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April 26, 2022

A Scott in the Dark: Episode 66 - Quotes and Contracts

A Scott in the Dark: Episode 66 - Quotes and Contracts

Scott discusses how he has handled quotes and contracts for goods and services within the Haunt industry. NOTE: Scott is not a lawyer nor is he an expert in contract law. This episode is designed to share thoughts on what can or should be in a quote...


Scott discusses how he has handled quotes and contracts for goods and services within the Haunt industry. NOTE: Scott is not a lawyer nor is he an expert in contract law. This episode is designed to share thoughts on what can or should be in a quote or a contract. " Show Notes: https://www.haunt.news/asitd-haunt-quotes-contracts

Transcript

Hello everyone and welcome back to the dark once again. We're diving into the dark. This is Scott Swenson from A Scott in the Dark, and in this particular episode, you know I always try to do episodes about things that I'm doing, that I'm working on in my in my career as a consultant. Unfortunately, as a consultant, quite often, the things that I'm doing I can't talk about specifically until long after they're done, or at least until they've opened. That is the case right now. 

I really wanted to do a show, very much wanted to do a show all about all the different projects that I'm working on, all the different companies that I'm working for. But unfortunately, I can't do that right now, and the reason I can't do that is because of my agreement with these companies. So, after a couple of discussions in different meetings over the last week or so, I decided, you know what? Why don't I do a little bit, a short episode, this is probably not going to be that long, but why don't I do a short episode about agreements and contracts, the importance of them, what should be in them, what I put in mine, and that side of our business. I realize, you know, not everybody uses contracts, quite often in the haunt industry it's done on a handshake or a promise or whatever, but I wanted to talk a little bit about, first of all, why contracts are important? Why they benefit, really, everybody involved.

I work with a lot of friends. Almost everybody I work with in this industry are people that I have known before. I've often said, I don't want to work for somebody just once. I want it to be a good experience, so I want to continue to develop long term relationships, business relationships with them. So, for me, a contract is really, really important, or an agreement of some sort, because it basically takes all of the guesswork out of the business relationship and it makes it so that there is no grey area, there is no, "well, you're my friend, so you'll do it this way. Or I thought you were going to do this." When in reality you thought one thing, I thought something else.

So, I think agreements, written agreements, should not be something you're afraid of, they shouldn't be something that shows distrust. Often people will say, "well, if I can't do it just on a handshake then I don't want to do business." Well, that's fine if that's the way you want to do business. But to me, if you've got it all spelled out in some form of agreement or some form of paperwork, then you don't have to worry about losing a friendship, you don't have to worry about damaging a business relationship based on a misunderstanding because it's all spelled out right there in front of you.

Now let me start this episode, like I do with so many, by saying, "I am not a lawyer." Well, I don't always say I'm not a lawyer, but I will say, "I'm not an expert in this area, however, this is what I've experienced." Well, I'm going to say this right up front. I am not a lawyer, nor am I an expert when it comes to contract law. So, please, if you are going to look into some of these contracts or into some of these agreements, you can either hire a lawyer, there are online, LegalZoom has some contract templates there, you can find them online.

There are contract templates online that you can find and adapt to your needs, or consult a lawyer, because if it's a large enough contract or a large enough agreement, and a large enough portion of your business rides on this contract being completed--like scenic build or audio installation or whatever--then you might want to look into a lawyer, invest in that in that expertise and let them correct what I'm telling you if I'm telling you something that is wrong. What I will share in this episode, however, are things that I have done in the past that have worked for me thus far. That doesn't mean that tomorrow, all that will change. 

So, before we even get into contracts, let's back up the process a little bit. One of the things I like to have with my clients, and I don't have them with all of my clients because it just depends on how secretive or the level of propriety that the information is that I'm dealing with, but I like to have a non-disclosure agreement. Basically, what this says is, it's a written document that is signed, dated, sometimes even notarized, by all parties, which basically says, "we're going to share information that the rest of the world really can't hear yet, and it's information that's going to be important so that we'll both be able to do our jobs." Sometimes it's so that we will both be able to write or understand an agreement, or a contract that we're going to write. Or sometimes it happens after the contract and you just need some top-line information for the contract or the agreement, and then the NDA, the non-disclosure agreement, comes afterwards.

