SKU AGENCY, LLC

TERMS AND CONDITIONS

These Terms and Conditions (“Terms”), together with a Scope of Work (or other document specifically incorporating these Terms), create a binding legal agreement between  between SKU Agency, LLC, a limited liability company organized and existing under the laws of the State of California, with offices located  at 1011 2nd Street, Ste 204, Santa Rosa, California 95404 (“SKU” or “Agency”), and  the “Client” as specifically identified in the Scope of Work.  The Agreement shall be effective on the date the Scope of Work is executed by the Client (“Effective Date”).  Agency and Client may hereinafter be referred to singularly as a “Party” or “party” and collectively as the “Parties” or “Parties.”  

  1. DEFINITIONS
    a.        “
    Agreement” means the Scope of Work, these Terms and any other incorporated documents.

b.        “Project” means the scope and purpose of the Client’s identified usage of the work product as described in the Scope of Work.

c.        “Scope of Work” means a separate document, signed or approved by the parties in writing, outlining the scope of work to be performed, the deliverables to be provided to the Client, payment terms, and other such terms and conditions on which the parties may agree.  All Scopes of Work are governed by and incorporate these Terms.

d.        “Services” means all services and the work product to be provided to Client by Agency as described and otherwise further defined in the Scope of Work.
e.        “
Final Deliverables” means the final versions of Deliverables provided by Agency and accepted by Client.

f.        “Deliverables” means the services and work product specified in the Scope of Work to be delivered by Agency to Client.

g.        “Client Content” means all materials, writing, images or other creative content provided by Client used in preparing or creating the Deliverables.

h.        “Third Party Materials” means proprietary third-party materials which are incorporated into the Final Deliverables, including without limitation stock photography or illustration.

i.        “Agency Tools” means all design and development tools created and/or used by Agency in performing the Services, including pre-existing and newly developed software including source code, Web authoring tools, type fonts, and application tools, together with any other software, or other inventions whether or not patentable, and general non-copyrightable concepts such as website design, architecture, layout, navigational and functional elements.

  1. SERVICES
    Agency shall perform the Services listed the Scope of Work according to the work plan and milestones schedule set forth therein.  All work will be performed according to best practices in the industry.  

  1. PAYMENT
  1. Fees. Client agrees to pay Agency the fees set forth in the Scope of Work, including any applicable taxes (“Fees”).
  2. Expenses: Client will pay Agency expenses, including but not limited to: (a) Incidental and out-of-pocket expenses at cost plus Agency’s standard markup of fifteen percent (15%); (b) Travel expenses, other than normal commuting, but including time spent at Client’s office (or designated physical location), airfare and rental vehicles, with client approval (“Expenses”).
  3. Additional Costs: Pricing in the Scope of Work includes only Agency fees. Any other costs, such as hosting, art licensing or photography, will be billed to Client separately (“Additional Costs”). Agency will provide details of such costs ahead of time to Client and must receive Clients approval before properly incurring such costs.
  4. Non-refundable Deposit: Client agrees to pay a 50% deposit of the fees set forth in the Scope of Work to commence the project, with the balance payable in accordance with section 4 (Payment Schedule). Once research, resources allocated or design work has commenced on a project, this deposit is non-refundable. In the case of a change of mind by the Client, this deposit is non-refundable. Agency endeavors to provide services that meet and exceed a client’s needs and expectations, but in the event of a “change of mind” (after a project has commenced) by the Client, the initial 50% deposit is forfeited, plus a pro-rata payment based upon the time spent.
  5. Hosting Final Deliverables: Unless otherwise agreed in a Scope of Work, Agency will host the Final Deliverables on Agency’s web space or Agency’s Shopify Partner Portal while the Project is under construction. If the Final Deliverables are not completed by the completion date listed in the Scope of Work, and the delay is not caused by Agency, Client agrees to pay Agency sixty-five dollars ($65) per month for hosting until the Final Deliverables are moved to Client’s server or Shopify store credentials are transferred over to Client.

  1. PAYMENT SCHEDULE

a.        General Payment Schedule: Unless otherwise set forth in the Scope of Work, all amounts below $5,000 are due in full prior to the start of the Project.  Amounts between $5,001 – $25,000+, 50% will be due upfront prior to the start of the Project, 25% midway through the Project and 25% upon completion (prior to the launch of the site).

b.        Invoices: All invoices are payable within ten (10) days of receipt. Invoices shall list any expenses and Additional Costs as separate items.

c.        Credential Transfer: Upon receipt of final payment, the Agency will either transfer Deliverables to Client’s server or transfer Shopify Store credentials to Client.

