Legal Question in Business Law in Virginia

Payment to exit/forfeit a consulting agreement
I am considering entering into a consulting agreement for services to a contractor on a Federal contract. I have done this before under other federal contractors, but this company provided me a consulting agreement for services to be delivered for 1 year, and added a provision that states ''In the event that Mr. XXX does not honor the commitment of April 20, 2009 to April 20, 2010 he will forfeit the equivalent of one (1) months billings estimated at 160 labor hours.''

That is almost $15,000 I would have to give this company if I tried to break my contract.

Is such a provision a ''norm'', and how should I negotiate with this company? Should I agree to a set fee, say $2000, instead of 160 billed hours?

Asked on 4/15/09, 8:12 pm

Michael Hendrickson Law Office Michael E. Hendrickson

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Re: Payment to exit/forfeit a consulting agreement

Why, of course, negotiate down the forfeiture fee

as far as you can whether it be set or in billable hours.

Answered on 4/16/09, 10:07 am

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