The reason I like to have this is, because I work for so many clients. I want something on paper. I want my clients to understand their information is protected with me, I won't be sharing it with other clients. I don't currently have any situations where I'm working for two people who are in direct competition, in the same mark. But again, right now I'm working for a bunch of different clients, specifically Halloween-related, but also education, edutainment, that sort of area. So, I think a non-disclosure agreement is something that is healthy, and it basically says your secrets are safe with me, so you should feel comfortable sharing them. 

It also holds you responsible for not having loose lips if you happen to be a contractor like myself. It holds you responsible so that you don't accidentally share information because you know that you've got a piece of paper that has been signed that is protecting that information and keeping it safe from other folks. There are many NDA's online that you can download. Again, if you don't feel that you need it, If there's nothing you're dealing with that is particularly proprietary, then you may decide you don't need one. I like to have them, especially when I'm working on new projects, because that way it just makes everybody breathe a little sigh of relief, and it makes people more eager to share information if they know that it's not going to go any further than the meeting, and it's going to only be used for the purpose of completing the work that is being contracted.

The next step, usually for me, is a quote. Now, a quote is sort of like a contract, sort of like an agreement, but it's upfront. The quote itself is, well I try to break it down into multiple sections, so let's break it down into sections. What I'm really going to do is focus as much on the quote as I would on a contract, because sometimes I will do work just on an executed quote, which basically means that I have a signature from the person that I've given the quote that says, “approved move forward. Et cetera, et cetera, et cetera." 

So, that happens with, obviously, smaller projects, but with larger projects, there are almost always contracts and those contracts are sometimes, like with larger theme park chains, for example, you actually go through a vendor vetting process. With smaller companies, it is a simple basic contract. Most companies who need, or want, contracts or agreements have their own and then they just plug in the elements out of the quote into them. 

So, let's focus on the sections of a quote, and these are the sections that I think are important. Once again, I am not a lawyer, I am not an expert, but this is what has worked for me. So, this may give you an opportunity to ask the right questions if and when you decide to use a lawyer for your quotes or your contracts.

So, the first and foremost most important thing, I think, is to very clearly state at the top of your quote that A) this is a quote, this is not an invoice. You're not asking for money, you're saying, "this is what it's going to cost you to do this work for you." If you're on the other side, these are the kinds of things that you can expect to see on a quote. So, make sure that it is clearly labeled quote, not invoice, not purchase order, not whatever, it is a quote. Which really has no real weight until it's signed or executed. 

The other thing it needs to have on there is who the quote is prepared for, and who it is prepared by. I think it's important to have not just a company but also a name whenever possible, an address for both. The quoter, in my case my name, address, business phone, et cetera, and the person I'm preparing the quote for; so, XYZ Spooky zoo, and then and then their address. I also like to have a name, like an attention name, just so that if there is any question on either side there's a person that you can put to it.

Again, these kinds of quotes, you don't send them blindly. You don't just randomly say, "here, let me send you a quote!" No, somebody requests a quote. I think that's very obvious, but in this day and age, you never know who's going to send what to whom in the hopes of getting some work. So, you know, don't send blind quotes, that's just creepy and wrong.

So, the next thing that I think is important in a quote is the scope of work. So, this is what you are planning to do. This really, depending on the size and the complexity of the project, this can be... Well, I think this should be one step more detailed than you think it should be on the surface. So, one step like, if it's, "they're going to do everything for this project." Instead of saying everything for this project, spell out what everything means.

I would even suggest, if it's a really complex project, breaking it into specific areas or lines. One quote I did not too long ago had a line item that said, "create four 1-sheet concepts for a new haunted attraction at," the name of the location. Then I went on to say, "this will be one to two printed pages, it will be delivered in an electronic format," and then I even put in parentheses PDF word pages, "and will also include a flavor board of images to help better understand the concepts being presented."

So, I tried to make it as concise, yet complete, as possible so that when you're done, neither side is going, "well I did too much," or "you didn't do enough." You know, it's clearly spelled out. What I actually did was I then had a column in the quote which has a number in it, the number of concepts, 4, and then I had an individual price for each concept so that they could make the decision if they wanted to add more concepts or less concepts it would affect the price. So, you can't say, "this is a lump sum for three concepts." They say, "well, you got three, just throw in another one, would you?" No, it's not in the scope, that's a change order. 

