengths in in this express intention of each party in executing this agreement, that it shall be effective. This is a lot of legal jargon. So jargon so Section 1542 is specific specific to the California Civil Code and it basically is a bunch of legal jargon. So contact your attorney specifically and see if they want you to add 1542 waiver in California. If you're not in California, don't worry about this. This is completely I don't even know what it is my lawyer edited, so don't worry about that part. Unless you're in California, then of course, talk to a lawyer. 9.5. no admission of liability. So nothing here and shall constitute or be construed as an admission of any liability whatsoever. So that's really important too. 9.6 attorneys fees and costs to date, the parties and each of them shall bear their own cost and attorney fees. So if the client's gonna go sue you, they have to bear their own costs and that this prevents them from actually suing you for the attorney fees themselves. So that's good. 9.7 warranty and representation regarding no prior actions except the action. So each of the parties on behalf of themselves and each of the representatives, agents, employees, attorneys, so and so forth. Covenants that as of the time of signing the agreement that with the exception of the action, they have not filed any claims against you. So they're saying basically that they haven't tried to see you already. 9.8. successors and assigns. This agreement shall be binding upon the parties successors. So if the contract holder passes away, whoever is next of kin to contract fall on their lap and they have to fulfill that contract separability. So this is saying that if a if a judge, for whatever reason deems, let's say 9.6 in this contract, unlawful. It doesn't avoid the whole contract. If you don't have a several ability clause, the judge can say that the whole contract is thrown out if any part of the contract is void or invalidated. 9.10, if you accept any refunds from the designer for services not rendered on any advanced payment, you wave your right to request additional funds for whatever reason. So this kind of ties in to the terms before where if they accept a refund, they won't see you. So we will audit the account automatically and provide any kind of refunds within 30 days of the agreement termination date, or the date of the project completion. So if there are any hours unused, I do give refunds for those because it's fair. They paid you for a set amount of hours. And if you've got those out, that project done quicker than the clients should be, should be getting that money back. So but if the client accepts any refunds from you, then they wave or any kind of right to additional funds whatsoever. Like for example, I had a client who terminated the contract and we gave him the $850 refund for hours not used. And then they went and tried to sue us for the remaining balance because they claim that we did something that we didn't do. So that's where that clause came into play. All right, onto the next lesson. 11. Lesson 10: Payment schedule: All right. The last section of this agreement we've made it. I see you guys crawling to the finish line here. So let's wrap this up with Payments schedule. This is an example of payment schedules. So I do milestone payments because I do flat rate. So this is like, for example, contract retainer, non-refundable retainer to begin design services of what that payment looks like. Material selection. So amount do prior to selecting materials, that covers the amount of time for materials pre demolition of Mountain Dew prior to demolition commencing, and then project management fees, which is prior to managing the project so that the project management usually is done at the same time as pre demolition because project management is including the demolition side. So I do I do tend to add charged both of those at the same time. And then last but not least, the final hold back is the amount due when the project is complete. Now if you're doing a hourly rate, what you could theoretically do is put this out like this is how many hours are anticipated for this task and kind of lay it out that way. And this is how much that payments should look like. But if you don't want to sell yourself short that way, meaning that it could take longer or could take shorter, then you can just not even have a payment schedule. But flat rate definitely should have a payment schedule based on milestone, I believe, and cover all the basis on when the client supposed to pay you. Just so that way there's no interpretation or wrong expectations set on when you should be getting a paycheck for that project. And last but not least, thank you so much for, for this course. Contracts are very, very complicated, but again, I'm not a lawyer, so please, please, please, if you want to use any of these clauses, just circle back with your lawyer. You can use a service like Legal Shield.com. If you are in the United States, in every single state, legal shield is a really low cost legal advice. It's really having a lawyer on your fingertips definitely reach out to them. The No, they are not sponsoring this video whatsoever. That's just who I use. But again, thanks so much for tuning in, for watching. I know this was kind of boring because it was a lot of just presentation, but contracts are definitely something that I've struggled with my whole career and wanted to share this with, used to maybe help you out. Alright, thanks so much guys. Take care.