Yes, You need to have a contract for clients!
Safety Consultant with Sheldon Primus
Yes, You need to have a contract for clients!
April 19, 2023
In this episode, Sheldon gives reasons to have a contract with clients even if they are regular clients. In this day and age, there can be situations that can cause someone to stop services. If you don't have a well-defined contract, then you may be out of expected money from projects. Sheldon is reviewing the proper way to structure a contract for a safety consultant.
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Keywords: Environment, Sustainability, Workplace safety, Hazardous materials, Industrial hygiene, Occupational health, Safety regulations, Hazard prevention, Risk assessment, Chemical safety, Ergonomics, Health and safety, standards, Environmental policy, Workplace health promotion, Environmental health, Air quality, Water quality, Climate change, Green initiatives, Sustainable development, Government news, Public policy, Politics, Government services, Government programs, Public administration, Political analysis, Government leadership, Federal government, State government, Local government, Government accountability, Government transparency, Government efficiency, Government reform, Legislative updates, Government decision-making, Government technology, Government innovation, Public service, Workplace safety, Occupational safety, Safety training, Health and safety compliance, Safety management systems, Risk assessment, Safety audits, Safety culture, Incident investigation, Ergonomics, Hazard identification, Industrial hygiene, Safety inspections, Behavior-based safety, Safety program development, OSHA compliance, Safety policies and procedures, Job hazard analysis, Safety performance metrics, Safety certifications, Sheldon, Primus, Sheldon Primus, Safety FM, Jay Allen, Dr. Todd Conklin, Dr. Sydney Dekker, Safety Differently, HOP, BBS, COSS, COSM, Oil and Gas, Chemical Manufacturing, Medical Compliance, Human Resources, HR, Podcast

[00:00:05] Announcer: This episode is powered by SafetyFM.  
[00:00:13] Sheldon Primus: Welcome to the Safety Consultant podcast, I'm your host, Sheldon Primus. Here is the podcast where I teach you the business of being a safety consultant, teach you about OSHA compliance, we talk about general safety and health, a little bit of everything here, right? Trying to help you out, help you where you are going to be either the consultant for your company that you're working for, or working for yourself, right? Because you wanna make sure that you can help people stay safe. So that's what I do, help you out with that one and then help you with a viable business. That is the key.  
So welcome to the show, for those of you that are listening for the first time, thank you. Thank you, thank you, thank you. Uh, for those of you that have been around for a little while, we've been doing this for a while. So this is like episode 240, 250, somewhere around there. It's been a while. So thank you so much, you guys that have been listening for a while, and I do want to thank you. So let's talk about who's been listening for a while. So let's take a quick look at my, my data. So this is the data of people who download this podcast and it tells me, in order, countries that it's coming from. So I wanna thank you guys US, you are number one in this list. Bahrain, number two. South Africa, number three. Singapore, number four. Italy, number five. France is six. Seven is Canada, number eight is Germany, number nine UK. ten, Netherlands. So that's the top 10 of people who are listening to this. If you're listening from Finland, Australia, Hungary, Taiwan, New Zealand, Spain, Portugal Hong Kong. Poor. Um Poland Austria, Sweden, Switzerland, Malaysia, Denmark, UAE, India, Ireland, Israel, Croatia, Bulgaria, Greece, Indonesia and Japan, thank you as well. You guys rock. So I just want to thank you for listening to the podcast. So let's go ahead and give you guys what you deserve. Yeah. Thank you. You're rocking. You guys are the real MVPs. So, oh my.  
