While everyone recognizes the fundamental purpose and principles
behind contracts, it is a topic rarely discussed on the engineering
side of broadcast radio. This is an unfortunate lapse, considering the
variety of contracts most engineers draft and endorse during their
careers. What constitutes the nuts and bolts of an effective contract
in a broadcast engineer's context?
There are a couple of common fallacies about contracts. Chief
amongst these is that only written contracts are enforceable. Not so.
Offers made and accepted verbally or in written form (letters, notes or
e-mails) may constitute a contractual agreement and could come into
play should litigation later arise. Having a specific written contract
that confines both parties to the terms within it will avoid this
pitfall. Be careful and precise regarding your promises and
requirements, while paying close attention to your client's
expectations in return — and put it in writing.
Contracts are designed to protect the
interests of the parties involved.
Another dangerous misconception is that a good lawyer will find a
way to remedy a disagreement after entering into a poorly written
contract. While this is a possibility, it invariably becomes a question
of how much it's going to cost. A contract is a legally binding
agreement between two parties, and any misunderstandings or vague
terminology at the signing will remain for the duration. Thus, the time
to get legal advice is before, not after the damage is done.
In the end, every contract is about protecting the vital interests
of both parties. An ethical businessperson should take every step
necessary to do just that when writing a contract.
The main ingredients
Every contract an engineer writes or signs should contain some basic
elements. First is a list of the goods and services he commits to
providing to the client. This would cover quantity and quality. For
example, the engineer might agree to handle maintenance for a remote
transmitter facility. Among the issues that need to be addressed is
exactly what systems or pieces of equipment he will be responsible for
maintaining. If an ac disconnect switch burns up, taking the
transmitter off the air, is he responsible for replacing it or is the
client obligated to provide an electrician to perform the service,
including all outlets and service disconnects? If an engineer agrees to
supply parts, he may want to stipulate that he will provide OEM items
at invoice, plus a certain markup percentage. Of course, the minimum
and maximum hours of service he will provide under the heading of
routine maintenance should also be clearly defined. What kind of
reports will the engineer provide? A good maintenance contract will
spell these things out.
Another important element of the contract is delivery time frames
for goods and services rendered. Some engineers tend to minimize in
this area, believing that if they don't specify schedules, they can't
be held to them. While vague language may buy the engineer a certain
amount of flexibility, it can also bring problems. The law provides for
certain standards of timeliness as deemed professionally appropriate.
If a client believes that the service was inappropriately slow and the
contract doesn't clearly specify those terms, they may have some legal
basis for litigation. It is best to specify some mutually agreeable
range of parameters.
Payment rates and methods should also be unambiguously specified.
Otherwise, the engineer may have completed a project for a client, only
to find that the client wishes to pay them with barter items.
Designate a particular individual who will serve as the point of
contact with the client. This person should be responsible for
evaluating work performed, authorizing purchases or additional
expenses, and providing you with all necessary information and feedback
from that client. Furthermore, the engineer should define his status as
an independent contractor, including his qualifications and
capabilities, as well as a basic description of what tools and
specialized equipment he will (or won't) provide. Suppose a problem
develops and a TDR or spectrum analyzer is needed to diagnose the
problem. Who will be responsible for the rental costs? Putting it in
writing will eliminate these potential problems.
Finally, there are issues of indemnification to address. Both sides
need to be protected; the client from damages and claims resulting from
the engineer's errors, negligence or omissions and the engineer, from
damages, fines or losses resulting from the client's failure to act on
recommendations or information he provided. In addition, the engineer
should provide a statement regarding his liability insurance policy.
Include something known in legal-speak as a force majure clause, which
is a statement that acknowledges the possibility that forces beyond the
engineer's or the client's control, such as terrorism or acts of god,
may serve to excuse the engineer from what would otherwise be
considered as a timely execution of the contract's provisions.
Remember that because every job is different, every contract may
have some unique clauses that address the special needs of both
parties. In some cases, the engineer will be called on to assume all
engineering duties for a station. Naturally, this will necessitate a
somewhat broader contract. A sample contract is available through the
SBE at no cost to SBE members. Although not intended for use as is, the
SBE sample contract makes a great template for the engineer, the client
and the attorney to work from.
If you don't have an attorney already, it's time to find one. The
cost of having a contract reviewed can vary, depending on the
attorney's hourly rate and the complexity of the document, from as
little as $200 to $1,000 and up. It's a smart investment, especially if
you think of it as legal preventative maintenance.
Krieger, Radio's consultant on contract engineering, is
based in Cleveland and can be reached at email@example.com.
To request a copy of the SBE's sample contract engineering
agreement, follow the link on the SBE website at www.sbe.org.