Recap: Contracts, What You Need to Know

It was a pleasure to have attorney Mary Novrocki speak at Refresh Detroit again, she last spoke to our group about freelance legal issues in spring 2009.

Mary started her talk with background on contracts and why they’re important for you and your client. She explained that including a glossary of the terms used in contracts, near the beginning of the contract, will help clarify the meaning of the terms.

Mary Novrocki discussing contracts

 

Mary explained the components of a contract, which include:

  • Parties – the participants in the contract
  • Recitals – statements explaining who the parties are and what they intend the contract to achieve
  • Subject matter – the services, goods/property that is the subject of the contract
  • Consideration – payment; something of value received by one party to the contract from the other
  • Warranties and representations – guarantees by one or both of the parties regarding something that has or will happen as a result of the contract.
    • You, the freelancer will provide specific services, while the client will pay for those services, according to specific milestones met.
  • Risk allocation – disclaimers, indemnities, etc.
  • Conditions – the what ifs – happenings that, if they occur, will stop the transaction from happening or will undo it
    • Important to both parties
    • Think of past projects where things didn’t go as planned. Perhaps payment was delayed, or content not delivered. Consider what the consequences are, and clearly state what will occur.
  • Performance – what the parties expect from each other regarding work to be performed or goods/property to be delivered
  • Dates and term – essential dates of delivery of goods/property; a term of work.
  • Boilerplate – governing law, notices, survival, waivers, notices, contract construction, etc.
    • This is the area that attorneys know well.
    • What will be the governing law? The county and state you live in? Or the county and state your client lives in? What works best for you?
  • Signatures – by all parties to the contract
    • In Michigan, digital signatures are considered legal.

The elements of a contract were drawn from Feldman, Robert A., Michigan Basic Practice Handbook Chapter 8: Drafting Contracts, The Institute of Continuing Legal Education, © 2011.

Mary ended her talk with a discussion of the Michigan landmark case about mutual mistakes in contracts from none other than nearby Plymouth, Michigan.

Michigan Legal Milestone

Michigan Legal Milestone: Rose of Aberlone

The case involved the sale of a cow in the 1800’s, between T.C. Sherwood of Plymouth, Michigan and Hiram Walker (yes, the Hiram Walker of the Hiram Walker & Sons company in Windsor, Ontario, Canada).

Rose of Aberlone

The Case of Rose of Aberlone

Both parties thought the cow was barren, negotiated a price, and confirmed the price in writing.

However, when Sherwood arrived to take the cow, Walker refused to sell the cow. Walker had discovered the cow was pregnant, which increased her value.

The Michigan Supreme Court ruled Hiram Walker could rescind his agreement to sell the cow, due to a mutual mistake.

Here’s a closer look at the plaque that stands in Kellogg Park in downtown Plymouth, Michigan commemorating the case.