7 Tips for Video Production Contracts

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Kyrill00:07Yuh.

Kyrill00:10Okay, that's good. Rolling, you rolling? How's it going? Yeah. Let's do it. Let's do the clap. That actually helps with the synchronizing.

Kyrill00:26It's gonna have the Robert De Niro face throughout the whole episode. You wanna know about seven contract dips, huh? Yeah? Yeah, I think it's gonna be pretty good. It's gonna protect your business, you know? I'm telling you. Alrighty. Guys, welcome finally to season four or the 2024 year of Creatives Grab Coffee. We're going to be kicking it off a little bit differently this year with a few different kinds of content like.

Dario00:32Hehehehe

Dario00:36Mm-hmm. All righty.

Kyrill00:53For example, today's episode is gonna be a little bit more focused on a certain topic rather than just having a general discussion, seeing where it goes. We've been skating by on that approach with our episodes for the last three, four years. So we figured it's time to bring a little bit of structure to the podcast. But before we begin, I also wanna announce that we finally have a coffee sponsor for Creatives Grab Coffee. And I gotta say, these guys are really great. Give Detour Coffee a shout, check them out. And if you get a chance to try them out, go for it. Do we have any coupons yet or anything like that or discount codes? Soon. Yeah, so it's more so in the works, but we wanted to give a quick shout out to Detour because they've been great. They sent us some really, really good samples that I'm… Which one did you try, Dario, again?

Dario01:34Soon, soon we will be getting some coupons.

Dario01:51Oh, it's in my kitchen. I don't know it off by heart.

Kyrill01:55The one I got was Punch Buggy. The Punch Buggy coffee. This one is really good.

Dario02:02There's three in total that they sent. I don't know if we should just actually just run over and see and then come back. Ha ha ha.

Kyrill02:09No, it's okay. It's okay. Like we'll have more samples to show in the future. But again, this was just a little quick shout out. Once we actually have the full sponsorship in place, we'll go a little bit more in depth with some of the other flavors that they have. But yeah, that's just a little teaser. But anyway, so today, Dario, what are we going to be talking about today?

Dario02:29Okay, so today's topic-based episode is on seven tips to include in your video production contracts. And there's also a bonus one at the end of it.

Kyrill02:38Yeah. And these are a potential bonus one as well. And the reason we figured this would be a good one to kind of start off with is with any, with any, uh, business with, uh, service offerings, you want to have a good baseline and contracts are the perfect place to start. You know, when you're starting off, you want to make sure that your client and you are both on the same page of what to expect from each other. And we have found that these seven specific tips are should be more commonly placed in contracts and not always are. So Dario, do you wanna take it away with what the first tip is?

Dario03:14Yeah, so the first one's very straightforward. It's just about having a very detailed service description. So for example, what I include in ours is always like elements that are in your proposal pretty much. So the exact needs of what the client wants for the project, where you're going to offer the timeline and the project costs. the revision process, things of that nature. I try to be as detailed as I can in that section of the contract. So again, I'd literally just copy over stuff that is in the proposal document and try to incorporate, you don't have to overdo it, but just essentially just copy over most of the information that you guys were discussing. Because again, if for some reason you guys ever get into. like any disputes or like, you know, bumps on the road about what you guys were meant to offer and what they received and everything. You can always just refer back to the contract and say, hey, you guys came to us for this and this is what we said we were going to do, these are the dates and there it is.

Kyrill04:12disputes.

Kyrill04:30The biggest reason also is because scopes change sometimes and that is fairly common in our industry. Like for example, when you guys might agree on one thing that you need, like say initially you realize you need only one video deliverable, but then as you go throughout the project, the client realizes, oh, we actually need two or three deliverables to actually make this effective, right? And because you've already determined in the initial scope that it was just one, they… will assume and understand that more deliverables will cost more. If you don't, for example, include, I guess this is more so like a deliverables thing, which isn't one of the next tips, but this example kind of fits here as well, whereas like if the scope changes and you haven't defined the scope in the beginning, there could always be that gray area where it's like, oh, we assume that this was part of the original, right? So this just essentially makes sure that everyone knows what to expect from each other at this point.

Dario05:09Yeah.

Dario05:27To add to what you were saying, you could make amendments to the contract if what they require is greater than what you guys are created upon. You just have to add it to the appendix. There should always be an appendix 8 in your contract. And you just need to add it in and then just get them to sign off on it. That's the key part with that.

Kyrill05:49There's a little bonus tip for you guys. Keep an appendix A for amendments.

Dario05:54Yeah, because what we used to do in the past with this section, it was that it was very basic. Like, it would be like, we are creating, you know, Lapse Productions is creating a promotional video for Blank. And we might just put like the final due date, and that's it. It was like almost like a sentence or two. But over the years, we just decided to cover our

Kyrill06:17Yep.

Dario06:23put as much detail as we can. So again, even putting like reference videos, we include that in. All the dates for all the stages of the production are included in there. And yeah, timelines. And I basically copy over like the invoice in a way as well. And I put it in there under like project costs. Like it's just the invoice copied over into there.

Kyrill06:33Timelines.

Kyrill06:46Yeah, it's basically just putting all the necessary information and everything in there. And basically with the invoice, that's going to be part of the next one of the next tips as well. So the second tip is a transparent, transparent keeping. The second tip is having transparent payment terms. That's a little bit of a mouth, a little bit of a mouthful for some reason for me. But yeah, I thought you want to kind of go over a little bit about what that entails.

Dario07:01Hahaha

Dario07:12Yeah. So for this part, what we used to have in the past is just, again, one line saying we are owed this much plus HST. So subtotal plus HST. And then now what we do is we put like, cause our invoicing, how it works is that it's more or less, it's pretty much three invoices that we send the client. I mean, it'll either be. deposit plus most of the project cost plus the final remaining amounts, or it'll be like project management fee and pre-production plus and then the second one will be the production invoice not the one will be post-production invoice. We basically just structure it like that and we put like the due dates for each one and then the consequences also of not being paid on time for each one. So for example for like the first invoice if it's not it's issued at contract signing which is when they sign it. and then it's due at the same time, roughly, or by a certain date. Otherwise, the whole project can get canned. So we kind of put all those terms in there.

Kyrill08:17Or there are delays. Essentially there are delays. Like for example, if you have a certain date where everything needs to be booked for and you haven't paid any of those initial invoices to book our team, then we can't move forward because things change all the time. We need to book people and make sure that they're compensated properly as well. And this also is a good thing for the client because this locks people down, right? Because if someone's not paying someone, to book them in for a date and they have to wait a long time to get it, other projects come up all the time, especially when you're dealing with a lot of freelancers. This is an industry of freelancers. There's, it's rarely the case where you go to a video production company and everyone from the PA to the director is on staff at that business. It's extremely rare. There are some companies only that operate in that model. but those are on a much larger scale. Most of the time you're dealing with a core team and then production crew is usually freelance based from then on. So having good transparent payment terms and being very open about it helps make it less of a taboo subject for a lot of people. So, you know, it's just part of business. There shouldn't be any issue talking about money. It's a very straightforward process. Like, yep, this is when it's due. Let's do it. Let's book everybody in and let's move forward. And because of this, you and I never really have these issues now with clients, right?

Dario09:51Yeah, we were having issues because we were creating a problem out of it for ourselves. Because again, we didn't have these terms in place. And then, like you mentioned, it was taboo for us to talk about money with the client. But that was really because it was taboo for us, not for the client. Client didn't really care. Because they have a lot of other vendors and bigger vendors don't even… It's not a…

Kyrill10:10Yeah.

Dario10:17It's not taboo for them to say, hey, you got to pay by this date. Otherwise you don't get your stuff, right? Um, actually I had noticed that ever since we did add like these terms and the fact that I, we do go over it with them when they're signing the contract. Um, they're much quicker to pay, especially at least the first invoice. Second invoice too.

