Good Game

XL Group

Insurance

Design Professional

10 ‘Must-Have’

Contract Clauses

Your firm’s survival in the marketplace

may depend as much on effective risk

management as anything else. And a

key ingredient in managing risk is having

the right professional services contract

in place. A strongly worded, legally

enforceable, written contract can spell

the difference between a great project

with a client who’s likely to work with you

again and a project you wish you had never

agreed to take on.

To help you build a better contract, XL

Group’s Design Professional team has

compiled this overview of 10 clauses

we consider “must-have” parts of every

contract.

Of course, this document, while meant as

a quick guide, is in no way intended as a

substitute for the full XL Group Contract

eGuide for Design Professionals: A Risk

Management Resource for Architects and

Engineers, available exclusively to our

customers.

© 2013, X.L. America, Inc. All rights reserved.

1. BILLING AND PAYMENT

WHAT

Contract language should address issues such as when payment is due, the penalties for late payment (e.g.,

interest, collection costs) and your rights in the event of non-payment (e.g., suspension or termination of services).

WHY

The more precisely you define and adhere to your payment terms, the more likely it is you’ll be paid promptly and

avoid fee-related disputes. Such disputes are often disagreeable and can even lead to the loss of future work from

the same client.

DON’T

Language that would permit your client to withhold payment of disputed invoices.

ACCEPT

DON’T

One of the most effective payment collection devices is to withhold submission of the client’s documents for plan

FORGET check or permit approval or for use by the client until you are fully paid.

2. CERTIFICATIONS, GUARANTEES AND WARRANTIES

WHAT

Your contract should never promise to assure the total accuracy of something (e.g., a subcontractor’s HVAC

installation) or confirm...