Manage Client Expectations And Reduce Your Risk By Including A Warranty Disclaimer In Your Client Contracts

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).

There are a few important things about disclaimers 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