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The attitude of many freelancers staring at a long agency agreements with
small print is either to consider it a “mission impossible” to actually read
and understand it or fatalistically hope that it never becomes relevant,
whatever it is written there. Thus, feeling helpless, they sign it blindly.
Unfortunately, most agency service agreements include a very problematic clause that
should and can be negotiated. Specifically, numerous agencies try to impose
unlimited liability on the service provider for any damage, direct or indirect,
resulting from an error. To quote a recent agreement I received: “The supplier
shall ensure that the goods or services it provides are free from defects and
feature the warranted characteristics. The liability of the supplier in this
respect is unlimited.” This potential for huge loss is real but the service
provider can quickly and easily identify the terminology in the contract and
have the agency insert reasonable liability language, eliminating the risk.
It is a mistake to dismiss such a risk as theoretical only. First, it is true that US and
possibly European consumer law possibly does protect parties from outrageous
terms in “adhesion contracts”, agreements such as those binding consumers on various Internet
sites and purchase agreements. However, these laws often do not protect
agreements between businesspeople, who are expected to read and understand what
they sign. Furthermore, many freelancers, especially translators, mistakenly
believe that the clause is on paper only and is never applied. I personally
know of one incident of a translator that had to pay for reprinting of a run of
books after the publisher belatedly discovered a critical error. As in all
statistical incidents, there is no consolidation in being the 1 in the nth
number. Unfortunately, liability insurance is generally not a practical option as
In most countries, the premium is far too expensive to justify given the
freelancer’s income and frequency of events. Thus, ignoring the risk can be
ruinous.
To protect themselves, freelance service providers merely need to take
the following steps. First, conduct a search (Control F) in the Word or PDF document
for the words “indem” and “liab” The results should identify those clauses that
contain “indemnify/indemnification and liable/liability and may pose some risk.
In my opinion and I am not a lawyer, it is possible to ignore those terms when
they refer to data protection or non-disclosure as the freelancer has full
control of the matter. However, if the agency wants to impose unlimited
liability on the service provider for defects, a matter of disputed definition
and wide-ranging consequences, it is necessary to negotiate and insist
on a restricting clause. In translation, it is standard to limit liability to
the amount of the invoice. While a few agencies, generally the larger ones,
refuse to compromise, most bodies I have
negotiated with have had no issue with the proposed clarification.
This efficient manner of identifying and avoiding a serious potential
problem requires little effort and prevents financial stress and disaster. Regarding the sentences cited in the first
paragraph, the agency in question agreed to add the following sentence: “The service provider's maximum
liability per occurrence shall not exceed the total amount invoiced.” We are
now off and running. Even with individual customers, that limitation is a part
of my conditions. An additional benefit, at least for a legal translator, is
that the customers know that we actually read contracts. Knowledge is power.
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Picture captions help the blind fully access the Internet.
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