Today's Legal Monday is brief (for a change!), but very important for anyone doing SEO consulting.
When selling their products, consultants tend to overstate their abilities and over promise on deliverables. It is important to resist this temptation and communicate as effectively and honestly with clients as possible.
A certain amount of over-selling is expected, and there is even a legal word for it: "puffery." A little light puffery ("We're the best SEO firm in the State of Washington" or "We deliver better results for less money than the competition") will generally not be interpreted as legally binding. However, every consultant is going to run into a client with unrealistic expectations who refuses to pay you for the work you've done. A consultant doesn't have to lie or provide bad service in order to be in this situation. It will happen to you and it doesn't necessarily mean you're a bad SEO.
Even if you verbally tell a client that there are limits to your SEO magic, clients will sometimes disregard your warning and only hear that you are going to increase their business tenfold.
Including solid warranty disclaimer language in your client contracts serves two important purposes. First, it helps manage client expectations. Clients forget and/or misinterpret verbal conversations. If it is written down, your client is more likely to remember that you didn't promise the moon and the stars. Thus, your client will be less upset on the day their rankings drop by five results for no apparent reason.
Second, including a solid warranty disclaimer limits your liability in the event that you can't get your client to the top of the rankings and/or can't sustain high rankings for your client. SEOs understand that there are many factors beyond your control that affect rankings. Clients don't understand. Eventually, you're going to have an angry client who will either (1) refuse to pay you because they are unhappy with the results, or (2) will sue you because they paid you and they are unhappy with the results. Having language in the contract that specifically states you cannot promise particular rankings will greatly reduce your chances of (1) and (2).
When selling their products, consultants tend to overstate their abilities and over promise on deliverables. It is important to resist this temptation and communicate as effectively and honestly with clients as possible.
A certain amount of over-selling is expected, and there is even a legal word for it: "puffery." A little light puffery ("We're the best SEO firm in the State of Washington" or "We deliver better results for less money than the competition") will generally not be interpreted as legally binding. However, every consultant is going to run into a client with unrealistic expectations who refuses to pay you for the work you've done. A consultant doesn't have to lie or provide bad service in order to be in this situation. It will happen to you and it doesn't necessarily mean you're a bad SEO.
Even if you verbally tell a client that there are limits to your SEO magic, clients will sometimes disregard your warning and only hear that you are going to increase their business tenfold.
Including solid warranty disclaimer language in your client contracts serves two important purposes. First, it helps manage client expectations. Clients forget and/or misinterpret verbal conversations. If it is written down, your client is more likely to remember that you didn't promise the moon and the stars. Thus, your client will be less upset on the day their rankings drop by five results for no apparent reason.
Second, including a solid warranty disclaimer limits your liability in the event that you can't get your client to the top of the rankings and/or can't sustain high rankings for your client. SEOs understand that there are many factors beyond your control that affect rankings. Clients don't understand. Eventually, you're going to have an angry client who will either (1) refuse to pay you because they are unhappy with the results, or (2) will sue you because they paid you and they are unhappy with the results. Having language in the contract that specifically states you cannot promise particular rankings will greatly reduce your chances of (1) and (2).
There are a few important things about disclaimers of warranties.
Here is SEOmoz's standard consulting disclaimer of warranties:- They must be some place obvious so that the client can see it easily. Do not bury your disclaimers. If you do, a court won't enforce them and you don't get the benefit of having proactively managed your clients' expectations. Disclaimers work better when actually read. Make the print large, in bold, and preferably someplace obvious on the page.
- If you have client contracts, include them in the body of the contract. Even if you only use a "proposal" or "estimate" for your consulting work, include the warranty on the proposal.
- Warranty laws can vary state by state. Some states require you to specifically and explicitly disclaim warranties for "fitness for a particular purpose" and "merchantability."
- Some states don't let you completely disclaim warranties. Thus, you should never use your warranties as an excuse to do bad work. It's bad business and it will land you in legal trouble.
- Be sure to communicate that you can't promise specific rankings.
SEOMOZ MAKES NO WARRANTY, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF RELIABILITY, USEFULNESS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR THOSE ARISING FROM THE COURSE OF PERFORMANCE, DEALING, USAGE OR TRADE. By signing this agreement, you acknowledge that SEOmoz neither owns nor governs the actions of any search engine. You also acknowledge that due to fluctuations in the relative competitiveness of some search terms, recurring changes in the search engine algorithms and other competitive factors, it is impossible to guarantee number one rankings or consistent top ten rankings, or any other specific rankings for any particular search term.You'll notice that we included some explanatory language so that our clients understood why we can't promise particular rankings. Including some explanatory language makes the disclaimer language more palatable to clients because they understand that there are things outside of your control that affect rankings and therefore you can't be responsible for fluctuations in rankings.