Let's go into, well, let's tell you what's happening. Uh I'm working on, uh, another hydrogen sulfide instruction, instructor development course coming up in uh in June. Uh So, uh please keep an eye on me and you're gonna be able to see my postings on two places, one Linkedin or my Facebook group that I share with, uh, Jay Allen from Safety FM and then Mr. Allen Woffard, and Allen is actually, Diary of a Bald Man. Allen is an old student of mine. Uh So he's helping with that group as well. So you would get to the Facebook Group by going to facebook dot com, forward-slash groups, forward-slash safety consultant. And that's groups with an S. G-R-O-U-P-S. So again, facebook dot com, forward-slash groups, forward-slash safety consultant. And, um, they're gonna ask you, there's three automated questions just to make sure that they're not bots signing up, and with those three automated questions, uh you're gonna have to answer those and then, uh make sure you answer the most important question, which is “do you agree to abide by the rules of the group?” And once you say yes to that you are in. And you're gonna get all kinds of information uh for me. But if you do miss any questions or you say no to anything, you're out, alright? All right. So don't be out, be in, that's where you wanna be, wanna be in, not out. So go ahead and answer those questions and then you'll be part of the safety consulting group on Facebook. Uh Currently, I think we got roughly around uh 2500 maybe. So I'm gonna do a quick search, you're gonna hear some typing in a back. Uh So I believe it's roughly around 2500 or more people and it's all international. So you're gonna see people from all over the country in this group, uh which is wonderful. So, uh thank you everyone for being members and who are members of the safety consultant uh groups, not the podcast group, it’s just the group itself. Uh So this group is actually 3307 members. Wow, more members than I thought. So, 3307 members in this Facebook group and it's international and it's Facebook dot com, forward-slash groups with an S, forward-slash safety consultant.  
And then another way to get a hold of me and see my posting, especially if I uh I miss a week or if uh if I don't, I'll release my episode on Wednesday, because I am an active safety consultant, so sometimes I got projects. Uh, so you can get keep touch by first subscribing to the show. So when a new episode drops, I love that, new episode just drops, I might have to go look up that sound, you know, like uh uh ad rock when you go, “let the beat drop” That's uh Beastie Boys. All right, sorry. That's me. My bad. So I'm gonna end up having to, uh uh, I'm gonna skip that joke altogether. Let's skip back to telling you what I want to do. So, the other thing I want to tell you is you could reach me by Linkedin, which is linkedin dot com forward-slash in, forward slash Sheldon Primus, my name. So once you get there, you'll see me, I'm gonna post uh usually there and keep you guys informed either in my group with safety consultants or on Linkedin, letting you guys know about, uh scheduling and things there, uh special events as well. So I did tell you about the H2SIDC class that's coming up. I'm gonna be working with a global, uh company, and we're gonna be doing some free seminars regarding international training. So you're gonna get word about that when it comes in. And uh if you want to reach out to me the best way to do it, it'll be safetyconsultantpodcast dot com. Safetyconsultantpodcast dot com. And there's a microphone icon on there, just press the microphone icon and then you could talk to the show. And when you talk to the show, you're talking to me, I'm gonna get that, that uh recording and then I'll be able to hear what you're, you're telling me. So at that point, I have audio messages and I'll go by and I'll read all my, listen actually, to all my audio messages there. So that is safetyconsultantpodcast dot com. You're gonna look for the microphone icon, hit the microphone icon, and go ahead and record your voicemail for me. So that's an easy way to get a hold of me, alright? So I gave you guys some information. Um If you have not subscribed to the podcast, please do, whatever you're listening to me right now, hit your subscribe button. So again, when I do release any episode, you're going to get uh a notification. I generally release once a week unless there's something happening in life and with work and work again, a safety consultant because I'm an active consultant and trainer. Um And then you're gonna know, hey Sheldon didn’t release this week, he's gonna release next week. Yeah. So, therefore you'll be tipped up and if you do like this, share it. Let's see if your country can move up in the ranks, maybe your country could hit the top 10. If you're outside of the top 10, get you and your friends and other people that are interested in safety and health uh to support the show. That'd be a great way. Let me know that you support me and share it with a friend. Give a review. I love those, those work as well. So thank you so much.  