So, make sure that your quotes are broken down into sort of a menu format, and make sure that they are as detailed and clear as to what those deliverables are as possible. Just to recap, specifically what it is you're delivering, how many of them, how long they need to be, what they actually are, what they're based on, what information you need. I have some quotes that go in saying, "pending receiving this information from the client," which basically says I can't start my work until you send me this information. So, make sure that it's all spelled out as clearly and concisely as possible. Because again, you don't want either side to feel as though, "Well, I've either given too much," or, "you haven't given enough." So, make sure that that is spelled out and that's in the scope of work. So, what is being accomplished? You cannot be too specific. 

Also, in that, include a timeframe, "it will be accomplished by," insert a date. Or "it will be accomplished by four weeks after receiving the design." Make sure that there's some sort of milestone built into that scope, once again, so nobody can say, "well, you said you were going to do all this, and it was due yesterday." Or "Well, you never said when it was due, so I'll just keep working on it until I'm done." Just make sure that stuff that stuff is clarified up front, because no one is going to argue about it, you just want to document it. It's not like that's not really much of the negotiation. It may become the negotiation after the quote when they realize, "wow, if I'm going to do it this fast, it's going to be more expensive than if I've got more time." That's a possibility. But just be as specific as you can in the scope.

The other thing that I think is important is, well, obviously, pay. Compensation. How much is it going to be for this, this, this and that? So, obviously the amount. I always even put in mine payable in USD. If you have a specific way you want to be paid, whether it is electronically, by hard check, or whatever, make sure that's included. Make sure that's included in the quote, and eventually in the contract. 

Different companies, different organizations have different payment terms. For example, there's Net30, which basically means 30 days after the invoice more or less. Net 30, Net 60, Net 10 is not particularly common in larger companies, smaller companies... Honestly what I would put in smaller companies is, "due immediately upon receipt of invoice." Or “Due 10 days following invoice," something realistic like that. Also, a payment schedule. I think it's important, even in the quote, to put in, "25% will be due upon the signing of this agreement, whether it is an executed quote or an actual contract." So, 25% is due upfront, 25% is due to midway, and 50% is due upon completion. If that's the way you want to do it. I actually like to spread out my payments, because again, it's my income. So, I find it important to spread that out, so I'm actually continuing to earn money while I'm working on longer projects. For many construction contracts they need money upfront to buy the materials, so sometimes they will ask for up to 40% upfront.

I think if you're looking at a contract from both sides because again, keep in mind that the reason contractors are of such interest to me is, when I was working at Busch Gardens, I got contracts from the other end and I had to look at them to make sure that they were not biased towards the individual. Now I look at it to make sure it's not biased towards the organization or the company.

A good contract, no one feels like they're being cheated. A good contract, both sides feel as though this is fair compensation. I will say that with some of the larger companies who have the longer terms like the net 60, or there are even some companies out there that are Net 120. You can put in a quote, there will be a 20% discount if the company agrees to a net 15 payment schedule or payment terms. So, you can utilize those net terms as a negotiating tool as well.

You may or may not want to do that, but basically what you're doing is you're saying up front, "here's the big chunk if we're going to follow your rules, and if you can make it so I get paid sooner I'll reduce it by 10% or 15% or 20%." Now, of course, the 10%, 15%, or 20% is what you want to make anyway, so you just kind of back into that number; just being honest, and I think both sides know that. I'm not sharing any proprietary secrets,

I'm not breaking any non-disclosure agreements when I say things like that.

Also, make sure that you include how the payment is going to be requested. You know, I always say, "upon invoice", "upon delivery of receipts proving cost of goods", or" automatically the 1st of every month." I mean, make sure that that is in your quote and then eventually in your contract, in your agreement, so that everybody knows what they're negotiating upfront. In some cases, you will have to wait until the company issues a purchase order. I know that some of the larger theme parks won't process an invoice without a service order, so you got to wait for that to be done, and then you have to wait for the work to be done, and then you have to close it. It's a long, drawn-out process. The more that you can get spelled out in the quote, and then like I said, in the contract, the better. 