  1. LATE PAYMENT
    a.        
    Late Fee: A monthly service fee of one and one-half percent (1.5%), or the maximum allowed by law, is payable on all overdue balances.

b.        Crediting Late Payments: Payments will be credited to late payments first, then to unpaid balances.

c.        Collection Expenses: Client shall pay all collection or legal fees caused by late payments. d.        Withholding Delivery: Agency may withhold delivery and transfer of ownership of any current work if accounts are not current or overdue invoices are not paid in full.

d.        Withholding License: All grants of any license to use or transfer ownership of any intellectual property rights under this Agreement are conditioned on full payment, including all outstanding Expenses, Fees, or any other charges.

  1. CHANGES TO PROJECT SCOPE
    a.        
    Change Request: If the Client wishes to change the Scope of Work after acceptance of this Agreement or a Scope of Work governed by this Agreement, Client shall send Agency a written Change Order describing the requested changes in detail. Within five (5) days of receiving a Change Order, Agency will respond with a statement proposing its availability, additional fees, changes to delivery dates, and any modification to this Agreement and/or the Scope of Work caused by or required to meet the objectives of the Change Order. Agency will evaluate each Change Order at its standard rate of one hundred thirty-five dollars ($145) per hour.

b.        Major Change: If Client requests are at or near ten (10%) percent of the time required to produce Deliverables or the value of the Scope of Services (“Major Changes”), Agency shall be entitled to submit a new and separate Proposal to Client for written approval. Agency shall not begin work on the revised services until he receives a fully signed revised proposal and any additional fees.

c.        Minor Change: If Client requests are not Major Changes (“Minor Changes”), Client will be billed on a time and materials basis at Agency’s hourly rate of one hundred and thirty-five dollars ($145) per hour. Such charges shall be in addition to all other amounts payable under this Agreement, despite any maximum budget, contract price or final price identified. Agency may extend or modify any delivery schedule or deadlines in the Agreement as may be required by such changes.

d.        Acceptance/Rejection: Client will have ten (10) days to respond in writing accepting or rejecting the new proposal. If the Client rejects the proposal, the Agency will not be obligated to perform any services beyond those in the original Agreement.

  1. DELAYS
    a.        
    Agency Delays: Agency shall use all reasonable efforts to meet the work plan and milestones delivery schedule. Agency may extend the due date for any Deliverable by giving written notice to Client.

b.        Client Delays: Client shall use all reasonable efforts to provide needed information, materials and approvals. Any delay by Client will result in a day-for-day extension of the due date for all Deliverables.

c.        General Delays: Any delay caused by conditions beyond the reasonable control of the parties shall not be considered a breach and will result in a day-for-day extension of any performance due (which shall not be counted against Agency’s maximum delays as set forth in 7.a. above). Each party shall use reasonable efforts to notify the other party, in writing, of a delay. Conditions beyond the reasonable control of the parties include, but are not limited to, natural disasters, acts of government after the date of the agreement, power failure, fire, flood, acts of God, labor disputes, riots, acts of war, terrorism, pandemics and epidemics.

  1. EVALUATION AND ACCEPTANCE
    a.        
    Testing: Agency will test and correct Deliverables using commercially reasonable efforts before providing Final Deliverables to Client.

b.        Approval Periods: Client shall, within five (5) business days after receiving each Deliverable, notify Agency in writing of any failure to comply with the specification of the Scope of Work or of any other objections, corrections or changes required. The Agency shall, within five (5) business days of receiving Client’s notification, correct and submit a revised Deliverable to Client. Client shall, within five (5) business days of receiving a revised Deliverable, either approve the corrected version or make further changes. If the Client fails to provide approval or comments during any approval period, those Deliverables will be considered approved and accepted. All objections, corrections and changes shall be subject to the terms and conditions of this Agreement.

  1. CLIENT RESPONSIBILITIES
    Client acknowledges that it is responsible for performing the following in a reasonable and timely manner: (a) Provide Client Content in a form suitable for use in the Deliverables without further preparation by Agency, unless otherwise specified in the Scope of Work; (b) Proofread all Deliverables; (c) Make decisions regarding other parties.  The client will be charged for correcting errors after the acceptance of any Deliverable.