Kyrill10:38Cause they're also understanding it. They also essentially will understand what those are. Because sometimes when things are moving really quickly, I feel like, I don't know if clients always read through every single minute detail in a contract, or at least they might skim through certain things. So at least highlighting these key things is just to kind of help guide them, it's to let them know this is all important information in the contract. Make sure that we're all on the same page there. You know, it's fun.

Dario11:06Sometimes they're still a little delayed with that though. So I have to send them an email saying, hey, we're not booked in yet. So when is the payment coming? And then they panic and they quickly pay it off.

Kyrill11:09Yeah, yeah, yeah.

Kyrill11:18Yeah, you know, the other thing is having these different payment cycles helps keep cash flow within the business and protects everyone within it because there's always, everyone has these things included in their contracts from different experiences. And I remember one standout was from way back in 2014, just when we were starting the business, we had this one project where a client out in, I think it was Whitby. They sent us some video work that they had shot and they hired us just to simply do post-production. We did a one invoice type thing where once we've complete all the videos, they'll pay us for it. And it wasn't a lot. It was like, I think we did like 14 or 15 videos for like 1500 bucks. You know, it's early days, right?

Dario12:06It was $1,200 and they didn't want to pay. We settled on $900.

Kyrill12:09That's what it was, yeah. Well, what happened was we did all the work. We sent them the first round of revisions. Everything was there. They're like, okay, this is great. Thank you. We'll start reviewing and then move forward. Two weeks passed by. We don't hear anything. And then they email us saying, yeah, we actually realized we don't really need these videos to be done anymore, so we don't wanna pay you. And we're like, sorry, what? After we've done all the work. Oh yeah, and because of that we realized, okay, there's a lot of loopholes in our process now of this is what's going on, so let's protect ourselves going forward. But I'm sure a lot of other people in our industry have had similar situations where clients or leads decided all of a sudden, no, I don't want to pay anymore. But you know.

Dario12:59You know, that is a topic for another day, but we can briefly touch upon how we're kind of, because how we're mitigating situations like that now as well. Because the thing with that situation was that it was a new client, right? And that's the thing that always stresses me out a little bit. Every time there's a new lead that then becomes a client is that, oh man, are they going to pay or not? Right? Am I going to have that situation where it might not go through or am I going to have to fight for this?

Kyrill13:13Yeah.

Kyrill13:19Yeah.

Dario13:29I sort of got it. We've only had bad situations like that like two or three times in our whole 10 year run, but it's still something I get nervous about until we get the first invoice paid.

Kyrill13:39Nine, we're still at nine. We hit 10 years in September, so we can't say that celebration just yet, right? 10 years, don't round up yet, because we got to plan for that. It's gonna be fun.

Dario13:47Rounding up, rounding up.

Dario13:52Uh, so one thing we're actually, we actually started implementing it this month is a deposit. I don't know why we never thought about it, but we're doing like a 30% deposit on the whole project. Right. Well, that's the first invoice is essentially the deposit and then the rest. Yeah. For new clients.

Kyrill14:04Mm-hmm.

Kyrill14:08These are for new clients, just keep in mind, like people that you don't have relationships with. Once you have built a good relationship with a client that you've worked with for a number of years, you already know what their process is like. They know what your process is like. You don't need to go that far in that situation. Like for example, we have one client that we've been working with for more than three, four years at this point. And it's very simple. We even just have gotten it down to the process of. 50% at the beginning, 50% at the end, keeps everything streamlined and straightforward, you know, and everybody's happy and it's, yeah.

Dario14:45And I would say if it's applicable, if it's a new client and their company is, I don't know, like maybe I haven't heard about them before. If it's like a blue chip type of company, I wouldn't be too worried. But if it's like one where it's like, yeah, if TD is coming, I'm not going to be too worried. But like, if it's a company, you know, it's still around and everything, but they're not as commonplace as…

Kyrill14:59like TD.

Kyrill15:09Yeah.

Dario15:10something like a bank might be then yeah, I would I'd say putting the deposit in and it being due right away is A huge relief, you know, I think the easiest way to pitch it is while you're going through your whole sales Fun is just saying for new clients. We have a deposit system in place. So Just I think just put it in there and let's it

Kyrill15:21Yeah. Well, it-

Kyrill15:29Yeah, it sets expectations. It helps set expectations and allows everyone to kind of move forward. But anyway, I think we covered the second tip pretty, pretty.

Dario15:41There's one more thing I would add in there.

Kyrill15:43Sure thing.

Dario15:47One thing you should also add in this section is that anything, any amount outside of what you just stated, past a certain amount, you need to get written approval from the client. So for example, we have it set to anything above zero, like when you get approval from them, we used to have $50 there, but then some of the other bigger clients said we have to change it to zero. So I kind of left it at that. but you could set it to whatever, right? You could say anything over $100, you need to get rid of an approval from you. So that, something like that is.

Kyrill16:19You mean like expenses, like production expenses? Yep.

Dario16:22Yeah, so like let's say you have to get a backdrop for this and it's outside of the scope of that. If it's above zero, you have to get approval from them before you go ahead and purchase it, right? If you leave it at 50 bucks or whatever, 100 bucks, then you don't need to get rid of approval and you can add it in. But it's something you would need to let them know ahead of time. It's like, hey, if we have to spend over this amount, we have to get approval from you. But under that, no.

Kyrill16:52No matter what it is, you have to let the client know just so they know what to expect. So it's not like you're just piggybacking off of your contract terms to try to purchase equipment or gear that, or resources that may not really be necessary. But it's just to kind of help manage trust with the client. But that's like a, that's a whole separate detail there. But there's a lot with this one.

Dario17:15And last one for that point. It's really just this last bit. If there's an overdue invoice, you should put a term in there for overdue invoices where you would charge, like we have it set at 22% per annum, which means per year on the overdue date. Let me see what I put here.

Kyrill17:22Pfft

Kyrill17:34Mm-hmm.

Dario17:40Interest at the rate of 22% per annum will be charged on any invoices overdue from the date of receipt of the invoice by the client until paid. Again, normally you wouldn't charge it, but this is if you're dealing with a client that's been a big pain, and they've been skimping out, I think it's good to put it in there. 22% is a credit card, credit card interest fee basically, so…

Kyrill18:00This is to protect yourself with this. Yeah, this is essentially to protect yourself against the clients that are on their way out that you know that you're not gonna wanna work with going forward who have caused issues and challenges in this regard. It's just to kind of help yourself or to protect yourself in the worst case scenario in that sense. Obviously none of us wanna ever go through a situation like this and we don't expect this to happen with clients. But again. This is what contracts are there for, it's just to make sure everybody's protected.

Dario18:32Yeah, because if you ever have to go through the court system because they're not paying, then you can always say, hey, you know, you also have to pay the penalty for not paying on time.

Kyrill18:38Yes.

Kyrill18:44Yeah. Anyways, moving on now to the next point is one thing you got to make sure every contract has is a robust confidentiality clause. So Dario, what does that necessarily entail typically?

Dario18:58It's basically the NDA, it's a non-disclosure agreement. Some people have this separately, and sometimes a client might ask you to sign theirs. For us, we just included it in our contract, and I let them know of it, and it kind of simplifies the whole process. Sometimes they might even make you sign theirs, even though you have it in your contract, but it's just about showing the client. that you're pretty much a professional and look, I already included it. Don't worry about it. And it essentially covers that covers the basically lets the client know you're not going to disclose any of their personal information. That's, that's basically it. There's a lot like it's, it's a, it's over a page long in our contracts. I'm not going to go through it, but it just has like a definition of what the whole thing is, like what, what is a proprietary information, confidential information. Then. the agreement portion of it, like what we agreed to do with regards to that information that we're given, and then what constitutes a breach, and then just like a miscellaneous section. Like, we're not going to go through it because it's very long and you can find like a boilerplate version online anyhow, but it's just something good to include. You know, again, you don't need to include it, but it's just good to have.

