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Protection in Contracts

I am amazed at how many protection companies enter into non-contractual agreements with clients and perform duties on a basic handshake.  Any legitimate client worth its weight in salt would never enter upon an agreement without a contract on the books preceded by a proposal.  But it is beyond my realm of imagination how many of us in this industry will engage in such an agreement without contractual protection.

Contracts can be more frightening than the detail itself.   What expenses did we agree on? Did we agree upon a daily or hourly rate?  How many specialists did we agree upon?   Is the client paying for advance work?  These are all questions that are in your contract and will alleviate you resorting to your memory and convincing a client it was what you agreed upon during those drinks at the bar and are just some of the details within the contract that affect how much you spend, and how much you make.  For most of us this is the most important part of the agreement.  However, there are other “Articles” that need to be in the contract to protect YOU and save you the heartache from having to pay later.

Some (not all) of these articles are:

  • Scope of work-Section that articulates what services you’ve agreed to deliver.  The who, and what, not the when and why.
  • Contract price
  • Invoicing and payment
  • Liability
  • Disputes

Another thing you need to include is a section that states whether you are using sub-contractors.  Warning here, you need to really know and understand  the definition of a sub-contractor.  In many states a sub-contractor is a company, not an individual, and under the definition of a sub-contractor you have limited managing authority.  Read your state laws and marry that up with uncle IRS’ rules.  In some cases they seem to clash but in the end you have to take responsibility to stay within the guidelines.

Often times protection companies will engage in a handshake deal with someone within the client group that really does not have the authority to execute the agreement but has been tasked to procure the service provider.  More that not this person has no prevailing understanding of the importance of a contract because in many cases they too did not sign a contract.  When it’s time to get paid you’ll find yourself chasing down Joe Schmuckatelly for the agreement you guys made at the bar.  This is dangerous poker you are playing especially when you have put together a team of specialists that want to be paid and could care less that you can’t find the person in charge of the money nor Mr. Schmuckatelly.  Their beef is with YOU.

The other thing you want to understand is that a proposal is NOT a contract.  Proposals are not binding, SIGNED contracts are.  I say signed because there are some of you that have submitted contracts and have been promised that the contract will be signed and sent back to you before the start date.  I am not going to tell you whether you go ahead and pay for plane tickets, reserve lodging and vehicles, but just remember if you do and you do so knowing that the contract is not signed, you are rolling the dice.  The old school mentality is no contract, NO deal.

I suggest that you have a standard contract that you use for each engagement that covers all of the essential articles for a protection detail.  What happens in many cases is that when you submit that contract the client will send it to their legal department and red-line areas that they do not agree with and add language they want in it.  Coming from a family full of attorneys, I undertand how and why this happens.  With one client we have, we had to include and retract language in our standard agreement.  After we resubmitted the contract, it was then forwarded to another lawyer in the legal department who took out the initial attorneys additions and asked us to add language that mirrored what the first attorney told us to take out.  Eventually everything was agreed upon and that contract still remains in affect today.  My brother oversees our negotiations and laughed and said this is standard within legal departments because each attorney has his/her own style.

In closing, STOP doing handshake deals and get down to the business end of doing business.  Me and Mark are thinking of doing a webinar on this subject matter but have not come to a final decision.  It is unsure how much interest is out there on this subject.

1 comment

  1. James Draine

    Im all ears on the subject and would even make a donation to make it happen as well as to see some real professional contracts with wording for fees for conducting a advances etc..

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