15d • Support Needed 💻
I Need Help From Someone Who's Been Down This Road
COMMUNITY REVIEW REQUEST
AI Contractor Agreement — Redacted for Privacy
I just landed my biggest client — a 19-location
franchise — and they sent me a fully drafted Master
Services Agreement tonight with their signature
already on it. Before I sign I want experienced eyes
on a few clauses that concern me.
Here are the specific items I'm pushing back on
and why. The full redacted contract follows below.
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THE THREE ITEMS IN QUESTION
═══════════════════════════════════════════════════
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ITEM 1 — NON-COMPETE (Section 6.4)
STATUS: Pushing back — too broad
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WHAT IT SAYS:
For 24 months after the engagement ends, I cannot
provide AI consulting, development, or implementation
services to any business in the quick lube, oil
change, or automotive preventive maintenance
industry — in any state where the client currently
operates or plans to operate.
WHY IT'S A PROBLEM:
- 24 months is a long time in a fast-moving
industry
- The automotive services space is one of my
core target verticals
- "Any state where they plan to operate" is vague
— they're expanding, so this could cover more
and more states over time
- It's not just their direct competitors — it's
the entire industry category
MY PROPOSED COUNTER:
Reduce to 12 months. Limit to direct quick lube
and oil change competitors actively operating in
the same specific markets as the client at the
time of termination — not the entire industry
across all states.
QUESTIONS FOR THE COMMUNITY:
- Is 12 months reasonable for this type of
engagement?
- Is market-specific language standard or will
they push back hard?
- Have any of you successfully negotiated
non-competes down in service agreements?
─────────────────────────────────────────────────
ITEM 2 — NO-REPLICATION CLAUSE (Section 6.5)
STATUS: Pushing back — scope too wide
─────────────────────────────────────────────────
WHAT IT SAYS:
For 24 months after the engagement ends, I cannot
design, develop, sell, or deploy any tool that is
"substantially similar" to anything I built for
them — even for clients OUTSIDE the automotive
industry.
WHY IT'S A PROBLEM:
I'm an AI automation contractor. The tools I build
for this client — scheduling engines, inventory
analyzers, fraud detection tools, knowledge bases,
voice agents — are the same tools I build for
every client. They're not proprietary concepts.
They're standard AI automation builds applied to
their specific data.
If I can't build a scheduling engine for a
restaurant or a knowledge base for a law firm
because it's "substantially similar" to what I
built for this automotive client — my entire
business is crippled for 2 years.
MY PROPOSED COUNTER:
The no-replication restriction should be limited
to the automotive preventive maintenance industry
only — consistent with the non-compete. I retain
full rights to build similar tools for any
business outside that industry using my own
skills, platforms, and general expertise.
QUESTIONS FOR THE COMMUNITY:
- Has anyone seen this clause before?
- Is "substantially similar" language typically
enforceable when it applies outside the
client's own industry?
- How did you handle protecting your right to
reuse tool types across clients?
─────────────────────────────────────────────────
ITEM 3 — HOURS LANGUAGE (Section 2.1)
STATUS: Clarification needed — minor but important
─────────────────────────────────────────────────
WHAT IT SAYS:
The retainer covers a flat number of hours per
month across all active projects.
THE AMBIGUITY:
In our verbal agreement the client said
"10 hours per week." The written contract says
"[X] hours per month." Those are slightly
different numbers — 10 hrs/week averages out
to roughly 43 hours/month in a 5-week month,
not 40.
More importantly — weekly caps create problems
when project work is uneven. Some weeks I'll
need to sprint 15 hours. Other weeks 5 hours.
If the contract implies a weekly limit I could
technically be in breach during a heavy week
even if my monthly total is under budget.
MY PROPOSED COUNTER:
The contract should explicitly state hours are
tracked monthly with no weekly cap. I report
hours monthly with my invoice. Overage approval
is also monthly.
QUESTIONS FOR THE COMMUNITY:
- Is monthly tracking standard in your retainer
agreements?
- Any issues you've run into with weekly vs
monthly hour tracking?
