In Part I about Avoiding Mistakes in Personal Service Contracts, we discussed contract elements, material vs. minor contract breaches, and the doctrine of substantial performance. In this second part, we’ll focus on common pain points—mistakes or omissions that are expensive if not handled correctly. Not fully addressing the following in your personal service contracts will come back to haunt you if you’re not careful. We also include tips and preventive measures that will help you avoid these mistakes in the future.
Pain Point # 1: No Cancellation Policy
Failing to include a well-defined cancellation policy is a common pitfall of personal service or performance contracts. If you don't articulate exactly how you'll handle various cancellation scenarios, you will find yourself chasing down money you’re owed or, even worse, not getting paid at all.
A proper cancellation policy should address:
Notice requirements
Cancellation fees
Deposit terms and refundability
Rescheduling fees
Any exercisable options for either party
Your time is valuable; make sure you contract for unexpected cancellations accordingly.
Here are few tips for drafting your cancellation policy:
✔ Make the full contracted amount non-refundable after a set date
before the event (e.g., 7–10 days)
✔ Require written notice for cancellations—oral agreements can lead to
miscommunication and lost details.
Pain Point #2: Failing to Proofread & Resolve Ambiguities
In an effort to get their contracts and deposits squared away quickly, many people fail to properly proof for specific details or unresolved ambiguities in their contracts. These could include omissions or confusion about equipment requirements, sound reinforcement, additional performers, meals, stipends, riders, and a host of other potential issues.
If you show up to a performance or to perform a service and something important is missing, you will need to scramble to resolve the issue. Misunderstandings like this can cause serious problems and lead to lost income and professional relationships. You may compromise future bookings as well.
To avoid issues, list every detail, essential or otherwise, explicitly into your contract. If your concern is making your contract binding (i.e. confirming the date, signature, and deposit receipt), make it clear to the other party that you’ll revisit unconfirmed details within a reasonable time (usually 1-2 weeks) and that your intent is to create a valid contract notwithstanding non-essential omissions. You can also include a provision that any unexpected cost reasonable to the execution of the contract will be borne by the buyer. This will help ensure that you revisit the outstanding details within the allotted window.
The key here is to make sure that you leave the door open through the contracting process for any changes or additions as they become necessary and then making sure to finalize any outstanding details within a reasonable time.
Here are some helpful tips for contracting uncertain details:
✔ Set a clear deadline for resolving outstanding details.
✔ Include a severability clause to ensure that changes to one part of the contract
don’t invalidate the entire agreement.
Pain Point # 3 : Handling Unexpected Scheduling Changes
When clients or venues try change dates on short notice, it creates real disruptions to your calendar. Make sure the acceptable window for schedule changes is listed properly in your contract and feel free to include condition for re-scheduling. This is especially important if you’re booking many months in advance where you might still have scheduling flexibility or the event is subject to change due to weather or other circumstances.
You can protect yourself by explicitly detailing the terms and conditions for scheduling changes which is a fairly common omission.
Here are some tips for handling unexpected scheduling changes:
✔ State upfront whether you will allow rescheduling and if any fees apply.
✔ Clarify whether a buyer-induced change forfeits all or part of their deposit for the
original date.
Pain Point # 4: Not Including Conditions for Breach
This is an extension of what we mentioned in Part 1. When you don’t explicitly contract what determines breach, you are asking for a heated exchange about whether you’re owed your performance fee or not. You should also include conditions for material breach versus minor breaches that you’re more willing to work through. In general, it's helpful to contract in a reasonable time for either party to cure breaches when possible -- it is usually healthier for the relationship. If you choose to be inflexible, the clearer your contract is, the better. You can save a lot of time and therefore money when the mechanisms are articulated clearly prior to the breach.
Here are a few pointers for drafting effective breach clauses:
✔ Define essential vs. non-essential conditions for breach
✔ Include cure periods (e.g., a set number of days or weeks) to allow issues to be
resolved before terminating the contract.
Pain Point # 5: Include A Liquidated Damages Clause
A liquidated damages clause predetermines the amount of penalty owed in the event of a breach. This avoids the lengthy back and forth of negotiating or appraising appropriate penalties and puts the future breaching party on notice early in the contracting process. These clauses can be powerful deterrents against breaches, but must be "reasonable amount for the circumstances" to be held up in court. Knowing in advance that there is a financial penalty for non-performance often incentivizes the other party to uphold their side of the bargain.
In the courtroom a liquidated damages clause shows the intent of the parties in case of breach as well as the potential consequences and risks of breaching the contract. It also serves to save time and money in resolving disputes.
A couple notes about liquidated damages clauses:
✔ Ensure the penalty is reasonable and proportionate to the contract value—courts
will not enforce excessive penalties
✔ Set the damages as high as legally reasonable to create more disincentive for
breach
✔ Consider including liquidated damages for minor breaches while keeping the rest of the contract enforceable.
Conclusion
By addressing common pain points, you can protect your interests and avoid costly mistakes. Contracting with these pain points in mind can really sure up enforceability of your contracts. It will help expedite outcomes by reducing the amount of post-breach communication necessary as well as the likelihood of litigation.
Review your current contract templates yourself or with an attorney to ensure they adequately cover these pain points. If they don’t, make sure to update your templates accordingly. If you need assistance, we’re here to help—reach out to us at consultation@zalalaw.com to schedule a brief consultation.
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