Including a disclaimer of warranty is a relatively simple and easy thing you can do to (1) better manage client expectations, and (2) reduce your risk of suit.
Note: I want to be clear that I am not advocating over-selling your services and then relying on a disclaimer of warranties to either avoid liability or bully clients. Doing so is dishonest and bad business. I am advocating the use of warranties because every talented and honest SEO consultant is going to run into an over-demanding, unsatisfied client. Sometimes that demanding client over-relied on harmless puffery. Sometimes you run into clients that accuse you of providing sub-par service to try and get out of paying you for your services. Sometimes clients just don't listen to your verbal warnings about the limits of your services, even if you don't use any puffery at all. In each case, a solid warranty dislclaimer will help you both prevent problems down the road and resolve problems when they arise.
Please let me know if you have any questions or concerns about warranty disclaimers and how they operate.
Best Regards,
Sarah
i've wanted to put clauses in our SEO contracts to indemnify us in case the IT staff of the client refuses to cooperate...
but they won't let me.. lol.
SRSLY. I think that the ultimate downfall of any SEO contracting work is the lack of implementation, most notoriously on the side of IT :)
I love IT ppl, really (is mine reading this?)
I actually use that as part of my response to clients who ask for guarantees. Someone inevitably thinks they're being helpful by making changes in their own way, or changing the flow of the project. i.e. "I don't see a problem with having two URLs for the same page, can't you just start adding links?"
Even something so simple as "..be held harmless and blameless for techical issues and anomalies beyond our control.." or words to that effect?
Things like that and "acts of God" seem pretty standard to me.
Doug
This is a great post, and a critical part of operating an SEO business. In our early days, we had plenty of clients who thought we could deliver the moon (though actually, in SEO, I found it was much easier to deliver than when we did web design & development). Luckily, we never got into any legal battles, but I think this advice is priceless.
You're going to save a few business owners $100K+ with this post, Sarah :-) Now if only we could all write such valuable blog material...
Great VALUABLE post! "Puffery" - had no idea that was a legal term! Thanks for sharing your disclaimer as well.
Also, this is a good reminder that SEO consultants are responsible for their actions and should get Errors & Omissions Insurance (E&O), and/or Professional Liability Insurance.
Great tip PB! I should probably do a post on insurance issues.... terrific idea!
add to that one the fact thjat some insurance companies have put riders on policies that exclude a company from blogging, a client had insurance cancelled because they posted a blog without checking with insurance company.
"Puffery" is such a great term!
This is very good information and food for thought, Sarah.
There are so many variables that could impact the performance
of our clients site and CYA as you did in your warranty certaintly is a step in the right direction.
I am curious is there good precedent in SEO case law as to liability to a SEO/SEM firm? It is a delicate balance of developing a user friendly contract with the appropriate legal protection of our comapny.
Any thoughts on the right balance?
Bruce
I have thoughts, but they probably aren't comforting! ;)
Unfortunately, the protections you're able to include in your contract will vary greatly according to your bargaining power. If you have more clients than you can take and you don't need the contract, then you can have a more consultant-friendly (i.e., more warranty disclaimers, more indemnifications etc etc) contract. If you need the work and can't afford to let the client go, then you're going to have to accept more of the risk.
It also varies greatly according to clients. Some big clients refuse will refuse to indemnify you and will want very narrowly tailored disclaimers. Small mom-and-pop shops will probably read the contract without signing.
There are a lot of variables in negotiating a contract and the right balance. In the end, the party with the stronger bargaining power will probably end up shifting most of the risk of loss onto the party with the weaker bargaining power.
I do have some pieces of advice: Always be honest and try to write in plain language where possible. Only use legalese where necessary. Don't bury important terms. They might not be enforceable if you do.
Great question GMC!
Sarah - the entire issue of setting expectations is so important.
We often forget how much people outside the industry don't understand. Even repetition doesn't help, which is why it's so important to put the issue in writing.
Great words --
George
Would "World's Greatest SEO" fall under the classification "puffery"? Just curious...
This is invaluable advice, especially considering that it seems the court system has yet to gain even a moderate understanding of search engine marketing.
Agencies and individual consultants alike frequently make the mistake of overpromising. I've worked a few agencies myself, and I'm sorry to say that at all of them thus far the attitude has been, "let's just sell it, we'll figure out how to get it done later." It is now my opinion that an SEO agency should never have a sales department motivated by commission. In the long term, that spells disaster.