  1. ACCREDITATION AND PROMOTION
    a.        
    Accreditation: Agency shall be entitled to place accreditation subject to Client’s approval, as a hyperlink or otherwise, in the form, size and location as incorporated by Agency in the Deliverables on each page of the Final Deliverables.

b.        Promotion: Agency retains the right to reproduce, publish and display the Deliverables in Agency’s portfolios and websites, in galleries, design periodicals and other media or exhibits for the purposes of recognition of creative excellence or professional advancement, and to be credited with authorship of the Deliverables in connection with such uses.

c.        Promotional Approval: Either party, subject to the other’s reasonable approval, may describe its role in the Project on its website and in other promotional and marketing materials, and, if not expressly objected to, include a link to the other party’s website.

  1. CONFIDENTIAL INFORMATION

For purposes of this Agreement, the term “Confidential Information” shall be deemed to include all information and materials furnished by or on behalf of Client to Agency and/or otherwise arising from and/or in connection with the Services, including, without limitation, all information transmitted in writing, orally, visually (i.e., video terminal display) or on magnetic media.

All Confidential Information shall remain the property of the Client at all times. The agency shall use such Confidential Information only for the purpose, and to the extent necessary, to fulfill its obligations under this Agreement (and the applicable Statement of Work). In any event, the Agency shall promptly return all Confidential Information to Client no later than the termination of this Agreement or immediately upon the request of Client.

Nondisclosure. Agency agrees and acknowledges that it shall have no proprietary interest in the Confidential Information and will not disclose, communicate nor publish the nature or content of such Confidential Information to any person or entity, nor use, except as authorized in writing by Client, any of the Confidential Information Agency produces, receives, acquires or obtains from Client and/or as a result and/or arising from this Agreement. Agency shall take all necessary steps to ensure that the Confidential Information is securely maintained. Agency’s obligations set forth herein shall survive the termination or expiration of this Agreement.  Notwithstanding the foregoing, Agency may share Confidential Information with it’s third party contractors or service providers in order to render the Services and deliver the Deliverables; Agency has entered into, or will enter into, confidentiality agreements with its third party contractors or service providers which, at a minimum, provide for the same confidentiality as required by this Section 11.  

  1. RELATIONSHIP OF THE PARTIES

a.        Independent Contractor: Agency is an independent contractor. Agency shall determine, in its sole discretion, the manner and means by which the Services are accomplished. No agency, partnership, joint venture, or employee-employer relationship is intended or created by this Agreement. Neither party is authorized to act as an agent or bind the other party except as expressly stated in this Agreement. Agency and the work product or Deliverables prepared by Agency shall not be deemed a work for hire as defined under Copyright Law. All rights granted to Client are contractual in nature and are expressly defined by this Agreement.

b.        Service Agents. The Agency shall be allowed to use third party’s as independent contractors in connection with the Services (“Service Agents”).  Agency shall remain fully responsible for Service Agents’ compliance with this Agreement.

c.        No Exclusivity. This Agreement does not create an exclusive relationship between the parties. The client is free to engage others to perform services of the same or similar nature to those provided by Agency, and Agency shall be entitled to offer and provide development, design, consulting and marketing services to others, solicit other clients and otherwise advertise the services offered by Agency.  

 

  1. REPRESENTATIONS
    a.        
    Client Representations. Client represents and warrants to Agency that: (a) To the best of Client’s knowledge, use of the Client Content does not infringe the rights of any third party; (b) Client shall comply with the terms and conditions of any licensing agreements which govern the use of Third Party Materials; (c) Client will obtain all necessary and appropriate rights and licenses to grant license to Agency to use Third Party Materials.

b.        Agency Representations: Agency represents and warrants to Client that: (a) Agency will provide the Services identified in the Agreement in a professional and workmanlike manner; (b) Agency shall secure all necessary rights, title, and interest in and to the Final Deliverables, including Agency Tools, sufficient for Agency to grant the intellectual property rights provided in this Agreement; (c) To the best of Agency’s knowledge, the Deliverables will not violate the rights of any third parties; (d) If Client or third parties modify the Deliverables or use the Deliverables outside of the scope or purpose of this Agreement, all representations and warranties of Agency shall be void.  

EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT, AGENCY MAKES NO WARRANTIES WHATSOEVER. AGENCY EXPLICITLY DISCLAIMS ANY OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR COMPLIANCE WITH LAWS OR GOVERNMENT RULES OR REGULATIONS APPLICABLE TO THE PROJECT.

