First I want to acknowledge the excellent work of Alice and Michele! I have read your How To book on writing a "Kick Butt Contract" several times over and found the information to be indispensable! Thank you so much!
I am in the process of working with an attorney on drafting my contract, and have a few questions based on suggestions from Alice and Michele's book.
1. If you are charging a set-up fee, when do you collect that? At the inception of the contract, 30 days out, or with your first invoice? Do you state that it's non-refundable (in the unlikely event that the Client has sudden buyer's remorse after signing with you, etc?)
2. My att'y asked me to clarify the "Early Termination" terms, and how to charge a penalty for that if initiated by the Client. I'm stating my "Length of Agreement as follows:
"This Agreement will be in effect for one year, and will be automatically renewed from year to year-unless terminated by either party upon 30 days prior written notice, at any time, with or without cause.
Annual Renewal Date: ____________________________________________ "
The terms of "Early Termination" in this instance, are simply 30 days with written notice.
I am then stating in my contract that Early Termination will incur a penalty of 30% of the average monthly fee, and non-compliance with early termination terms will result in the immediate cessation of work.
My att'y is asking me what if, hypothetically, a client terminates the contract in less than 30 days from the signing of the contract, or less than 30 days of processing claims, so I would therefore not have an average amount for which to judge my 30% penalty?
Thank you in advance for your suggestions.