contracts
Zeghy
EGR4050ContractClausesExamples.pptxCONTRACT CLAUSES EGR 4050
JOHN W. TULAC
Attorney at Law, Professor Emeritus
Copyright 2018
ANALYSIS OF THE CLAUSES
These are clauses that engineers may encounter in contracts drafted by potential clients
Your job is to read each clause and determine whether it is good for you, bad for you, or ugly for you
You will need to take your time with some of these clauses; some are not easy to read or understand
Welcome to the real world
BEST EFFORTS CLAUSE
Professional shall use her best efforts in the performance of all her duties under this Agreement for professional services
BEST PRACTICES CLAUSE
Engineer warrants and represents that it engages at all times in best practices for the performance of its services set forth in this Agreement.
MOST FAVORED CLAUSE
The price for the services is and will continue to be the lowest price charged by Engineer for the same or substantially similar services. If at any time during the term of this Agreement, Engineer offers or sells the same or substantially similar products to a third party at a lower price than the price set forth herein, Engineer will immediately notify Client and reduce the price for the applicable deliverables to such lower price on any pending and future services.
TIME CLAUSES
Time is of the essence.
Time Clauses
Schedule of Services - OK
Timeline Exhibit - OK
“Deadline” or “Deadlines” - Not OK
Description of purpose of schedule, timeline, deadline, etc.
Often necessary, but potentially dangerous
STANDARD OF CARE CLAUSE
THREE SIMPLE INDEMNITY CLAUSES
Engineer agrees to hold harmless and indemnify Client from any and all liability, including cost of defense, arising out of performance of the services described herein.
Engineer agrees to hold harmless and indemnify Client from any and all liability, including cost of defense, arising out of Engineer’s negligence, whether it be sole or in concert with others, in connection with performance of the services described herein.
Engineer agrees to hold harmless and indemnify Client from and against liability arising out of Engineer’s negligent performance of services.
MUTUAL INDEMNITY CLAUSE
The Consultant agrees, to the fullest extent permitted by law, to indemnify and hold harmless the Client, its officers, directors and employees (collectively, Client) against all damages, liabilities or costs, including reasonable attorneys’ fees and defense costs, to the extent caused by the Consultants negligent performance of professional services under this Agreement and that of its subconsultants or anyone for whom the Consultant is legally liable.
The Client agrees, to the fullest extent permitted by law, to indemnity and hold harmless the Consultant, its officers, directors, employees and subconsultants (collectively, Consultant) against all damages, liabilities or costs, including reasonable attorneys’ fees and defense costs, to the extent caused by the Client’s negligent acts in connection with the Project and the acts of its contractors, subcontractors or consultants or anyone for whom the Client is legally liable.
Neither the Client nor the Consultant shall be obligated to indemnify the other party in any manner whatsoever for the other party’s negligence.
DAMAGES CLAUSE
The term Damages shall mean any and all damages, liabilities, obligations, penalties, fines, judgments, claims, deficiencies, losses, costs, expenses and assessments (including without limitation income and other taxes, interest, penalties and attorneys and accountants fees and disbursements).
DAMAGES CLAUSE
UNLESS OTHERWISE EXPRESSLY HEREIN PROVIDED, EACH PARTY’S LIABILITY TO THE OTHER PARTIES UNDER THIS AGREEMENT SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, WHETHER IN CONTRACT, IN TORT, UNDER ANY INDEMNITY PROVISION, OR OTHERWISE.
DAMAGES CLAUSE
Neither party shall be responsible for consequential, indirect, special or punitive damages.
DAMAGES CLAUSE
Each of the Parties is liable to the other for any direct damages arising out of or relating to its performance or failure to perform under this Agreement. Except for a Party’s breach of Article 10 (Indemnities) or Article 8 (Confidentiality), in no event will either Party be liable to the other for damages due to a breach of this Agreement in excess of the amount of the Service Fees paid by Company to Service Provider over the last twelve (12) months.
DAMAGES CLAUSE
The Parties shall be entitled to all remedies or damages available to them in equity or at law under the Uniform Commercial Code.
CHANGE ORDER
In the event that Service Provider is requested or required to perform services that are outside the scope of this Agreement, such services and a compensation schedule therefore must be mutually agreed upon by the parties in a written change order (Change Order) prior to the provision of said services. The Change Order constitutes an amendment to the applicable Work Order and the services set forth therein shall be deemed to be Services part of such Work Order.
TERMINATION CLAUSE
7. Term and Termination.
7.1 Term. Unless earlier terminated as set forth below, the term of this Agreement shall begin on the Effective Date and shall continue until December 31, 2017 (“Initial Term”), and shall thereafter automatically renew for subsequent one (1) year terms, unless notice of termination is given not less than six (6) months prior to the end of the Initial Term or annual renewal term.
TERMINATION CLAUSE
7.2 Termination for Convenience. Either party may terminate this Agreement upon written notice to other party and such termination shall be effective six (6) months after the date such notice is received by the non-terminating party. After termination, ENGINEER shall still provide maintenance services at its normal hourly rates for a period of two (2) years as measured from the Effective Date and ENGINEER agrees to use its good faith efforts to provide such services on a timely basis, but the response times in the Software Maintenance Procedures attached hereto shall not apply after the date this Agreement terminates.
TERMINATION CLAUSE
7.3 Termination for Breach. Either party may terminate this Agreement upon written notice if the other party breaches any material obligation under this Agreement or the Purchase and Sale Agreement For Software entered into concurrently herewith and fails to cure such breach within thirty (30) days after receiving written notice of the breach. Such notice shall specify the nature of the breach in reasonable detail. Should ENGINEER terminate this Agreement for COMPANY’s breach, the terms of Section 7.2 (with respect to reimbursement of costs and Additional Compensation) shall apply.
TERMINATION CLAUSE
7.4 Effect of Termination. Upon termination of this Agreement for any reason, any amounts owed to ENGINEER under this Agreement before such termination, or if such termination is by ENGINEER for a material breach by COMPANY an amount not less than the Minimum Monthly Fee for not less than six (6) months after notice of termination is given resulting in such termination, will be due and payable within thirty (30) days of such termination, and each party shall promptly return to the other party or destroy all Confidential Information of such other party in such party’s possession or control and certify in writing to such other party that it has fully complied with these requirements. If a breach is the failure by COMPANY to timely pay fees due under this Agreement or the Purchase and Sale Agreement For Software upon five (5) days’ written notice ENGINEER may suspend working on any Project and providing maintenance and support until payment has been received.
WORK PRODUCT
8.1 Work Product. All tangible items prepared by Engineer, including but not limited to all drawings, specifications, calculations, data, notes and other materials and documents, including electronic data furnished by Engineer to Client and to Subcontractors under this Agreement ("Work Product") shall be instruments of service, and Engineer shall retain the ownership and property interests therein, including the copyrights thereto.
INSURANCE
Single Limit
Aggregate Limit
Types
Professional
Commercial, including Fire
Automobile
Workers Compensation