Kyrill20:16It's good to have it because it shows the client that you're also thinking of them in this. Not just, it's not like the contract is there just to protect you. It's there to protect both parties. That's essentially what contracts are for. And you know, this clause also goes both ways, right? You know, for example, if you have a certain way about how you go about your process or any proprietary, I wouldn't say proprietary, but

Dario20:41I don't think it, no it doesn't cover, I don't think it covers, no the way we have it set up it doesn't cover. It's really like this is, it could go worse for you including it. But it's just meant to show the client that you're a professional. It's basically saying I'm not going to disclose your secrets to the public or whatever.

Kyrill20:47Oh, really? Okay.

Kyrill20:59Okay.

Kyrill21:05Yeah, yeah, exactly. Um, next we kind of touched upon this a little bit in, as an example, in one of the previous tips, but the net and the fourth tip is ownership and deliverables. And essentially what you need to do in this situation is discuss who, what the total amount of deliverables there will be for the project and who has the ownership of it for, for public release and things like that. Dario, do you want to go a little bit more in depth?

Dario21:33Yeah, like it doesn't discuss the total amounts, it just discusses like what we mean by deliverables. Essentially the total amount would be something you include in like the very first thing we talked about, which was the service description. That's where you put like the total amount. When it comes to like video deliverables, you're basically discussing what is like

Kyrill21:47Yep.

Kyrill21:52Yep.

Dario21:58a deliverable and in our case for example we differentiate between the final product and for example the raw files because sometimes the client thinks that they also own the raw files right? But we actually put it in the contract saying that no what we mean by deliverable is the actual final video unless you know in the service description like it's included that they're getting the raw files. So we even put that there as well. That's only unless outlined in exhibit eight or whatever that, uh, the client is also getting the rough files. Um, and we also put in that, for example, they're not allowed to, they're not. Owners of like, for example, the, the rough or fine cuts. So any revision, like any, any version that is like a, uh, like a revision version, they're not included there. They don't own that. So they're not allowed to post like. the V2 of that video. They're only allowed to post the final cut. So that protects us also from them posting something that's not good enough.

Kyrill23:00Yeah.

Kyrill23:06That's not up to scratch. Yeah.

Dario23:09Oh, actually, now that I think about it, the reason we put that in there is because let's say we did a V1 cut and then they wanted a completely different cut. If they owned the V1, they would essentially get two complete different versions. It might also be like two different videos, right? So that's also to protect us from that. I think that was the reason we included, like we specified like the final cut. Cause we have had some clients who are like.

Kyrill23:30Yeah. Yeah, but the f-

Dario23:39They wanted a complete different version. And they never really did post the alternate one, but they could have if they wanted to, right?

Kyrill23:42Yeah.

Kyrill23:46To be honest though, I feel like that's not, like this shouldn't be an issue for a lot of clients because usually they only want the final version anyway. So it's pretty straight.

Dario23:56Well, not none of the stuff we talk about should be, should be some, something that you actually have to like refer back to a contract that, yo, like we shot, we signed on this, not that, right. But again, this is the, it's like insurance. It's just there to protect you in case you need to be protected.

Kyrill24:05Yeah.

Kyrill24:12Yeah. With all that said, let's move on now to the sixth tip, which is, yeah, we are. Oh, there's still more.

Dario24:19Hold on, hold on. We're not there yet. So, no we're not. Because, yeah, so I also put in that until we get paid, it's not considered a final video deliverable. I also put it in there basically that until that final payment comes in, they're not allowed. Legal, you know? And, and, last one. It's just a promotional use, so…

Kyrill24:35Oh yeah.

Kyrill24:41Yeah.

Kyrill24:46Each one is the last one.

Dario24:49Well, you keep going to the next one. I'm not done going through it. The promotional use bit is basically, I put in a term in there that says, we're allowed to display all public videos. So the full, it's only a sentence long, I'll just read it. Lapse Productions preserves the right to display all final public video deliverables on its website, social media, and other means of marketing for promotional purposes without written consent of the client. So basically we get to just…

Kyrill24:51Go, go, go.

Dario25:19showcase it in our portfolio. This part, this section of the contract is often the one legal asks me to change. If we're doing… stuff with financial clients most of the time. It's internal, but yeah, if it's internal, because.

Kyrill25:32Usually if it's internal. Yeah. If it's usually, it's usually internal, then that's when they do that. Like I've never had it where if they, if they, if they're a public, or if they're releasing something publicly, then, um, and that they ask us to change this because it doesn't make sense. It's all there. It's like, it's, it's under fair. Honestly, it's, I feel like it's under like a fair, fair use to post a link that is already public, you know, when you think about it, it's

Dario25:40Yeah, yeah.

Dario26:00Yeah, but surprisingly, I still always get questions about that. They always ask, even though like the language is very clear, I'll still get them asking, does this mean you'll post it on your website? They ask me to clarify what it means. And it's like, I always say just like, if it's private on your end, just private on our end. If it's public on your end, it's public on our end type of thing. That's it really. But that's often the one that when it gets sent for legal review is the one that comes back. That needs to be updated.

Kyrill26:16Yeah.

Kyrill26:28Right.

Dario26:29Because I always, when you send a contract, it's always a good, what you should always say in the email is always ask them, here's a contract, let me know what legal says. So ask legal to review it. Because then they'll always come back. And actually one cool thing about that is that you'll often be able to fix up your contract by having their own legal team review it because. You have lawyers with a lot of experience, going through it and then telling you, oh, no, you got to change this to bad. And obviously it's not like they're trying to sabotage yours and just fixing up the language, especially if you're adding new terms. Like with ours, we have updated it over the years. And again, I'm not a lawyer, so the way I write is not like a lawyer, but they'll always edit it for me. And I'm like, oh yeah, that's what I meant to say. Okay, perfect.

Kyrill26:58It improves over time, yeah.

Kyrill27:09Yeah.

Kyrill27:20perfect and it's like, okay, now we keep it. It's like, yeah, this is a little quick tip about free legal advice, you know? Like.

Dario27:26Yeah, yeah, always ask their legal department to review it and tell you if it's good to go or if they want any changes because again, always makes it seem like you're open like it just avoids issues later down the line if anything does come up but really is just to make sure again, you guys go from the same page and added bonus they'll fix up your bad grammar.

Kyrill27:45Crossing the T's and dotting the I's. So you all good on this tip? Move on to the next one.

Dario27:48Yeah.

Dario27:55Yeeeah, uh, da da, here's my, okay, yeah, that's it, that's it.

Kyrill27:57Yeah, you're good. You're good. We covered quite a bit. So the fifth tip is cancellation and rescheduling. And I feel like this has happened to every production company at one point or another, because sometimes things happen where a client needs to reschedule or cancel something last minute. And honestly, like it happens. So it's not like you can expect that it won't happen no matter how tight your contract is. And sometimes there are acts of God. Like for example, if you have like a a CEO that has to come in to record something on a certain day and they're flying in from another country, their flight gets delayed or something like that, or something that is really out of the control. There are, you can place terms in situations where that is, where you can reschedule for that, but the point of this is essentially to make sure you're not lenient where a client chooses to cancel for just the sake of canceling at the last second, right? Like, do you wanna go a little bit more in depth on that, Dario?

Dario28:58Yeah, like this is a problem we dealt with a lot in the past and even, I mean, still to this day, like sometimes our projects get postponed and whatnot. Uh, the approach we've taken to this, before we get into the nitty gritty of the contract details is if it's a good client, like the first time we'll let it slide and we'll kind of say like, okay, this time we'll make an exception. But if it happens a second time, we're going to start adding a penalty to it. And we have made. a recent client aware that we would have to add a, not really, it's not really a penalty, it's more of like, I can't, I gotta pay the freelance or something, or something, right? Like.