All right. So let's get into the episode for today. Uh, This episode for today. I'm gonna talk about contracts. I had something really happen recently on a contract and, um, I'm glad I put this client on a contract because I'm a little iffy about them. And, uh I just knew I had a feeling, you know, you get that feeling where you're thinking, “Man, mmm. They may not abide to the agreement and a good handshake may not be good enough with this client” and I had that feeling last year. So I made a safety consultant agreement and I'm gonna kind of explain what this agreement would look like so you guys could do your own. But before I explain what the agreements look like, and I'm not gonna give you details, because I can't do that, it's a contract, but I'm gonna just tell you the, the template, if you would, to follow. So the reason why you want to do this is, there are some people that you work with that you can rely on and that, you know, for sure that they're going to take care of you. You've been working together and you maybe build a rapport, you may not use a contract with that individual. I had a situation like this recently where I had a company that I was working with often and I was like a subcontractor them. So they had work and then I would actually do work, uh, in their name, so a subcontractor. Um that's a great way if you're currently working for someone and you want to be able to do safety consulting, just a little bit and dip your toe in, the best way to do that would be uh well, not the best, a way to do that would be for you to go ahead and uh make yourself available to be a subcontractor to someone else. You could do their training, you could do a mock OSHA audit, but you're not doing it under your business, you're doing it under someone else's, and that could help fund you so you can get your business. What will work even better is if you have your business, and just make sure you get the name because you want to age your business as long as you can. So, uh, this year is the best year to start your business, even if you don't do anything with it full time for 3 or 4 more years, today is the best day to start your business. Because when you do get full time, your business would already have a born-on date of, you know, this month, yesterday, today, whatever it is. So you want to do that as best as you can. But let's say you can't actually actively work, then you can work as a subcontractor for someone. So that's what I was doing in this company. I've worked with for years and years and years, but they had a new client and they hired me to do some training and then the new client flaked out on them. And that's a term in America that we use, just meaning truly that, uh the person just dropped the ball, they forgot. That's another term, right, I dropped the ball, forgot. Oh man, I got all kinds of balls. So we got uh just all those things that we're thinking of. Oh man, Sheldon, you're gonna have to clean that up.  
All right. So what the idea or what happened, I should say, not idea what happened was, uh that person honestly forgot about the training and I had already spent money on a place to stay and I was ready to do the training, and they canceled when I was literally a day or two away from doing the training. So that's, um. I had to mute you guys because I'm not in a sound stage, so you're gonna have, uh background noise for me from time to time. So if you hears that, that's actually somebody in, in, in near vicinity that's really loud and I had to hit my mute button. So um back to the story. So what happened was in this case, that client flaked and that client forgot all about it and they want to push off the date to a later date and everything else where I have incurred money and expenses. So in this case, I did not have a contract with this person I was working with often. So in this case, what normally would happen would be that um I would have lost money on this, especially the money that I spent for housing and everything else, and then also I would lose the revenue for the class that day. So in order for me not to do that, the best thing and the best practice would have been to put the client that I had on contract, and then they would put that extra other client on contract. So, most of the time, when you're gonna do a contract, especially for training, uh you're probably gonna put in some wording in there that has a cancellation policy. So cancellation policies may differ, you may say if someone cancels within seven days that they're gonna owe you a certain amount, or if they cancel within, you know, a few days that they're gonna have some sort of amount. I do that with, um, with webinars. I, I work with companies sometimes I do webinars and in my contract, I say “if this thing does not go through, you don't tell me and you don't cancel, you're still gonna owe me some money.” And that's honestly because I have to spend time, energy and effort and even block off a part of my schedule for you to be, you know, for me to service that contract. So that's one of the things that I would say is, um, you definitely wanna think of that consideration as a reasoning to do a contract, even though you may have someone who you worked with before and you guys are in good working condition, whenever they introduce a new person, a new company, now, that means there's new variances, new risk. You don't know anything about this company, you don't know if they're gonna pay or not, right? So that now becomes where you then would have to put the contract into place. So that if something happens, whatever money that you incur are expenses, you're gonna get reimbursed for that. So that's one of the considerations.  
Now, here's another one. For big projects, you wanna put uh your client on a contract for big projects as well. So, uh what I'm gonna do is, I'm gonna give you guys more of a template of what this contract should look like. I'm not giving you the wording because that wording is gonna have to have legal ease in the country that you live in and you're gonna have to make sure it's legal to that country. So here is the, the template, if you would. So first you want to head this thing as a consulting agreement, and you wanna make sure that you're gonna identify the parties that are gonna be part of this agreement. You're gonna be one of the parties and you're gonna be identified as the consultant, and then whoever the person you're doing service for, you're gonna identify them as the client. So, and then at the, that means once you identify them in the first little section of your contract as consultant and client and you give everyone roles, then the rest of the contract, all you have to do is say consultant, client, consultant, client, instead of writing the name out of the company each time because you already have a reference point. So the first section is gonna end up being, you know, uh your definitions. Any definition that you have that is coming up in this contract, you want everyone to know what property means, what audit means, what consulting services mean, what worksite means, what uh OSHA inspection means. PPE, personal protective equipment, if you want to put that in your uh in your contract, where if you show up and they have a unique hazard, that they're gonna provide PPE for you, if you don't wanna have to pay for your own PPE and have it only for one contract, you could put that in. Uh You could then put that in that they provide the PPE for you. Uh, You could put in, they provide lunch and then you wanna uh tell them what lunch is. If they provide accommodations, you wanna tell them what kind of accommodations, you know, uh a three-star hotel minimum. If you wanna uh have some, let's say you wanna do business class in flights, put that in your contract, make sure that when you say business class, you tell them what that definition is.  