  1. INDEMNIFICATION AND LIABILITY

a.        Client Indemnification: Client shall indemnify Agency from any and all damages, liabilities, costs, losses, expenses or attorneys’ fees arising out of any claim, demand, or action by a third party arising out of any breach of Client’s responsibilities or obligations, representations or warranties under this Agreement. Agency shall promptly notify Client in writing of any third-party claim or suit.  Client shall have the right to fully control the defense and any settlement of such claim or suit.

b.        Agency Indemnification: In the case of a third party lawsuit or proceeding based on a claim that Deliverables breach the third party’s intellectual property rights, and it is determined that such infringement has occurred, Agency may at its own expense, replace any infringing content with non-infringing content.

c.        Limitation of Liability. THE SERVICES AND THE WORK PRODUCT OF AGENCY ARE SOLD “AS IS.” IN ALL CIRCUMSTANCES, THE MAXIMUM LIABILITY OF AGENCY, ITS DIRECTORS, OFFICERS, EMPLOYEES, SERVICE AGENTS AND AFFILIATES (“AGENCY PARTIES”), TO CLIENT FOR DAMAGES FOR ANY AND ALL CAUSES WHATSOEVER, AND CLIENT’S MAXIMUM REMEDY, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL BE LIMITED TO THE FEES PAID BY CLIENT TO AGENCY. IN NO EVENT SHALL AGENCY BE LIABLE FOR ANY LOST DATA OR CONTENT, LOST PROFITS, BUSINESS INTERRUPTION OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THE MATERIALS OR THE SERVICES PROVIDED BY AGENCY, EVEN IF AGENCY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

  1. TERM AND TERMINATION
    a.        
    Term: This Agreement shall begin when both parties sign and Agency begins to render its Services and it shall continue until all Services are complete and delivered, or until the Agreement is properly terminated.

b.        Termination for Cause: Either party may terminate this Agreement at any time, on thirty (30) days prior written notice if the other party breaches any of its material responsibilities or obligations under this Agreement and fails to cure that breach within seven (7) days.

c.        Termination for Insolvency: Either party may terminate this Agreement at any time, on written notice to the other party, if the other party ceases to conduct business in its normal course; makes an assignment for the benefit of creditors; is liquidated or otherwise dissolved; becomes insolvent; files a petition in bankruptcy; or a receiver, trustee, or custodian is appointed for it.

d.        Termination by Mutual Agreement: This Agreement may be terminated by the mutual agreement of the parties.

e.        Termination Fees: In the event of termination, Client shall pay Agency for the Services performed through the date of termination in the amount of a prorated portion of the Fees due. Client shall pay all Expenses, Fees, and Additional Costs incurred through the date of termination.

f.        Intellectual Property: If Client terminates and on full payment of compensation, Agency grants Client right and title as provided by this Agreement with respect to those Deliverables provided and accepted by Client as of the date of termination.

g.        Confidential Information: On expiration or termination of this Agreement: (a) each party shall return or, at the disclosing party’s request, destroy the Confidential Information of the other party, and (b) all rights and obligations regarding Confidential Information shall survive.

  1. RIGHTS TO DELIVERABLES
    a.        
    Client Content: Client Content is the exclusive property of the Client. Client grants Agency a non-exclusive, nontransferable license to use, reproduce, modify, display and publish the Client Content solely in connection with Agency’s performance of the Services and limited promotional uses of the Deliverables as authorized in this Agreement.  

b.   Right to Final Deliverables.  Upon completion of the project and full compensation under the section 3.0, Client will have full ownership of the source code for the Final Deliverables (if applicable).  Code ownership excludes any background technology which is defined as any creations (including any technology, inventions, discoveries, works of authorship or other prior creations) that were conceived, created or reduced to practice prior to commencement of this Agreement. Agency grants the Client a nonexclusive royalty free license to use any background technology which may be included in the private Shopify app.

c.        Preliminary Works. Agency retains all rights in and to all in works or content created before or specifically for the creation of the Final Deliverables (“Preliminary Works”). If Client is given any Preliminary Works, Client shall return all Preliminary Works to Agency within thirty (30) days of completion of the Services.  

d.        Agency Tools. All Agency Tools are and shall remain the exclusive property of Agency. Agency grants Client a nonexclusive, nontransferable, perpetual, worldwide license to use the Agency Tools solely to the extent necessary with the Final Deliverables for the Project.