Another thing that I think is important for a quote is, ownership of the work. So, like for me, for example, I do creative scripting, conceptualizing, quite often I will do training and casting. Anytime I do a written piece now it is included in my contract that whatever I write is work for hire and owned in perpetuity by the client. So, in other words, they're buying a script from me. This is very, very common in the industry that I work in. This is less common in some other industries where they basically lease it for X amount of time, the commercial industry, for example, quite often they will say it's a five year buyout, which means that they can use it for five years and after that they no longer have rights to it, they have to pay for it again. Work for hire is basically, they're buying it outright, so they don't have to pay the creator anything extra in the future.

If you choose to work that way, that's fine. I know most theme parks want everything in perpetuity because they don't want the extra paperwork, the extra headache, of having to track, "oh my gosh, we have to pay them again five years later." There are, like I said, some industries that that's commonplace. For what I do, that's not particularly common.

I also put in there that if writing credit is given, this is for things that I write, it should be "written by Scott Swenson" so that it's very, very clear. If no writing credit is given, they don't have to quote me, they don't have to credit me, no one will ever know that it's mine, that's completely fine. However, if they place, on any piece of documentation, who the writer was for this piece, it has to be credited to me, according to the scope of the quote and eventually, like I said, the contract.

Another thing that I put in there is, and this is something just recent, is that Scott Swenson and Scott Swenson Creative Development retained the right to utilize sections of this work as samples of previous work once the content is in public view. So, once something opens, for example, I can go back and say, "Here is a sample of the XYZ Wombat Show that I wrote for the Saskatchewan Zoo." That's completely made up. I'm not working for Saskatchewan Zoo, nor am I writing a wombat show, just saying. But I retain the right to utilize sections of that to show other clients what I can do. Even though it is owned by the company, if I use small excerpts, I can use it as samples of my work, and that's the only way I can use it in the future.

So, when all of this goes into your quote, then, of course, they have to look at it and check their budgets, and quite often these quotes will be bids. So, they'll ask for bids from several different providers, and they'll go back and weigh, not just price by the way, they weigh expertise, they weigh turnaround time, they weigh track record. They will look at, "Oh, I know this guy is the cheapest, but also not the best." So, all of those things come into play when they're evaluating quotes. 

Then once a quote is either executed for a smaller client or a smaller project, or a contract is generated, or a service order is generated, or a purchase order if it's goods, then all of the information from the scope goes into that contract.

If you are signing a contract, and I know this sounds ridiculously simple, if you are signing a contract before you sign it, read it. Read it. I know there's going to be parts that you probably won't understand. I know there are all these parts I don't understand, so I have to go back and look them up. Now, I've been doing this long enough that some of the things I didn't understand before I now kind of get, "Oh, OK, here I see where they're going with this, and I understand what this means." Again, if you have questions, check with a lawyer, or do your homework online to find out what this particular legal term means. Again, no one should ever go back after a contract and not know what is expected of them, and what is expected of them on whichever side of the contract they sit on. So, if everything is clearly drawn out then you're good to go.

One of the things that I think is important in a contract as well, and this is more for those if you are contracting someone to do something. I don't usually put this in my contracts, but if I were on the other side, I think I'd request it. So, if any of my clients are listening to this, they may request this in the future. That is, what happens if the scope isn't completed, or isn't completed on time? Again, the idea of a bonus of getting stuff completed on time is certainly something you can play with and work into the contract. I don't know what the laws are as far as penalizing people for not completing scope. Obviously, if you don't complete the scope, you're in breach of contract and that may require legal action. 

So, I guess what I'm saying is contracts do not have to be scary or creepy or weird, you just have to make sure that everybody understands, "I'm saying I'm going to do this and you're saying you're going to pay me that." But you're going to do it in the most detailed possible format.

Once a quote gets transferred into a contract, and what I've seen quite often with larger companies, they have a boilerplate of their contract, and they will literally lift the scope out of the quote and plop it into the boilerplate of their contract. You'll be reading 3/4 of that contract upfront, you'll go, "I don't understand any of this. What? This is nothing that I quoted." Because they're talking about all of the legal protection that they need based on what their lawyers have told them. There's absolutely nothing wrong with that, just make sure you do read it and understand it to the best of your ability. If there's anything you're concerned about, don't sign it until you've actually read through it.

I can't tell you how many times, when I was on the other side of contracts than I am now,

we'd have people go, "well, we didn't really read all that, so I mean, how could how can you hold us to that?" Well, because you signed it. You know, when both sides sign it, they're basically saying, "I understand what this contract is, and I agree with it." 

