CPEU ARTICLE 1
Protect Your Practice: Understanding Contracts, Copyright and Disclaimers KA R E N A . M I L LS JD, RDN, LD
Congratulations! You have taken that bold step and ventured out on your own. It is hard work to create a practice that reflects who you are as a dietitian, so it is important to protect that investment of time and energy. Protecting your practice means understanding the contracts you enter into and using copyright and disclaimers when appropriate. This article will translate the components of contracts and discuss scenarios in which contracts should be used. It will also explain what copyright and disclaimer protections are, and how and when to use them to protect your dietetic business.
CONTRACTS
A contract is an agreement among two or more parties that itemizes what each party has agreed to do and describes what happens when they don’t.1 Seems simple and straightforward, doesn’t it? Contracts can be simple or very complicated depending on the nature of the relationship and the risk the relationship exposes you to. There are some essential steps when considering whether to enter into a contract. Most importantly, read the contract. All of it. By signing a contract, you are agreeing to do everything that the contract states, so it is vital that you are aware of and understand what you have promised to do. An attorney can help decipher the legal language, but do not rely on your attorney to understand dietetic lingo, as that is your specialty, not theirs. Your attorney probably doesn’t understand the difference between MNT and health coaching and the insurance reimbursement implications of each. Next, contracts should be written, not verbal. Never assume that someone will do something if it is not expressly written into the contract. Perhaps a company has verbally promised to pay you 30 days after invoice
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submission. If the contract does not exactly state that, the company has no obligation to pay you within that time frame and you have no way to force payment. The more precise you are in your contract wording, the less room for a misunderstanding. If you aren’t sure what a particular contract clause means, and your attorney cannot clarify it, change the language of that clause. Contracts manage expectations. So, if you expect a party to do something, do not assume they will. Get it in clear writing! Contracts can contain many components, some of which are fairly straightforward, others much more complex. There are a few clauses that, if they appear in a contract, you should make certain you fully understand before you agree to them. Note that some of the clauses discussed below can also appear as separate, stand-alone contracts. Some contracts contain an indemnity or hold-harmless clause. This clause is usually activated when you do something wrong - when you don’t follow the terms of the contract or when you do follow the terms but do so in a negligent manner. Under this clause, when you do something wrong, and the other party incurs expenses because of this, you must reimburse the other party.2 As long as you are following the contract terms with care, this clause is not likely to be triggered. Be aware of non-compete clauses. A non-compete clause usually appears in one of two ways - prohibiting similar services or prohibiting contact with clients or patients after the contract ends. Non-compete clauses can cover the contract term and often continue after the contract ends. For example, a contract to provide bariatric counseling services may have a clause stating that you cannot provide any bariatric counseling services on behalf of yourself or any other company during the contract term or after the contract ends for a period of one year. This means that you can provide other dietetic
services, just not bariatric counseling during and after the contract. Sometimes non-compete clauses state you cannot contact or provide services to any clients or patients of the company that hired you after the contract ends. This means that you are free to provide services to anyone else, just not a person who was a client or patient of the company at the time your contract ends. This type of non-compete clause is sometimes called non-solicitation. In either event, signing a contract containing a non-compete or non-solicitation clause requires some serious thought as it will limit your future business. Confidentiality clauses are another type of clause to be aware of. Confidentiality provisions can extend beyond HIPAA and include requirements that you keep businessrelated types of information confidential. Confidential information could include client lists, client acquisition processes, company proprietary programs or software, trade secrets, or intellectual property. This sort of clause often extends beyond the contract term as well. Be aware of what your contract considers confidential information because you could be held liable if you disclose that information to third parties. Contract clauses regarding intellectual property may also be important. If you hire someone or are hired to write something, develop a program, create a video or something similar, include language that discusses who owns and may copyright, use or profit from that work once created. See the section on copyright below for more discussion on this topic. So, when do you need a contract? Really you should have a contract every time you or your business enters into a relationship with another person or company. Do you have business partners, consultants, service providers, vendors or employees? Do you rent space? Do you sell things, create content for others or provide