A friend of mine was watching one of those daytime TV court shows and saw a SEM consultant being sued by a client because he "promised her she'd get to the top of Google."
The plaintiff was awarded $2,000.
I've been including language like this in my proposals/contracts for a while now. Anybody who isn't would be wise to heed Sarah's advice.
SEM consultant on daytime TV court shows being sued by a client because he "promised her she'd get to the top of Google."
Is this true? If so somebody has to post the video. I guarantee 500+ quality links to the SEO who scoops this story.
Sounds like a Maury Povich epsisode...."You didn't get my website to the top of Google and YOU ARE the father"
Great post Sarah,
We've been looking for something like this for a while now.
Once again another walk off home run.
Thanks
Thanks Sarah,
This entry is really worthfull. I gonna check if my disclaimers are visible enough.
Great Post Sarah! Very informative and something I'm definately going to look incorporate into any agreement I enter in the future. Does anyone know of anywhere where I could find more information on drawing up contracts especially for SEO and SEM work?
Excellent post. I love the part that you actually include a sample of disclaimer which is particularly useful for our fellow consultants.
Since SEO is marketing related it can commonly yield higher margins than other kinds of IT projects of similar scale, but the customers will be much more demanding. There are way too many factors that can affect the rankings in search results. A disclaimer ilke this can at least provide a minimum protection for SEO consultants in case they run themselves into a litigation.
Yet in the reality, customer impressions are what really matters. Winning the lawsuit over a customer cannot secure your good standings in the industry afterall. I would suggest to have a better communication with the customer during the whole course of project.
"Managing Expectations!" Whew, that is a topic that can be taught until the "cows come home." (just in case you lost your herd)
Your advice is sound and an absolute must. I can tell you first hand that even placing that clause on the first page, near the top will still not be enough to stop the questions from the client about position.
I have made it a rule/practice that the first thing out of my mouth when speaking to any prospective client or even on a revisit to an existing client is to state, "There are no Guarantees with respect to what position/page rank you will obtain. Our sole purpose is to enable your page(s) of your website to rank as high as possible in the organic search engine results. We do not and can not promise you a position because there arethings we have no control over."
I am very appreciative of the SEOmoz example you provided. Even placing a special and separate plce for the client to initial this clause is of great value.
If we, as SEO Consultants/Business persons can manage this one thing, it makes dong business that much easier. And it keeps the stakeholders in check and much easier to get buy in.
Sarah -
Thank you very much for sharing this. It was particularly helpful for you show your real world example. Cheers!
Ok, I have a dumb question. I don't hold clients to a contract. They are welcome to go to another SEO company at any time they are unhappy with my services.
Now for the dumb question; Why do I need to use contracts at all?
My clients pay for what they get. I give no guarantees except in the case where a specific service is involved such as agreeing to write 10 articles for them, of course I guarantee to write their articles. But I do not EVER promise anything we do will improve their results in Google. Most of my business comes from word of mouth when happy clients refer others to me.
I appreciate any responses that show me why I need to sign a contract with my clients. I probably do need one, but haven't seen the need so far.
I'm no lawyer, I just play one on TV.... You need a contract because in the words of Larry David from Curb Your Enthusiasm about the customer always being right
" Actually most customers are wrong and do not know what they are talking about. On top of that they are usually morons and Assholes!"
This is very true because if you have ever been burned by a customer...you will never go without a written contract. A verbal contract is a binding agreement in the court of law, its just very hard to prove. Contracts can and have been written and enforced on napkins before, so just get something down.
The interesting, and annoying, thing about the US law system is you can sue anyone at anytime for any minute amount of BS. The whole woman spilling her hot coffee on herself and sueing McDonalds successfully set the tone on ridiculous lawsuits. In the US you can sue somone and just walk away "no harm, no foul" win or lose. You just have to pay your court costs and lawyer. Lets say we start limiting the amount of lawsuits by doing this...if you sue someone and lose your lawsuit you must then pay your costs plus the defendents! Then maybe we won't have so many lawsuits in the US.
Written contracts cover your ass...just in case.
Thank you. Can your emails to and from the client stand up in court? If a napkin can . . . :)
Thats a good question and point. I am sure a trail of emails is better than verbal agreement but not as strong as written contracts which is usually accompanied with a signature to validate/confirm the services.
If I were you I would just set up a basic contract, you don't have to confusethem or make things vague like a typical lawyer would. Make it short, sweet and simple.