═══════════════════════════════════════════════════
OTHER NOTABLE CLAUSES (not pushing back but FYI)
═══════════════════════════════════════════════════
- ALL IP belongs to the client — everything I
build is theirs. Standard for work-for-hire
but worth noting.
- Pre-Existing IP requires written approval
before use — I need to get blanket approval
for my standard platforms (no-code tools,
AI platforms, automation tools) before I start.
- Subcontractors require written approval —
I cannot bring in help without notifying
the client first.
- 48-hour breach notification — if any data
incident occurs I have 48 hours to notify
them in writing.
- 30 days written notice to terminate —
either party, no penalties.
═══════════════════════════════════════════════════
FULL REDACTED CONTRACT BELOW
═══════════════════════════════════════════════════
MASTER SERVICES, NON-DISCLOSURE, AND INTELLECTUAL
PROPERTY AGREEMENT
This Agreement is entered into as of [DATE] by and
between:
[CLIENT COMPANY], a multi-location automotive
services network, [State] ("Company"); and
[CONTRACTOR NAME], operating through
[CONTRACTOR BUSINESS], [website] ("Contractor").
Collectively referred to as the "Parties."
───────────────────────────────────────────────────
1. SERVICES
───────────────────────────────────────────────────
1.1 Scope. Contractor will design, develop, and
implement artificial intelligence systems, automation
tools, and related technology projects as defined in
one or more Statements of Work ("SOW") executed by
both Parties. Each SOW will specify deliverables,
timeline, and fees. In the event of a conflict
between a SOW and this Agreement, this Agreement
controls.
1.2 Independent Contractor. Contractor is an
independent contractor, not an employee, agent, or
partner of Company. Contractor is solely responsible
for all taxes, insurance, and benefits arising from
the engagement. Nothing in this Agreement creates an
employment relationship.
1.3 Conflict of Interest. Contractor represents
that, as of the Effective Date, Contractor has no
existing client relationships, contracts, or
obligations that would conflict with the Services or
require disclosure of Company's Confidential
Information. Contractor shall promptly disclose to
Company any future conflict that arises during the
engagement.
1.4 System Access. Company may grant Contractor
access to internal systems, platforms, and
credentials solely as necessary to perform the
Services. Contractor shall: (a) use access only for
the agreed scope; (b) store all credentials securely
using encrypted methods; (c) not share access with
any third party without written approval; and (d)
immediately notify Company of any suspected
unauthorized access. Upon engagement end, Company
will revoke all access and Contractor shall confirm
no credentials are retained.
───────────────────────────────────────────────────
2. FEES AND PAYMENT
───────────────────────────────────────────────────
2.1 Monthly Retainer. Company shall pay Contractor
a flat monthly retainer of [AMOUNT] per month, which
covers [X] hours of Services per month across all
active projects. Payment is triggered by Contractor's
invoice. Contractor shall submit a monthly invoice
on or before the 1st of each month. Company shall
issue payment by check within ten (10) business days
of receiving the invoice.
2.2 Overage Hours. If the scope of active SOWs
requires Contractor to exceed [X] hours in a given
month, Contractor shall notify Company in writing
before performing overage hours. Overage work must
be approved in writing before it is performed. No
overage hours will be invoiced without prior written
authorization.
2.3 No Rollover. The monthly retainer is a flat fee
for availability and Services rendered. Unused
capacity in any given month does not roll over,
accrue credit, or reduce future monthly obligations.
2.4 Scope Overages. If Company requests work
materially outside the scope of active SOWs and both
Parties agree it exceeds the retainer, additional
fees shall be agreed upon in writing via an amended
or new SOW before work begins.
2.5 Termination of Retainer. Either Party may
terminate the retainer arrangement with thirty (30)
days' written notice. Company may terminate
immediately for material breach by Contractor. Upon
termination, Company owes only the pro-rated retainer
for Services performed through the termination date.
No early termination penalties apply.
2.6 Expenses. Contractor shall not incur reimbursable
expenses without prior written approval from Company.