Kyrill29:37Yeah, because you've booked, we were essentially booking the crew and the team for that day. So they've had to turn away work. We've had to turn away work for that day because of that case. And then if the client cancels at the last second without the chance for anyone to actually be able to potentially find other work, everyone's losing out, you know, for faults that are not their own, right? So everyone needs to be compensated. At least this is to be clear, this is on the production side of things. Like say if a shoot is canceled or rescheduled that the entire invoice or the entire project has to be paid for. It's more so specifically the production costs on that day specifically.

Dario30:17Yeah, yeah, yeah. Only the, again, cause it's usually, well, it's related to a shoot anyway, the shoot date, right? The time limit we put on it is that they need to give us at least 72 hours. We used to have 24 hours. I don't know why we put it at 24, cause that's like the day before.

Kyrill30:34That's the day before.

Dario30:37Cause I think what happened is we didn't have that. And then we had some clients canceled the day up early on. Remember? This was early on. It happened a couple of times and they were canceling the day off. And then we were getting, we got annoyed with that. So we put 24 hours. And then I think just last year we're like, why are we doing? I put a week and then I was getting pushback.

Kyrill30:46I don't remember.

Kyrill30:54Yeah.

Dario31:04from some clients when legal was reviewing it. So I put 72 hours.

Kyrill31:07Yeah, yeah. I mean, to be honest, you can hold firm on your on your approach depending on what you want. Like they can make suggestion, Liko can make suggestions too. But on situations like this, you have to also find what works for you and your business and your processes. If 72 hours is enough time, go for it. If you need a week, then that's another thing. You can also

Dario31:30You might get pushback. I was getting pushback from legal on the week.

Kyrill31:35It's interesting. Maybe if it's like, I guess it depends. The legal wants to make it easier.

Dario31:42I think we put seven, I think it was some legal departments who were giving me pushback. And then I also was thinking about the fact that on average a video is gonna be about, the whole video process is gonna be under a month, right? So like a week notice sometimes is too long. Cause like, let's say on average, like it's about a week of pre-production before you go shoot.

Kyrill31:59Mm-hmm.

Kyrill32:05I guess it depends.

Kyrill32:09What if it was five business days?

Dario32:13Did I don't think it would make it. It's too tech. Ah, I think 72 is fine. I, there was a reason it was because like, there was a reason it was because again, pushback and then on average it shouldn't, you don't, we don't have that much time for most of the projects anyway, so it would be like early on in pre-production. They would have to do the, the rescheduling, but usually a rescheduling happens, you know, the week of production, right? It's very close to the production date. Something comes up.

Kyrill32:19Yeah, I'm just saying like it depends

Kyrill32:40Yeah. Yeah, yeah, I guess it varies. And I think if you're doing bigger projects too, I think that's where this might also, this might also vary. You know, like I think the 72 hours is a good standard for straightforward corporate video content because, um, there's more flexibility and things like that. But then if it's like much larger campaigns or projects where it's harder to reschedule and move things like that, then maybe there could be something. longer like a week or two weeks depending on what kind of work or projects you're doing. But again, it really depends. This is just our simple standard approach for like say if you were to work on a corporate finance video or something like that, right?

Dario33:18Yeah.

Dario33:27Yeah, if you were working on a much bigger, like commercial level project and they want to reschedule, like let's say it's 50k and up type of production, I would put, I would put at least a week.

Kyrill33:40Yeah.

Kyrill33:43The other thing is people are flying in sometimes for projects, you know, like, like for example, like when I did that shoot for one of our clients last year where I had to fly out to Seattle and to, uh, and to North Carolina, imagine if 24 hours before the shoot, I'm at the airport. It's like, Oh yeah, shoot is canceled. It's like, okay, all the tickets have been booked all the time has been booked off, you know, and then it's like, that screws up a lot of other aspects of the shoot, right? Um,

Dario34:11There should probably be something in your contract with your freelancers as well that has the same number in there as well, right? So if you're making them sign your contract, they should probably say, if it's like a rescheduling clause in there as well, that matches the one in this contract, because I'm just thinking about it again. The one we have here is kind of hefty and from most of our projects is fine if we reschedule at least once. It won't cost us a lot, but let's say like we have a project where again, it's like a commercial and it's like 50k and up just in production costs and 72 hours before they let you know. And you have like, let's say for example, actors flying in, like you'd still have to compensate those people. So you would be, you'd be under on the production. So I would change that to probably a week or longer if we have a bigger project like that. And then we also have terms in there saying like, if they break.

Kyrill34:45Yeah.

Kyrill34:53You're still screwed, yeah.

Dario35:06that they owe the whole production cost and we can't book in another date until that's paid. Because think about it, you might be under if you have to do, if you can't, if you have to pay everyone that was involved, let's say something, at least 70% because that's in what their contract, that's in their contract or whatever, then you'd be under on the project. So I would, like again, you should put terms in there that really protect you, right?

Kyrill35:13Yeah.

Kyrill35:28whatever it might be.

Kyrill35:36Yeah.

Dario35:36Just in case, because again, if it's a smaller project, whatever, but if it's like a bigger one, that's what will probably scare me the most, is that, ooh, I might go under because of this.

Kyrill35:42Yeah. Especially when you have more and more people involved that are important for the project. Like you said, if you have to hire talent, whether they're flying in or not, like it's hard to organize things like that as well to find people who are available because you might book that particular talent because they were right for the project, but they're only available that day and then you cancel and then they're not available for the next two, three weeks, then what? what are you doing for your project? Then your project gets delayed at that point too, right? So this is a way to also help protect your client to make sure that everything is in place to be there for the shoot. But again, figure it out your own situation. What, sorry?

Dario36:15Yeah.

Dario36:26You're kind of tying in. Sorry, go ahead, go ahead. Figure out your own situation.

Kyrill36:32Yeah, I was just saying like, um, just determine what's right for your situation, right? What's right for that specific project. Every project is different, you know, weigh in what you think is gonna, what kind of workload or resources are going to be needed for that project. And then just adjust the details in your contract accordingly. Well, we're again, what we're just suggesting is like a good baseline to start.

Dario36:54Yeah, and you touched on like, the timeline gets extended and you're no longer available. There's three timeline extension parts that we have in our contracts. And the first one is just like a regular timeline extension. The second one is like timeline extensions resulting in crew unavailability. And then the third one is timeline extensions resulting in mass production unavailability. Those are good ones to have as well because the first one just really deals with what happens if the timeline gets extended. Um, so for example, here, what I have is, uh, if it gets canceled, less than 72 hours and they don't get a refund, just kind of clarifies like the details of that extension, uh, the one resulting in crew unavailability. So. If. a crew member was specific to that project and they're no longer available, they can't just say like, oh no, we still need to do it on this date with that person. Let's say for example, I don't know, like let's say, what do I have here? Like, I haven't really gone through these since I put them in the contract, but additional cost of their

Kyrill38:18I think you touched upon it all. I think we…

Dario38:20Oh, no, the key thing is the fee will be subject to variances depending on the new freelancer slash crew member that takes on the project. So yeah, I put that we don't guarantee the same rate as the previous individual, nor that the rate will be discounted based on the work already completed. Yeah, this was mainly because of editors. So Kyo, do you want to touch on that?

Kyrill38:30Ah, right, yeah, so like… Yeah.

