A retainer agreement template is a work-for-hire agreement in which client retains the service of a professional for work to be performed in the future. This agreement falls between a one-off contract and permanent employment that may be full-time or part-time. The main purpose of retainer agreement is to set the terms of the relationship between the parties and sets a retainer fee.
Moreover, a retainer agreement is commonly used by the lawyers, accountants, website managers, and business consulting agencies. Nowadays, freelancers are also used these types of contracts. A well-created agreement is beneficial for both parties.
All retainer agreement will vary on the basis of the services desired and rendered. A service provider should be professional that offer their services to a client or company. Your agreement should explicitly define the services they you have to perform for the client. This is referred as the “scope of engagement.” The agreement should clearly explain the payment terms and the retainer fees. You may also like Construction Agreement Templates.
What to include in a retainer agreement?
A retainer agreement should contain all essential elements. It is crucial to assess your client’s requirements and tailor them to fit the services that you want to provide. Let us discuss below some essential elements to include in your agreement;
Parties of the agreement:
Properly identify the client and service provider in your agreement.
Scope of engagement:
This is the most important element of a retainer agreement. It describes the exact services the client will receive.
The retainer fee is set by this section in the agreement. Retainers can depend on an hourly rate and flat fee. They can be set on a contingency basis.
It is important to include who is responsible for expenses. In the agreement, state what costs the client is responsible for.
How to pay:
In this section, explains when and how the service provider will get paid. A payment schedule and the method of payment accepted by the service provider should be explained here.
Both parties have right to terminate the retainer agreement at any given time. But, you should also provide notice to the other party as this is common business etiquette. This way, other party has enough time to make other arrangements if necessary.
Throughout the course of agreement, it is important whether the service provider or client divulge confidential information. Both parties should protect each other’s confidential information. In some cases, a retainer agreement attaches a more detailed confidentiality agreement or non-disclosure agreement with it.
You should also include a dispute resolution provision in order to inform the parties how to resolve a dispute should one arise.
Mistakes that you should avoid in retainer agreement:
Scope of engagement is the most critical element of the agreement. This section has the power to make or break the validity and enforceability of the agreement. Therefore, it is important for service provider to clearly define their scope of services to the client. In case, the client requests any other service other than the scope of the standing retainer agreement then you should create another agreement for those services.
Not including the payment structure in the agreement is the other common mistake. The client does not know how or when to pay without having payment schedule in place. Moreover, the client may feel himself in an awkward position when requesting payment.
Different statutes and regulations of what can and cannot be included in a retainer agreement may vary from state to state or local agency. Before finalizing your retainer agreement, it is essential for you to reach out to a lawyer to obtain legal advice.
In conclusion, a retainer agreement template explains the different obligations and expectations involved in a contract between a professional and a client. This may involve ethical work principles, retainer fees, modes of communication, and professional ground rules.