With that in mind, recognize that contracting takes time, and in many, many cases most larger companies don't want you to start work until you have a purchase order, or until you have an agreement, that way you can't go back and say, "well, we had a handshake. We had a verbal. We had this, we had a that." Yes, I do that all the time. With clients that I've worked with for many years I will go ahead and start projects, I'll start working on projects before I have a signed agreement. But if that doesn't come through, the only person I have to blame is me. OK? 

I have had that happen. I have had that happen in the past where I've started a project, we had a verbal agreement, a contract was in progress, and the project shut down prior to the contract being completed, but I'd done quite a bit of work on it. But it's my fault. I can't go back and grouse. So, that said, in order to not get stuck start your contracting process early, start your bid process early.

I'm not going to go into the whole process of bids, because that's just even more confusing, and I've already thrown out a whole bunch of information here that some of you may be scratching your heads. Others of you, you know if there are lawyers listening, you may disagree and say, "no, that's not the case anymore." If that is the case, you know, if I'm way off, if I'm super far off, please make sure that you email me and say, "Scott, you were wrong on this point." And I will make a correction. You can reach me at S.Swenson@ScottSwenson.com, that's the easiest way to get a hold of me., via email, so you can, again, correct me. Please, because if I'm doing something wrong, I need to know. It would be helpful, and I will also clarify it for other people.

So, I guess, gosh, that's my little rant. I know this wasn't as much fun as some of my others, but hopefully, this is helpful to you, at least things to consider as we get closer and closer, and we start signing contracts. Because like I said, I've been writing quotes and signing agreements left and right, right now. This is being recorded in... When is this? This is the end of April. This is being recorded on April 22nd, 2022. I have one more quote to send out for Halloween and the rest of them are all signed.

So, hopefully, you guys are on top of things as well, and you're getting those quotes looked at, you're requesting quotes if you need them, you're getting contracts signed, and you're getting all the paperwork done far enough in advance so that nobody has to start working before they've signed a contract. 

All right, wow. OK. That's a whole lot of information. Once again, I have to have to give the caveat over and over again, I am not a lawyer and I am not a contract expert, but this has been the experience, and these are at least the questions that you need to ask if you have to sign some sort of an agreement or you're looking to contract someone to do something for you.

So, let's see, what else is going on in my world? Like I said, this is April 22, 2022. Here's the projects I can talk about. I will be in Indianapolis next week for an entire week, and I'll be working on a brand-new dolphin presentation at the Indianapolis Zoo. I can say that because they'll be doing some public rehearsals as part of the dress rehearsal process. This is a show that I have written. I'm working with Scatter Brothers Productions to do the video, and of course, working very closely with the dolphin team at the Indy Zoo. What a great team, just so much fun. So much fun and I adore dolphins, they're fun to work with. They're really fun to work with. 

Then I'm home for a little bit, then I am back out on the road most of May. I will be at Space Center Houston, doing quite a bit of training there. I've rewritten some scripts for them, and we'll be doing some in-person training while I'm there. I'll also be doing some writing for all the other clients that I can't really talk about. So, sorry guys. I'll let you know once they open. I promise I really will.

So, I hope this has been helpful. I hope it's given you something to think about, and I hope that you are getting ready for the upcoming haunt season because you should really be buttoning all that up so that you can get Christmas ready to go, and then New Year.

So yeah, and I've got a summer event that I'm putting the last bit of touches onto for The Vault. Yeah, the world never ends, and we have to just keep back timing everything so it all fits in place.

Thank you, guys, for listening. I hope you've enjoyed this particular episode, and if you are not a member of my monthly newsletter, please go to ScottSwenson.com and click on subscribe to my newsletter. It's on the landing page right underneath my picture. I promise I do not sell that information, you will only hear from me once a month. So, you can do it there. Like I said, if you have any comments, concerns, praise, redirections, whatever, don't be afraid to reach out, I'm not the least bit hard to get ahold of. The easiest, if you don't want to email me, the easiest way to get ahold of me is probably to join the A Scott in the Dark Periodic Podcast for Haunters Facebook group. There's some very active folks on there who share information constantly, or you can email me, which is S.Swenson@ScottSwenson.com

So, until next time, this is Scott Swenson saying, rest in peace.