Kyrill38:48Yeah. So like, for example, like a lot of production companies, we hire and source out other talent, not just for production side of things, but also on the post production and editors all have their own different processes. That's actually a big one that can very much factor, um, in the costs as well. Some have different day rates, some, uh, work very differently compared to other ones. So this is a me, this essentially helps us cover our basis if we need to adjust the entire process. So for example, if we were planning to do it with one editor whose process was to get it done within a certain timeline or in a certain type of review process, that's what we had planned for, but if it was canceled and they're not available, we have to work with a new editor or a different editor who works a little bit differently. So like obviously, LAFS has a certain level of standard of production quality and value that we go through, but. a lot of the time we still have to adapt to how other people also work. Right. And that is what essentially this clause helps kind of cover our bases on when that happens.

Dario39:56Yeah, we mainly added it because of editors, but I guess it's also applicable to other crew members as well. I would say more so like for cinematographers, not so much like make up, audio, grip or gaff, because those prices are kind of standardized. I think the cinematographer one is the one that has like more of a variance. Obviously you should always be adding your juice on top of whatever the rate is, but let's say, I don't know, for some reason.

Kyrill40:07Yeah.

Kyrill40:14Mostly.

Dario40:26most of the cinematographers you need for that day, most of the cinematographers that you know, for that day are busy and you have to go, you know, one level up above your regular rate, then it kind of protects you on that end as well. For the part resulting in our unavailability, what I've put in there is basically, we'll have to compensate, oh, okay, so basically.

Kyrill40:40Yeah.

Dario40:53Essentially, if we're no longer available for the project, then they have to compensate us for all the work done until then, and we're not on the hook for not finishing the project, if we're no longer able to do it based on the timeline requirements they have. That's what that clause is there for.

Kyrill41:09Yeah, essentially this what this covers is for example, if you've determined a timeline with a client on when certain deadlines and are going to be there for deliverables, but you also outline for example, when we send you a draft, we need the we need the notes within 24 to 48 hours, because that'll keep us on track. And then if we send a if we send a draft, and it takes and it takes along, like say a week for us to get the notes, that delays the entire project by a week, not at our fault, but because the client needed more time to look into it, right? So this is what you would have to discuss also with your client at the beginning of the project. It's like, hey, the way we work, when we send over a draft, we need notes within 48 hours. Is that enough time for you to be able to review everything? And if they say, this is where they can say, no, like we need maybe at least three, four days because we have to look at it, then send it over to so and so, they have to look at it, then we have to discuss and confirm, it's like, okay. Then from there, you can determine, all right, say you need an extra week between each draft, then you can give an alternate timeline based on that. So this is where you determine a lot of these things early on in the project discussion, but essentially, if it takes longer, if it takes longer to get notes, then yeah.

Dario42:27I wouldn't say… yeah. I would say the reason we put that in is… if you're referring to that one, it wouldn't be because… yeah, not if it's like a week delayed, it's more like it's been like three months and it's like you're still on like… we didn't get feedback on like the rough cut.

Kyrill42:40It's one, that's one.

Dario42:53type of stuff type of situation it's more like for those type of situations

Kyrill42:55These are. These are outliers, the ones that you're talking about. I'm talking about the more common ones of why certain projects can get delayed here and there. I guess this is not so much about our unavailability, but this can also outline why projects can get longer. What you're also talking about is those outliers where we've done the work with the client and then all of a sudden we've asked them, we're the last ones to have emailed them and asked them, it's like, hey, send us the notes, here's the video, you can comment on Frame.io and let us know your feedback. And then they just…

Dario43:10Yeah.

Kyrill43:28for like two, three months just completely disappear on us. And then maybe after that, they're like, oh, I guess we didn't finish this project. Let's move forward, right? It's like, look, at the end of the day, we're not there to chase our clients, right? Like some people will say like, oh, why don't you just send follow-up emails? And we've done that in the past. We do that and we have done that in the past and a lot of the time it's clients themselves get busy, right?

Dario43:41Yeah, I guess. Yeah.

Dario43:48Believe me, we do that. We do that.

Kyrill43:57So we're not gonna send an email every single week, right?

Dario43:57I think the reason we added that was because of those type of projects, but not like reading it out loud. I think it's just meant to protect you from, let's say the production date gets moved into a day where you and I would both be unavailable. And the client specifically wants like a producer from, or like a producer from Labs needs to be their type of situation.

Kyrill44:25Yeah.

Dario44:25then I would say that's like a get out of that situation free card. But the reason we put it in was because like in the post on the post side, we were having some issues where like it was getting delayed by months or like they would just like, it would just disappear on us. But I guess this is also good for, let's say they pay the deposit. I guess it's more so on the post actually because if it's production related, the post, yeah, because I guess it's on that end.

Kyrill44:52It's a lot of the time on the post. Yep. It's all about, because every client, it varies in terms of how long it takes them to review videos sometimes. Like for example, we've had guests on the podcast in the past who have talked about their specific like one to two month process period where they're very strict on the 24 to 48 hour feedback timeline. And if they don't get that, then it's out of their hands at that point. You know, it's like, okay, it's gonna take a week. Whereas like you could have gotten two or three drafts done within like say one to two weeks. If each draft took at least a week to get feedback from, then you also need time to edit it. So that gets extended even further. So two weeks turns into six weeks, you know? And that's what this essentially mostly will protect for. And that's where I see this one's value most of the time. Those other ones you were talking about, the outliers, there's a reason they're called outliers. It doesn't happen all the time. but it does happen still at the end of the day.

Dario45:54I think also I said it might not be applicable to production, but I think it actually is because let's say they need the final video done by a certain date, but they, I don't know, they only have a week of availability for the production after rescheduling it and we're shooting that whole week and we can't do it. Then I guess, yeah, it would protect you in terms of like, hey, you paid the project management fee or deposit plus the.

Kyrill45:59It is, it is too.

Dario46:22pre-production and we have done that stuff but we can no longer do this project I guess any other if you didn't have that in you might be liable to at least give a portion of the pre-production whatever back but in this case you're basically saying no what you guys have paid so far is I can't give that back so it does protect you on that end

Kyrill46:40Yeah, this is also in relation to things that happen that change as the project goes, right? There are also situations like one of our current clients that book us in every year for certain timelines for rush edits, right? So for example, if their availability is, say, for example, is on like a Tuesday and they would need the video by the Friday or the Saturday, you can plan for that, right? You can plan for that, you build it into the cost as well for that rush edit, booking off the editor's time, our time, and the preparation time for that, then that's fine, but that's why you need preparation so you know how to go about that. If we schedule a shoot day for one day and the final deadline is two weeks out from that, right, and it's a hard deadline, but then the client reschedules that shoot day to a week before that deadline, we haven't been able to plan for that, right? And that's where the situation can get very tricky because people haven't been booked off like that, you know, like to be able to adjust to that and things change, right? So it's tricky in those situations.

Dario47:51This. This ties into the, there's a section in here that is not, is related, but it's not in this part of the contract, and that's the revision process. So I actually include our revision process into the contract, but I put it right after the service description section. I literally just put like a line, and then below that, it's just revision process, right? And over there, I basically go through like how much. a minor revision costs, a major revision costs, and then what the step-by-step is. So like you get a rough cut, then a fine cut, then the final, and then I detail, I go into detail about what each one is. And another thing we put in there is feedback part. It's how much time we need for feedback, and then how much time it takes us to work based on that feedback, and then the consequences of not following those timelines. So you should put that in there.

Kyrill48:51Yeah.

Dario48:52just to cover yourself, because you never know. Again, it's easier to have them sign off on this stuff because then they can't say, you never told us. Because then the contract, you sign the contract, you're aware of everything.

Kyrill49:03Yeah.

Kyrill49:06Yeah. And essentially you're highlighting what potential challenges can always arise in a project and we're outlining how we mitigate those challenges so that they can expect that there won't be any hiccups going forward because we have already addressed any potential possible challenges or issues that could come during a project and we know how to work around that. So that's actually a benefit to the client as well right there. Um, Anyways, I think we've covered this pretty well at this point. Is there any last notes on this point or I think?