So the next thing that you're gonna put in there, is you wanna make sure that the next part of the agreement is going to give some more uh definitions about terms. Sometimes you might use terms and it's masculine and it's feminine. If it's pluralized, you wanna kinda, uh, tell them this contract is gonna have some reoccurring words, and these are some of the things that are, this is what these words are gonna mean.  
Next thing is gonna be a description of scope of work and tell them, you know, in this section exactly what's going on. Uh what is gonna be the scope of work and then, uh, spell it out for him. It may take three, four, or five paragraphs, whatever, put it in there.  
The next section is gonna be the authority, uh the authority to execute the agreement. Authority for actually, um, having the ability to walk through the uh facility and do the work that you need. Uh That's the stuff you're gonna put into that section. Um, it's gonna be several pages. My, my base contract is gonna be seven pages. I have me and the client both sign each page independently just to prove that each page was read. So that's in the side. Just wanna make sure you guys get that one.  
So contract price is the next one. So now you're gonna tell them how much everything's gonna cost. If there is a breakdown that you need to really specify, chances are you're gonna add some sort of exhibit. An exhibit A, exhibit B, C-chart and exhibit B, and then you can explain well, for X-amount of students, then we're gonna have x-amount of uh price, if it goes above this student rate, then your rate is gonna be this. That's a way of doing it where you could, uh show, uh any kind of contingency, here is gonna be the cost to you. So that's gonna be your contract price, put that all in there, and if you need to add, um specific notes or exclusions, you could put that in there as well.  
The next thing I usually put in my sections will be some sort of reimbursement wording. So, meaning if I'm spending money upfront, you're gonna reimburse me for things like gas. You're gonna reimburse me for food. You're gonna reimburse me for lodging, if I have to pay for it upfront. If I need to send faxes in the old fax system and it cost me a quarter a fax. You're gonna pay that, that's the stuff you want to put in there. So tell them what kind of fees are reimbursable. Uh, so that there's no, um, surprise when that client gets your bill and they see that there's travel and per diem. It's in the contract. Right? You should know about that. So think about everything. Think about when you get to the airport, you're gonna have to think about bag, bag, uh, baggage fees. You're gonna have to think about your Airbnb or your hotel. You're gonna have to think about, uh, like how do you get from point A to point B, are you bring in your car? Then it's gas. If you're gonna be using a rental, then you're gonna have to put the rental rates. If you're gonna do, uh, um uh ride sharing, put that in there. All right. And in some cases, um you might want to just put in a flat per diem rate, per day, per consultant, especially if there's more than one of you. So that per diem rate is usually gonna be covering your breakfast, your lunch, your dinner and then any incidentals. Usually. You can add more things, but put, spell it out in that section.  
Then after that, if you need any special equipment, in any way, you may not have to purchase all the equipment that you need to do this job. You could put it in the contract, especially if the employer has deep pockets and they could provide equipment or they already have it. And at that point, you're gonna put it in the contract that uh you're gonna have access to that equipment, and now you could save yourself the, the time, energy, effort, and expense of purchasing equipment you may only use for one or two jobs max, you know. So throw that in there, what kind of equipment you're gonna end up using. 
In some cases, you could also put in your contract your insurance, and let them know that either you're going to cover insurance yourself, or during the time of your inspection, that you're going to end up being, uh the responsibility of the client. So at that point, your insurance, um your insurance burden is now moved over to that, uh, to that client. So in some cases, you could do that. Some cases, your client, especially if it's government work, your client will require you to have, uh error and emission insurance and personal liability insurance. Those are the two things that are mostly required and uh auto. If you're driving on to the facility, chances are you may actually need auto insurance too. So sometimes you could put that in the contract that says, as far as consultant insurance, uh we're not going to uh uh say that um I'm not, we're not required to have insurance and just have them sign off on that.  