  1. SUPPORT SERVICES
    a.        
    Warranty Period/Maintenance Period. Agency shall perform update or maintenance services free of charge for thirty (30) days from the completion of the Project (“ Period”).  After the Warranty Period of this agreement expires and at Client’s option, Agency will provide Support Services at Agency’s hourly fees of one hundred forty-five dollars ($145) per hour (“Maintenance Period”).

b.        No Enhancements: The services in the Warranty Period and the Maintenance Period do not include enhancements to the Project or other services outside the scope of the Proposal.  Enhancements do not include services or deliverables called for in the Scope of Work but not completed or provided in incomplete fashion or form (“Open Items”). 

c.        Priority Support Services.  Client may enter into an agreement with Agency (including in the terms of a Scope of Work) according to which it will provide a retainer to Agency for maintenance and support services on a monthly basis (“Priority Support”).  If Client agrees to Priority Support, Client shall pay the Agency the agreed upon retainer amount and Agency shall bill against the retainer until the amount of the Support Retainer is completely consumed.  Priority Support starts at a minimum of 5 hours per month and generally sold in blocks of 5 hours per month. Any remaining unused time will expire at the end of each month. Agency will bill against the Priority Support according to the following schedule based on the different types of services provided:

a. Normal (1x standard hourly rate) - Regular maintenance requests.

b. Expedited (1.5x standard hourly rate) - Urgent requests requiring completion within 1-3 days.

c. Emergency (3x standard hourly rate) - Immediate attention required, such as nights, weekends, or holidays.

Agency’s standard hourly rate for determining the amount of support or maintenance services provided is one hundred thirty-five dollars ($135) per hour. Any overage will be billed at Agency’s standard rate of one hundred forty-five dollars ($145) per hour.   

  1. ENHANCEMENTS
    a.  During the Maintenance Period, the Client may request that the Agency develop enhancements to the Deliverables. The Agency shall exercise commercially reasonable efforts to prioritize the Agency’s resources to create such enhancements. Client understands the Agency may have pre-existing obligations that may delay requested enhancements. The Agency shall provide any enhancements on
     a time and materials basis at Agency’s standard rate.  Agency’s standard rate is currently one hundred forty-five dollars ($145) per hour for enhancements.  
    b.  Alterations. Alteration of any Deliverable is prohibited without the express permission of the Agency. Agency will be given the first opportunity to make the required alterations.

Unauthorized alterations shall constitute additional use and will be billed accordingly.

  1. GOVERNING LAW, VENUE AND DISPUTE RESOLUTION
    a.        
    Governing Law.  This Agreement, and any dispute or action brought to interpret or enforce this Agreement, shall be governed by the laws of the State of California without reference to any Conflict of Laws rules.  
  1. Exclusive Venue.  Any dispute or action, whether brought in arbitration, mediation or litigation, must be brought in the County of Sonoma, State of California.  The parties waive any jurisdictional or venue defenses available to them and further consent to service of process by mail.
  2. Negotiation: Parties agree to reasonably attempt to resolve any dispute by negotiation between the parties before submitting the matter for arbitration or mediation.  

c.        Arbitration/Mediation: If parties are unable to resolve the dispute by negotiation, either party may start mediation and/or arbitration in a forum mutually agreed to by the parties.

d.        Litigation: Only in the event the parties cannot resolve their dispute or claim by mediation or arbitration, may the parties file litigation in the state courts of the County of Sonoma, State of California.  

e.        Attorneys’ Fees: The prevailing party shall be entitled to recover its attorneys’ fees and costs in any dispute resolved by binding arbitration or litigation.

  1. GENERAL
    a.        
    Modification/Waiver. Modifications to this Agreement must be in writing and signed by both parties. Failure by either party to enforce any right or seek to remedy any breach under this Agreement shall not be construed as a waiver of such rights nor shall a waiver by either party of default in one or more instances be construed as constituting a continuing waiver or as a waiver of any other breach.

b.        Notices. All notices under this Agreement shall be given in writing either by: (a) Email, with return confirmation of receipt; or, (b) Certified or Registered mail, with return receipt requested. Notice will be effective when received, or in the case of email or fax, on confirmation of receipt.

c.        No Assignment. Rights or obligations under this Agreement shall not be transferred, assigned or encumbered without the prior written consent of the other party.

d.        Severability: If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect. Where possible the invalid or unenforceable provision shall be interpreted in such manner as to be effective and valid under applicable law.

e.        Headings: Headings and numbering used in this Agreement are for convenience and reference only and shall not affect the scope, meaning, intent or interpretation of this Agreement, and shall not have any legal effect.

f.        Complete Agreement: This Agreement is the entire understanding of the parties and supersedes all prior understandings and documents relating to the subject matter of this Agreement.

g.        Conflict with Scope of Work.  If any term or condition in these Terms conflicts with a term or condition contained in a Scope of Work, the Scope of Work shall control with respect to the Services and Deliverables set forth therein.

SKU Agency, LLC Terms and Conditions