Dario49:40No, that's it. We can move on to the next one.

Kyrill49:42Yeah. So the sixth one is indemnity and liability. So they'll give a little bit of a breakdown of what that what that entails.

Dario49:52It's very, very straightforward. All you're basically saying in this section, it's literally like two sentences. All you're saying is basically that you're gonna hold each other, you're gonna basically not go after each other. And if you do, the most you can go after each other is the total cost of the project. That's it. So, if you want, you could just read it out so they understand. It was just, this section here.

Kyrill50:22Yeah, so here's our example. So each party shall indemnify and hold harmless the other party from any, from and against all loss, liability, costs, charges, claims, and damages relating to or arising from a breach of such party's representation, warranty, or agreement contained in this agreement. Keep in mind, like these are our contract terms. We're not, Dario and I are not lawyers, so we're not. This is not like legal advice necessarily in terms of like what you need to, yeah. This is what we have in ours. We're not telling you that this is exactly what you need to do. When you're creating your contracts, get it reviewed by a lawyer. Make sure that you have all your details clarified with a professional, you know, like we've done it ourselves and we're just sharing what works for us. By all means, bring up these points to a lawyer.

Dario50:55This is an example of what we have in ours.

Kyrill51:19on whether you should include it for yours and then they'll they will advise you on what's best for you. So that's just a little how do you yeah. Yeah. What is that called? Like the release like the release form or something. I forget what it's called. This is what yeah. No, I can't even I can't even I can't even remember what the protection term is.

Dario51:25Not legal advice. I am not a lawyer.

Dario51:33Yeah, see this is why we're not lawyers. It's called the disclaimer. I am not a lawyer.

Kyrill51:44This is when, this is where we lost the rest of the people that were listening to the podcast at this point. It's like, ah, these guys are, these guys are frauds at this point. Hey.

Dario51:54Ha ha

Kyrill51:56Yeah, anyway, so there's that one. And then finally, our last one is non-solicitation clarity. And.

Dario52:05No, no, tell them, read out the last bit. Read out the last bit. So, you set each party, and this is the part following that. So not withstanding.

Kyrill52:08Oh, right. Yeah. I didn't read out the last bit. So nevermind. Yeah. Notwithstanding anything to the contrary contained herein, the maximum liability of any party here under shall be the fee paid for services rendered by Lapse Productions pursuant to this agreement. It keeps everything contained within the confines of this particular project. That's essentially what it does.

Dario52:32That's the funny part about that is that section confuses the hell out of me because the part before it basically says you're gonna hold the other person harmless if something goes wrong but then the section following right, the next sentence is basically like if you are gonna sue the most you can sue is for the fee paid. So you're like but you just said you're gonna hold the other party harm- this is why I'm not a lawyer because I just got confused.

Kyrill52:54So, Otario, why do we have this in here? What lawyer said that we needed this then?

Dario52:59Well, the original lawyers that did our contract put it in there, and then everyone else is fine with it. I don't know. So when we did it…

Kyrill53:08No one has said no. No one has said no at this point.

Dario53:12So here's the thing, this is how we got our contract done. So when Carol and I started back in 2014, we were in our last year of uni, so I knew of the, oh no, we just finished, something like that. And…

Kyrill53:24No, no, we were still in uni, but we were getting close to the end.

Dario53:28So I was, it's funny, I was part of the business law program at Ryerson. And even though like I kind of don't understand law now, I understand a little bit. Anyways, it's just too much reading, man. Too many essays. I never figured out how to write essays properly. Anyways, they had this thing called the law clinic, whatever, right? And in our last year, you basically got assigned to company and you did legal documents for them with the help of.

Kyrill53:38This is why he went into video, he was not hacked out to be a lawyer. Hehehehe

Kyrill53:47Hahaha

Dario53:58one of the Bay Street law firms. I forget which one. I think it was Miller Thompson. So basically when we started our business, I was like, oh, I'm signing us up for that because we can get our legal documents done like a Bay Street firm. I think it was Miller Thompson. So we got them to work on our contract. So they're not stupid. They're like one of the top five in Canada. So if they put it in, I'm sure there was a reason why they put it into our contract.

Kyrill54:13Yeah, yeah.

Kyrill54:21You know what?

Kyrill54:25You know what? This made me realize something. So another fun fact, Dario went for business in law and I went to Ryerson for marketing. So we also had a marketing clinic as well, but it wasn't a clinic, it was a marketing capstone thing. So the law one was very useful for us because it got us started with a baseline for our contracts. But now I realize, yeah, it's true. We actually had a real firm doing the work, just overviewing the work of the students. Whereas the marketing clinic was just literally having students do

Dario54:51Yeah.

Kyrill54:55a marketing plan for us with no experience or anything like that. And I was always wondering, like, why was that marketing plan that was presented to us not that great? It actually taught us what not to do rather than what to do.

Dario55:10It was funny, I remember when they were presenting it to us, I remember looking at them and going, they didn't do the work, how do I know? Because when I don't do work, I present like that. All right. Ha ha ha. Yeah.

Kyrill55:21My favorite, yeah. You know what's funny? Cause I was also in that class too, right? So I was a client and also a student, but I didn't do it on my own company. I did it on another business. So I saw what that b-

Dario55:33You should have done it on your own company, I would have helped this out more.

Kyrill55:37No, it would have been, how do you say, no, that it's a conflict, right? But what it taught me was like, okay, so now I know what not to do here. And then I took that learning and then I applied it to our act to my groups project. Then we ended up getting a 90. But anyway, so that's that. That's how we got our contracts through a legal clinic as a starting point. So if you know, people. Actually, that's a good suggestion for any production company starting out. Reach out to your university or any university that is looking for businesses to do legal practice work for, then that could potentially be a good start. If they offer it, yeah. So Ryerson is one that offers it. So I think they actually have a full… Yeah, sorry, Toronto Met or whatever. We don't go to the Met, okay? Anyways, final…

Dario56:16If they offer it. If they offer it.

Dario56:22It's no longer called Ryerson.

Kyrill56:33Final tip for our contracts is non-solicitation clarity. So take it away, Aaron.

Dario56:41Take it away, and it's a second last one. There's a bonus one if you made it this far there is a bonus Don't believe it or not non solicitation so Funny story about this I couldn't figure out this word I couldn't figure out what the correct like this was the word I was looking for non solicitation But I could I didn't know I couldn't figure out. I'm like it's a word. It's not this one, but it's that and

Kyrill56:42Hehehehe

Kyrill56:46Yeah, yeah.

Kyrill57:00Hehehehe

Dario57:08This is why asking their legal department to review it is helpful because they then told me to change it to non-solicitation. I put something so stupid, like I forget, it's so dumb, I can find it.

Kyrill57:22What was it? It was like, no talking to the crew.

Dario57:25No, it was like, it was really stupid. I remember going like it's not, it was like the slang for not solicitation. It was a

Kyrill57:35None backstabbing. Hehehehehehe.

Dario57:37If you want to cut this out of the actual podcast, I can go look for it. But it was like the slang word for that. I forget. I don't remember, but it was the slang version for it. I was like, I can't figure out it's got to be this. But they then told me, no, you got to change it to this. And I'm like, oh, that was the word I was looking for. But basically, yeah, non solicitation of crew members or employees is basically they can't go.

Kyrill57:45It's fine. It's fine.

Kyrill57:51Either way.

Kyrill57:57So what does it entail exactly?

Dario58:05and hire your freelancers or employees behind your back. Because I'm sure it's happened where your freelancer hits you up, it's like, yo, your client asked me to shoot this for them. What should I tell them? Right? Like it's happened to all of us at least.

Kyrill58:22or sometimes they don't, or sometimes they don't even reach out. And that's when relationships break down too.