[00:22:13] The next big thing would be termination. So it's traditional to have some sort of wording in a contract about when to terminate a contract, and this is what got me messed up this week. Oh no, I'm not gonna tell you guys everything, obviously because I can't. But uh when you don't have a termination agreement, man could be scary. That's scary. So, generally what you're gonna be looking for is wording that says, what are the conditions of cancellation? Who can do this on both parties side? And then how many days does it take to be in effect? What's due at cancellation? So let's say you cancel a contract and it's written, you write down that you have to do a written notice in 30 days, but any outstanding balance is gonna be due. So now at that point, uh you now know that that client needs to give you 30 days, and then at that point, you now know that you're gonna be losing a client in 30 days and you get time to, you know, work it out. If you want to, which I suggest, is in that same section, you want to give yourself some more leeway. If it's a bad client, it's a bad client. You wanna make sure you could uh distance yourself from them quickly. So put in there that you don't need the 30 days, uh, so that you have more flexibility, because sometimes you honestly do need to separate yourself from some people. So put that in there as well, give yourself some more flexibility.  
Uh throw in your contract, any wording about Act of God. So just in case there's a, a flood, a fire or a hurricane, something similar like that and now it takes for you, uh, something that is completely out of your control is taking you away from what you could do with, uh your client. Then at that point, uh you are not going to be held liable for something that happened that would be considered an act of God. So throw that in there. Uh You could throw in things like an integration clause which is gonna end up saying that uh, uh you're going to end up when you're, on their, um premises, that you're gonna be kind of integrated into any of their, uh their warranties or anything like that. So no one can make a claim against you for like a voided warranty because of something you've done or workmanship or issue. Uh you’re gonna wanna have some warning in there just to make sure that there is limited liability for that.  
Uh If there's any additional disclaimers that you need to do, uh such as, this work includes this and this is the scope, but it does not include this, this is extra money. Uh So therefore, you're gonna put that in there and let them know that this is what this contract covers, and this is what the contract does not. After that, you might end up throwing in a couple of miscellaneous. Generally, when you see miscellaneous, you're gonna see some legal ease that is going to, uh incorporate uh your local government laws. It's also gonna incorporate like national laws, if you need to, uh you could throw all that then in there. And then in the very end, I usually uh give a nice brief summary of all the scope. And you could leave yourself some space for extra and additional allowances. And after that will be your exhibits. Exhibit A could be payment schedule, exhibit B could be, uh some schedule as to when the scope is done and, and what to expect in considerable months or whatever. So that's the way that you would, you would kind of like work it out.  
Many of you may have access to templates or you may have a lawyer that can help you out. That's great. That's the way to do it. Uh If not, then just kind of use the, the system that I'm telling you to, to help you. Another consideration though, and this is a consideration that I've done before is, I have actually um used my proposal, I used my proposal as a contract. So I gave him a full proposal and then on the very bottom, I put a place to sign, sign and date and two parties are signing and dating. So you sign and date it and then they sign and date it, and then now your proposal can be used as a contract. So you do your normal proposal and then at the very end, you do a signature page. So that's possible. It really depends on how detailed you need to be. Man, some good noise coming in there.  
All right. That is our topic for today, contracts. It's gonna help you out as best as you can make sure that you keep up on it and hold people responsible. In some cases, you might end up having to do a civil action, but hm, let's not go there. If you do, look up your laws and see what you can do. But um, it behooves you to do a contract, it's worth it. It really is worth it, right? So thank you gang for listening in being part of the show. And honestly, I think you guys could do this. You got this, everybody. Go get ‘em. 
[00:28:25] Announcer: This episode has been powered by Safety FM. The views and opinions expressed on this podcast or broadcast are those of the host and its guest and do not necessarily reflect the official policy or position of the company. Examples of analysis discussed within the past hour are only examples. They should not be utilized in the real world as the only solution available as they are based on very limited and dated open-source information. Assumptions made within this analysis are not reflective of the position of the company. No part of this podcast or broadcast may be reproduced, stored within a retrieval system, or transmitted in any form or by any means mechanical, electronic recording or otherwise without prior written permission of the creator of the podcast or broadcast, Sheldon Primus.