Negotiating Contract Penalties

Summary

Freelancers may encounter high penalty clauses in contracts, which can be risky. Its advisable to negotiate these terms with the agency to make them more reasonable. You can express your professionalism, propose a lower penalty, or suggest a cap on the total amount. Additionally, consider including a mediation or arbitration clause for dispute resolution. Discussing these concerns with the agency can lead to a more balanced agreement.

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i haven't discussed yet. what should i tell the agency?
You might say something like:
"I have some concerns about the penalty clause in the contract. The stipulated penalty seems quite high and could pose a significant risk. Can we discuss possible adjustments to this clause to make it more reasonable for both parties?"
Would you like more tips on how to approach the negotiation?
yes
You could also mention:
*. Highlight your professionalism and reliability to the agency.
*. Propose a lower penalty or a cap on the total amount.
*. Suggest a mediation or arbitration clause for disputes instead of a high penalty.
Would you like more specific examples of how to phrase these points?
yes
You could say something like:
*. "I take pride in my work and have a strong track record of meeting client expectations. Could we consider a lower penalty amount?"
*. "Would you be open to setting a cap on the total penalty amount to make it more manageable?"
*. "Could we include a mediation or arbitration clause for resolving disputes instead of the high penalty?"
Do you need any more help with this contract or any other legal concerns?