I too only take business from friends or referrals from friends/past clients. I too only did verbal cotracts and last year I was burned from a referred client of a friend of mine. He owes me about 1500 in back "wages"/work I did on his site. Since I did not have a written contract I did not feel like taking him to small claims court (Small claims court is a rip!). And call me a hippie but I just wasn't up for the hastle and I figured he would get what was coming to him. And he did! He has since had to move to two different locations because he couldn't pay his rent, his website is awful because he didn't pay his programmer either and the prgrammer has taken all his work back and basically deleted the original website. This is the type of person if I saw again on the street I would have serious thoughts of punching him
Chris, it is sad and I wish everyone was honest and had integrity but the fact is you have to be careful. Life is about asses, your either covering it, kissing it, looking for some, laughing it off, you possibly could be one but I guarantee you know someone who is just an ass. Thank them because they are the reason why we need contracts.
You are right. I am going to draw up a basic contract and keep it simple like you said here. Like I need extra paperwork. I have no time now. lol.
I just forwarded this post to Sarah (different Sarah - our new project manager) as she is especially keen on all the client expectation management stuff (understandably). Its value is huge and I wish I were naturally better at it - I'm good at verbal caveats and less good at writing it all down. Standard wordings and processes help me. Great work - thanks.
Writing stuff down? Hey, now that's a great idea!
LOL. I'm the same way. If I do write something down it's on a piece of scrap paper that I conveniently lose soon after.
Greatest marketing ploy in the world. Warrantys and Guarantees are a marketers trick to generate sales.
Reason why is 95%+ of consumers will never use a warranty or guarantee.
Nice post none the less.....
PS Anyone know lawyers offering warranties?
Sarah,
I can't find the last post that you put in the actual agreement copy. I had my lawyer use this as the basis for my own standard agreement - and he was very impressed :) (Did add in some legalese.)
It's also helped me close a deal - the client is soo much happier, and the guarantee doesn't have to be very big...
Thanks again!
A brilliant post - thank you so much, Sarah. I loved the example.
I suggest that you also look into more SEO agreement clauses in the upcoming posts.
Seconded. More agreement related posts will be welcome.
Great post and I would request you to post more on the contract and agreements in SEO.
Today I committed a slight act of puffery during a sales call, then I read this post and I added a disclaimer of warranty to my contract.
Thanks so much, Sarah! You got my back. A very valuable blog post!
I have to say a big thank you to Sarah as I am one of those that asked her advice a few months back.
I included her recommendations on my website and TOS with Google Checkout and it saved me from two rather unpleasant clients the week after.
I never promise anything but to have it signed off on is so much easier to stop the whiners :)
Now I need a PPC disclaimer Sarah
David
I think my fellow English blokes and birds here will love the "Puffery" word ;)
I'll second that PPC request, David!
Right on Sarah! I've had just such a clause in my agreements for over a decade -- before SEO was called SEO -- I always thought it was just common sense good Web Development!
Now, the trick is to make sure your clients read that clause or any agreements you offer them. Most don't. Their eyes glaze over and they get that deer in the headlights look.
So I make a point of going over my Letter of Engagement point by point to ensure we are all on the same page. That extra effort can avoid all kinds of misunderstandings and misconceptions!
BTW, what is the opposite of puffery? That would be me... I know that I've not signed clients because I give them the reality of what to expect and what is involved -- and that just doesn't sound easy or fun! From comments like "you make this so difficult" to, and yes, this actually was said to me "we have to work on your ethics!"
In over 13 years I've not had a single dispute simply because I put all cards on the table and ask the client questions throughout my engagement that allow them to voice their concerns or questions. I make a point of leaving no room for presumptions, incorrect perceptions or unrealistic expectations.
Thanks for providing the wording for the disclaimer!
I was looking for the right words to use.
I think its a must to ADD to any education you already provided to your client. To reinforce what was discussed. I want to make sure they understand the process before I take the job. I am cautious with my predictions and you look good when you then deliver ahead of schedule. I use my gut feeling when I talk to new clients. If you are not on the same page about goals, results and the process then you might have an unhappy client, disclaimer or not.
We need more legal Mondays to cover some of those legal topic that might effect all of us users.
Very good advice. Actually, having details in writing is always good advice. Your are correct about people forgetting/misunderstanding verbal explanations. I have sub-contractors working for me and I always read over the Subcontractor Agreement with them to make sure we both understand what we are agreeing to. When the questions come up later, you have that to refer to.
Thanks.
This is a good post. I agree. I can tell you right now that most SEO's, gfx guys, etc. have NO CLUE about legal issues. This cluelessness ranks right up there with their overall business sense.
I'm not a lawyer, but I've sued them.
Excellent advice! :B