Terms and Conditions Apply

Terms and Conditions Apply
Massive Disclaimer: All views mentioned in this article are personal and cannot be misconstrued as best practice or word of law in India or on our beautiful planet Earth.
I have been wanting to write this article since the very beginning of Animators Guild online in Jan 2020 and finally have gotten the time to get down to it. First of all, if you are a freelancer or young entrepreneur, get yourself a good accountant. Then go get yourself a good lawyer. These two individuals/companies are going to be your best friends for life. This article is an overview of the terms and conditions we have used or have had to add with every experience over the past decade. As the game levels up it is a constant work in progress as no two projects are the same and thus there are tweaks and insights that need to be added, removed or updated every time. Having said that we have had our share of great clients who became good friends and vice versa along with those weird resemblance of creatures who dare call themselves fellow humans. It is divided it into two sections. Invoicing and Design.
Well, here it is.
* Advances. Do not work without advances. We only start with 50% advances hitting our bank account. This is a good gauge of the clients sincerity towards the value of the project and your work put into it. It also cements the following invoicing terms and conditions as having been approved by the client.
* Milestones. Adequate payment milestones have to be put into place for the work to be done. This also keeps a check on unrealistic timelines (if any) and at the same time makes sure you are paid before starting every leg of the project lifecycle.

* Bank Details. It is very important to mention all your bank details for online money transfer, NEFT, RSTG, SWIFT (for foreign remittance).

* Whose name is it? If payment is by cheque, then the name under which the cheque should be made.

* No Returns. It is imperative to mention the fact that once any payment is received it shall not be returned no matter what the circumstances and outcome of the project.

* Taxes. What TDS to be deducted by the client? If the project engagement is contractual then under 194C at 1% or if clubbed under services then 194J at 10% and so on. This helps in planning the finances of the project and later on the taxes to be paid. Trick: Its always good to mention that taxes and other government levies if applicable at the end of the final submission will be charged extra. This is especially useful for long drawn projects which multiple variables.

* Set a final payment date. This varies from industry to industry. Some like manufacturing have a 90 days payment cycle while most other industries range between 30 days to 15 days. Trick: If you pay GST then the invoice date and final payment date needs to be within 30 days or as per the next GST payment cycle. GST is also has different HAC/SAC codes and amounts for different industries. Communication Design comes under 18% GST chargeable.

* Delivery. Make it absolutely clear that the full and final payment will result in the full and final delivery of the project. This helps in safeguarding your last receivable milestone payment.

* Project Termination. Its been a while since cheques have bounced (touch wood) but it makes good sense to mention that any bouncing cheques at any stage of the project lifecycle will result in immediate project termination.

* Jurisdiction. The invoice is always subject to the city jurisdiction of the registered office of the entity / residence of the freelancer. Good practice to mention this.

* E.&O.E. Errors and omissions excepted (E&OE) is a phrase used in an attempt to reduce legal liability for potentially incorrect or incomplete information supplied in a contractually related document such as an invoice, quotation or specification.

* Signing Amount. The signing amount does not mean that the work has started. The amount is given just to allocate resources for the given project and make time for the existing workload to meet the client project needs. It’s a token of things to follow. The thing to note is that the commencement of the project shall only be from the date of receipt of the full advance amount as stated in the invoice.
* Changes. The amount of changes that are agreed mutually. An industry standard is two rounds of changes at the Pre production stage and one round of minor changes each at the Production stage or post production stage. Totally counted as three rounds of changes. Any changes beyond these should be chargeable extra as per the industry rates. These of Couse vary according to project and scope of work involved but should be clearly mentioned.

* Extensions. Any additions or extensions to the output beyond the ones agreed upon initially by the client should be chargeable extra as per industry rates or actuals. This could include but not limited to animation/ shoot/ edit and so on depending on the nature of the extension. These additions in deliveries or change in brief cost more and also affect timelines. This should also be clearly communicated across.

* Third Party Output. When working with multiple agencies and / or vendors specifically not hired by you, it becomes necessary to mention that any errors or damages during production will be bourne by the client and you shall NOT be held accountable for any third party output. Parallel always get your team and vendors to sign non-disclosure agreements (NDA) and Memorandums of understanding (MoU) on a project to project basis so that everybody is legally safeguarded.

* Samples. This is a tricky one. Samples / pitch documents, these are ground which we have not ventured into too far. We have always had a no pitching philosophy. For those of you all who do love the risk, you should always charge a sampling/ pitch doc cost and this should be made clear upfront so the client / agency expectations are in place or absorbed into the overall project value, which is a gamble, provided you win. While within the project, purchase of samples/ proofs/ tests/ images/ stock/ vectors/ photoshoots/prototypes should be Bourne by the client as per the requirement unless mentioned otherwise in the project particulars.

* Delays. The soul drain. There should always be clauses with regards to delays in feedback/ information sharing/ decisions/ acts of god resulting in delays in the timelines. Similarly delays in providing payment as per the payment schedule resulting in the delay in deliveries. A deliverable is considered complete on approval or lack of feedback for 15 days from previous communication sent to the client.

* Termination. For whatever reason the project is terminated, the payment milestone up to that billing schedule must be upheld and the open files of all the work as agreed upon shall be handed over to the client upto that milestone.

* Author. You or your collective should be deemed as the author for all the concepts/drawings/documents and miscellaneous outcomes of the project both tangible and intangible as per the mutual understanding with the client and the project requirement.

* One time Cost. The costings mentioned is strictly a one time cost developed for this project and should not be considered as a basis of cost calculation for future projects.

* Acceptance. Any payment made is the an acceptance of all the terms and conditions mentioned in this document.

The above terms and conditions should help you frame your own set, ideally with the help of your lawyer and accountant best friends! 🙂 I hope this helps. Remember overall, business is based on trust. Try and stick to your guns. As with any negotiation, there is a common ground to be found. These terms get complex when there are multiple agencies and large client feedback chains involved. Please remember, the client needs you as much as you need them. To ensure a good product, it is necessary to work as per your parameters, making sure your raft/boat/ship stays afloat and has enough margin for growth while keeping the process professional and delivering as per the mutually agreed conditions. There are always exceptions. Only after knowing clients for over a decade have we agreed to working with some without advances or formal contractual paperwork. These good people have transitioned from happy clients to friends and custodians of our collective mutual trust.