August 5, 2013-
As a business attorney representing small business owners and entrepreneurs, I am frequently called upon to send demand letters, and even file lawsuits, in order to collect money on behalf of my clients from their delinquent customers. In each of these situations, my clients had one thing in common: none of them signed a Retainer Agreement before starting work on their projects. Instead, they mistakenly believed that the proposal they drafted, or the e-mails they sent back and forth, constituted a “meeting of the minds” as to the project details.
More than likely, both parties will have a different understanding of how much the project will cost, when it is due, how many changes can be made, and what is considered an acceptable work product.
A carefully crafted Retainer Agreement is a contract that sets forth each party’s rights and responsibilities as they pertain to the project. While enforcement of a contract may require a court judgment—and collection of that award is by no means guaranteed—a Retainer Agreement records the parties’ intentions and may save the parties tens of thousands of dollars in attorney’s fees and costs to litigate the parties’ understanding of particular details. Continue reading