I have a question about contracts - I am a fundraising consultant and normally change my clients a fixed monthly retained. One client wants to pay me part of the retainer up front, and then the remaining if we successfully help them reach their investment target. Is this legal?
3 Answers from Attorneys
A CONTRACT IS AN AGREEMENT BETWEEN THE PARTIES. IF THESE TERMS ARE ACCEPTABLE TO BOTH PARTIES THEY FORM THE BASIS OF THE CONTRACT.
My colleague is generally correct, however, it's worth pointing out that in some instances only licensed brokers can charge success fees and if a non-broker acts like a broker then the agreement in question may not be enforceable to the benefit of the consultant.
If, however, the second payment is a fixed amount that does not depend on the amount of money raised, then generally speaking one does not need to be a licensed broker and the agreement would be enforceable by you (assuming the agreement protects your interests).
Roman R. Fichman, Esq.
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I think you need to hire an attorney who specializes in this area to look carefully at what's going on. There may be rules about compensation to consultants in the fundraising industry which depend on reaching various targets for donations. I don't know.
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