Dario58:28But the thing is, like again, this is just in there to like, if you got one of those, you know, clients that you really don't like and you're like, listen, I'm prepared to go to war with this guy. But for us personally, we've never had a situation where the freelancer didn't tell us, or they might have not told us, but we would have noticed it, right? But we have had situations where a very few amount of clients have tried to reach out to the freelancer. And the freelancers are like, you know, what's going on. And then, where was, like, I know we've told the freelancers, like, oh, okay, that's good to know. I don't want them as a client anymore if they're doing that. So if you wanna go ahead, that's what we've done. Cause it's kind of weird. If they're gonna go and do that, you're kind of like, okay, I thought we had a thing, but if you just want the cheapest thing, like go for it, but I'm not gonna, next time you come here, I'm gonna charge you a lot more as punishment.

Kyrill59:11Yeah.

Kyrill59:22And this is the fun. Yeah, the funny thing is that this is more common than people realize, because like we also collaborate with a lot of other production companies, people specifically that have been guests on the podcast as well. And we've helped execute projects for them in Toronto for their own clients. And then we've had randomly emails where people send us, it's like, hey, like we worked with you on this, can you quote us for this? And then I'm like, wait a minute, Dario, wasn't this their client? And then… And he, Dario was like, yeah. So we called him and let them know. It's like, hey man, what the hell's going on? And then even their surprise is like, they're like, what, he went to you? Man, these guys are cheap. They were expecting something cheap. So we give them an expensive quote to make them realize how dumb that decision was.

Dario59:56Hahaha!

Dario01:00:03Yeah, yeah, yeah. And again, with…

Dario01:00:11And usually with that situation, we always say like, what do you want us to do? Like, cause it's your, it's your client. And we always say like, listen, go talk to, we did it through that client. Hey, like we did it through that production company. So go talk to them first.

Kyrill01:00:28Yeah, go talk to them. It's like, this isn't what we do. Like, go talk to them.

Dario01:00:31Yeah, yeah. It's almost like go get the blessing from them to come work with us, because we don't want to get in the way. If they're not happy with it, yeah.

Kyrill01:00:40We make them talk to the boss. Not the boss, we make them talk. No, what is the phrase I'm going for? It's like.

Dario01:00:47Let's go get the blessing. Cause it's like, I don't want to step over it. I like, this is all an industry of like connections. I'm not burning a bridge.

Kyrill01:00:53We make them confront the situation. We make them confront the situation and hold them accountable to it. It's like, listen, you're trying to go behind their back, go tell them how you were trying to do that. Ha ha ha.

Dario01:01:04Yeah, it's just awkward, man. It's like, I don't, cause it's like, look, if you're doing that to them, you're going to do it to me. So even for us, it's like, why would I want to take you on as a client that I would really care for and build a long-term relationship for when you're just going to leave me and go to someone else? Like, it's going to be one of those one-off things. It's just awkward. The thing I hate is that it just makes everything so awkward, you know? Like.

Kyrill01:01:21They belong to the streets. Hehe Those clients, they belong to the streets. Hehehehehehehe.

Dario01:01:33Just go talk to them and then if they say go talk to us, then okay, whatever. But if it's like, if you just come to us, I put that in there because we were doing a project for a friend of the guest, for a friend of the show. And we were hired just as crew, right? And I saw during the shoot that the marketer was grabbing all the freelancers contact information.

Kyrill01:01:33Yeah.

Kyrill01:01:37Yeah.

Kyrill01:01:51Yeah.

Kyrill01:02:00Ha ha ha.

Dario01:02:02As I messaged him, I'm like, yo, your client's about to leave you. He's like, he's like, what happened? I'm like, I was like, they're grabbing, they grabbed everyone's contact information. I was like, don't, uh, don't expect more. Like these guys will drop you any second.

Kyrill01:02:05That's wild.

Kyrill01:02:16Did they end up dropping them?

Dario01:02:19I still do work with them. Well, I don't know how much work they're still doing with them. Maybe for bigger projects, they bring them on, but it's so like sketchy because it's like, we go through the effort of finding talented people for the project. Then like, kind of like steal our knowledge and then just to steal those people is so weird, but even for the freelancer, like we have had it where it's like, they just say, look, just talk to Carol and Dario.

Kyrill01:02:39This is like…

Kyrill01:02:47Yeah, it's a form of head hunting almost.

Dario01:02:48because it's weird when they… Yeah, like it's kinda, it's kinda, like it's not cool when clients do it. And if they do it, then again, I wouldn't go after them legally, unless you wanted to, but it's more so just to protect yourself. But it's a great way to spot red flags in clients. Cause if they do that, then you already know where you stand with them.

Kyrill01:03:09Yeah, it- Yeah, it's a good way to kind of determine what the client or the lead's character is at that point. It's a way of filtering out people that you don't really want to work with. It's like, or if in this situation, it's like, okay, so you're just looking for a one-off, so you're like, I'm not going to waste my time with this because. Look, the whole point of like, why we're also trying to find clients is not to do one-off projects. Like we want to try to. build a relationship so that there's more consistent business coming in. Because there's that classic saying where it costs 10 times more to sign a new client than to serve an existing client, right? Because the amount of time and effort it takes to bring in a new client is very different than working with the same one year over year. Because if you're working with the same client year over year, you don't have to explain your process to them. You don't have to explain your contracts to them. You don't have to explain the scope as much. You already understand what is needed and you guys can just kind of move through it, right? New client, you have to do meeting after meeting, call after call sometimes to really drive the point home as well, right? Like we've had that where like some new clients have come in and you'd have to have like maybe three calls, four calls over the course of a few months before they're finally ready to actually move forward with a project. And then you put in all that time and effort. but now you have a consistent client so then it was worth it, right? But why would you go through that entire process if you know that they're gonna drop you like a hot potato just for a quick buck, right?

Dario01:04:46Yeah.

Kyrill01:04:47So anyway, so those are our seven main tips, but we have, as Dario mentioned, another bonus one for you, which is.

Dario01:04:57Expiration.

Kyrill01:05:01and you want to elaborate a little bit more on that. It's like, basically it's the best before date, like higher lapse before it expires. Before, yeah.

Dario01:05:02hahahaha

Dario01:05:13I think we kind of touched on it briefly in other points, but basically it just states the Again, like if it's been too long, like if the client like stopped communicating with you for a period of, I think I put six months in here, then the project is considered closed.

Kyrill01:05:32Yeah, because a lot of the time, like things change for clients on their end marketing wise, right? So they might be working on a project and then they might realize like, oh, you know like our goals have changed. Let's just move on to something else and then whatever at that point. That just basically shows that there is an actual expiration date for any kind of project. But we've already kind of explained this in depth with examples in previous points, but.

Dario01:05:58Yeah, basically, basically just, you know, if it's been a while and you've tried to communicate to the clients and they still haven't gone back to you and it's been again, here I have six months, you could do something else. Actually, I might change it to something shorter. Then you can just say that the project is considered finished, even though it might not be fully finished and no refunds will be issued for whatever work is still not completed. So for example, if

Kyrill01:06:02Ahem.

Dario01:06:27the client already paid you the full amount, let's say 10,000, you've done 6,000 of that work, the remaining amount is just in the post, but they just won't give you feedback, won't let you know what's going on or what they want, then you can just close it off at that point. It's just a way to just, like again, and if they wanna restart, then you have to issue a complete new contract. That's how we have it set up.

Kyrill01:06:44Yep.

Dario01:06:53Very straightforward.

Kyrill01:06:54Yep, I think that pretty much covers everything. Those are our seven plus one plus two tips on what to include in your, yeah.

Dario01:07:03Oh, Kyrill, sorry, sorry. I put abandoned, I said abandoned, but another term you should include is also delaying. If they keep consistently delaying the project, then that still counts as part of this clause.

Kyrill01:07:22But what does, but then you'd have to define delaying, right? Like, so delaying can't mean, for example, they're trying to still determine some creative elements for the project. Projects delayed, but that's on a. But that's for the.

Dario01:07:32So I have, so what I put here is three different options. So I did like, if this happens, blah, there's a paragraph of stuff. And then I put, or this, or this other paragraph, right? So for that is, if the client, one of them is, for example, the client has continually delayed or abandoned advancing the project for a period of six months after the signing of this contract.

Kyrill01:07:47HHGH!

Kyrill01:07:56Yeah.

Dario01:07:59So, I think I put for this option, the deposits won't be refunded or whatnot. So it could be something as simple as they keep delaying the production dates. So let's say we risk the paid project management fee and the pre-production and they keep pushing the production by like a month, by a month, by another month, by another month. Let's say you're like, listen, I'm tired of dealing with this client. I don't want to have to pay back the pre-production.

Kyrill01:08:05Mm-hmm.

Dario01:08:28This is just like a get out of free card. It's like, look, it's been over six months since we signed this contract. This contract is now null and void. We can't give it back that. So we have to sign a completely new project, new contract, right? Because sometimes they might just be wasting your time, right? So it protects you with like, again, all the three stages, pre-production. Let's say they gave you the positive, right? They keep delaying it. Yeah.

Kyrill01:08:48This is why you have deposits. This is why you have deposits so that it holds your clients accountable to move, to see the project through, right? It's a motivator for that because yeah, like imagine if you don't do deposits with a new client and like you have your invoices sent out later because you have your payment terms, then it's like all of a sudden like, oh yeah, we're done. We don't wanna do this anymore. And you have no money in your account as a result of that and all that time and effort you spend. It's not onboarding them, doing pre-production prep work and all that kind of stuff then just goes out the window at that point. That's what deposits are there for, following through.

Dario01:09:22So, so, so what I have there, I just quickly read it. Excuse me. It was basically if the client has paid the deposit and no pre-production work has begun, then this. The next one is like, if the client has paid blah, blah and the pre-production work has begun, then this. And then the one, the other one is if, like you can just include it for each stage of your process.

Kyrill01:09:49Yeah.

Dario01:09:52So often with contract is better to be broad than really define your stuff, but for stuff like this It's probably better to just stipulate exact Situations because again, like if you ever have to go to court for this stuff You have different situations. One of them is going to be applicable right, so you can just present it to Yeah, like again if it's all this I Mean that they'll probably take a while, but it's more so about having

Kyrill01:09:59Yep.

Kyrill01:10:09Yeah. And then it makes everything straightforward. And those legal proceedings won't take a while as a result. as belong.

Dario01:10:21all the options available to cover all your bases, right? So then it's less open to interpretation, you know?

Kyrill01:10:23Yeah.

Kyrill01:10:28Yeah. But anyway, like the whole point is these are all there set in place to help protect you and your client. You never want to have to go back to them with the client. That's not the whole point of having these. You want to build good relationships and you should always be striving to do that and maintain a level of professionalism between yourself and the client in that relationship. And as long as you go by that mantra, then you're going to do great work with great people and That's essentially the goal.

Dario01:10:59Yeah, and my only note to end this off is basically, again, have the legal review it. If they come back for you with changes that you don't wanna do, you don't have to include them. Just remember that. Like you can always push back on their notes as well. So don't just bend over backwards for whatever their legal team wants. Because sometimes it might not be in your best favor. You just have to make a judgment call.

Kyrill01:11:22Usually, usually it's not in your best interest. It's usually in the client's best interest, usually.

Dario01:11:27It su- surprisingly enough, su- like every time we've had to make a change, uh, from their legal team, it's always been fine. Like I think they're actually not allowed to, or I think that like if it ever goes to like a court, the judge would probably not look favorably if it's something that was in their best- I don't know, I'm just talking out my, you know, but uh, I'm not a lawyer.

Kyrill01:11:52Yeah, we're not lawyers guys. Dario took a moment of pretending to be a lawyer, you know. He watched a little bit too much Suits back in university, you know.

Dario01:11:57Normally like I think it's because every time we've had notes come back, it's usually from a blue chip client and their notes are nothing nefarious. I think maybe if you deal with some smaller client, like small to medium business, I think maybe small business you might have to keep your eyes open. Usually blue chip companies we haven't noticed anything.

Kyrill01:12:07Yeah.

Kyrill01:12:19Dara, this is the easiest thing to just recommend. If a client's legal team comes back with a suggestion or a change, have your own lawyer review it and make sure it's all good. That way you have peace of mind. That's it. Just have another lawyer take a look and just confirm.

Dario01:12:32Sure. You could also, you could also probably just as chat GPT, it's like, I don't understand, like if it's confused, it's like, what does this mean? Actually, no, one cool thing you can do is you could save your contract as a PDF and then say, Hey, this is my contract. Feed it to chat and then say, this is the term, this is the section they want to change. They want to change it to this. Would this be in my benefit or not? What does it really mean? That's another thing you could do too. I just thought about that.

Kyrill01:12:59I wonder if there are AI lawyer, I wonder if there are AI lawyer systems already in place. I feel like I might know one or two like that.

Dario01:13:06Dude, my buddy was just finishing up his law school and he said he was just using CHEDGPT to understand and interpret a ton of his readings.

Kyrill01:13:16Oh, just for him to understand the stuff and just have it explained to him in a good way. That's cool.

Dario01:13:20Well, well, the thing is, he said they would have to make him read like over 100 pages a day or something. So he's like, he was having a hard time just getting through the work, right? So he would feed it to chat and have it like interpret it for him and make notes and everything.

Kyrill01:13:34I don't know, it's not a good thing when you think about it, you know?

Dario01:13:39I mean, listen, I'm just saying lawyers are gonna get replaced very soon.

Kyrill01:13:45If it's a supplementary thing, sure. But if you're not actually, when you're in law, imagine if like you had a doctor or a surgeon that went through medical school through Chad GPT. I don't think you'd want him under the knife. I don't think you want to be under his knife.

Dario01:13:59Look, I think all those professions are on the way out anyways. I mean, do you really trust someone?

Kyrill01:14:04Surgeons are not on the way out, Dario.

Dario01:14:08Buddy, what are you talking about? They're starting to do like remote surgeries now, which means like pretty soon they could probably just have an AI do it. Five to ten years? It's not out of the equation.

Kyrill01:14:17Maybe, maybe, but anyway, that's all stuff for another episode.

Dario01:14:19You know, they've already, they've done studies, look, they've done studies where CHHBT gives better medical, not advice, they're able to diagnose better than doctors, which I'm not surprised. How can you trust someone that hasn't slept in two days? Have you ever worked 12 hours straight? You're like, you can't even think properly.

Kyrill01:14:31Advice. Diagnosis. Mm.

Kyrill01:14:43That's true.

Dario01:14:47Those guys are doing surgeries, so I mean, I would probably trust an AI over a doctor in the future.

Kyrill01:14:53Fair enough to that point. But anyway, we're digressing from this episode. But anyways, those are our seven plus one or two tips for the contracts. Let us know if there are any interesting points that you or tips that you have done for your contracts and maybe we'll get a lawyer to review and see if it's worth it for us to put in ours. But yeah, anyways.

Dario01:15:14Yeah, yeah, comment them down below. Maybe we might incorporate it into our next contract.

Kyrill01:15:19And if you guys have any ideas for potential topics that you want us to do some research on and kind of discuss in future CGC episodes, also let us know and we're always open to that and thanks for watching.

Dario01:15:32Oh, and before you go, we do have a blog post for this episode. So if you want to see the exact clauses that we use on our contracts, I did put screenshots up under each point. So if you want to know, go check out the blog post. It'll be linked somewhere here in the description. So yeah.