───────────────────────────────────────────────────
3. CONFIDENTIALITY
───────────────────────────────────────────────────
3.1 Definition. "Confidential Information" means all
non-public information disclosed by either Party,
including: customer PII and vehicle records; employee
data and compensation; financial data, store
performance metrics; vendor contracts and pricing;
operational systems and SOPs; AI prompts,
configurations, and models; franchise terms; and any
information a reasonable person would understand to
be confidential.
3.2 Mutual Obligations. Each Party shall: (a) hold
the other's Confidential Information in strict
confidence; (b) use it only as necessary to perform
under this Agreement; (c) not disclose it to any
third party without prior written consent; and (d)
protect it with no less than reasonable care.
3.3 Engagement Confidentiality. Neither Party shall
disclose the existence, scope, or terms of this
Agreement without the other's prior written consent,
except to legal or financial advisors bound by
confidentiality.
3.4 Contractor-Specific Restrictions. Contractor
shall not use Company's Confidential Information to:
- Compete with Company or assist any competitor
- Solicit Company's customers, vendors, or partners
- Train, fine-tune, or improve any AI model
- Derive commercial benefit outside the scope of
this Agreement
3.5 Subcontractors. Contractor shall not grant any
third party access to Company's Confidential
Information without Company's prior written approval.
Any approved party must sign a confidentiality
agreement at least as protective as this one.
───────────────────────────────────────────────────
4. DATA PROTECTION
───────────────────────────────────────────────────
4.1 Personal Data. Contractor shall handle all
customer and employee personal data in compliance
with applicable law. Contractor shall not process,
use, or retain personal data beyond what is strictly
necessary for the Services.
4.2 No Sale of Data. Contractor shall not sell,
rent, license, or transfer any Company data to any
third party for any purpose.
4.3 Breach Notification. Contractor shall notify
Company in writing within forty-eight (48) hours of
discovering any actual or suspected unauthorized
access to or disclosure of Confidential Information.
───────────────────────────────────────────────────
5. INTELLECTUAL PROPERTY
───────────────────────────────────────────────────
5.1 Ownership. All Deliverables — including code,
software, AI models, prompts, configurations, tools,
documentation, and any other work product created
by Contractor under this Agreement — are works made
for hire owned exclusively by Company. To the extent
any Deliverable does not qualify as a work made for
hire, Contractor irrevocably assigns all right,
title, and interest to Company.
5.2 Pre-Existing IP. Contractor shall not
incorporate any Pre-Existing IP into any Deliverable
without prior written approval from Company. If
approved, Contractor must: (a) identify it in the
applicable SOW; (b) grant Company a perpetual,
irrevocable, royalty-free license to use it as
embedded in the Deliverable; and (c) confirm no
future fees or restrictions will be imposed on
Company's use of that embedded IP.
5.3 Further Assurances. Contractor will sign any
documents reasonably requested to perfect or enforce
Company's IP rights.
5.4 No License. Nothing here grants Contractor any
license to Company's pre-existing IP, brand assets,
or systems beyond what is strictly necessary to
perform the Services.
───────────────────────────────────────────────────
6. CONDUCT, NON-SOLICITATION, AND COMPETITIVE
RESTRICTIONS
───────────────────────────────────────────────────
6.1 Scope Limitation. Contractor's access to Company
systems and personnel is limited to activities
necessary to deliver the Services.
6.2 Mutual Non-Solicitation. During the engagement
and for two (2) years after termination, neither
Party shall solicit, recruit, or hire the other's
employees or contractors.
6.3 No Competing Use of Relationships. Contractor
shall not use access to Company's vendor
relationships, customer data, or business partners
to pursue opportunities adverse to Company.
6.4 Non-Compete. ⚠️ ITEM IN QUESTION
During the engagement and for twenty-four (24)
months following termination, Contractor shall not
provide AI consulting, development, or implementation
services to any Competing Business. "Competing
Business" means any business in the quick lube, oil
change, or automotive preventive maintenance services
industry — including franchise networks,
multi-location operators, and independent shops —
in any state where Company currently operates or
has announced plans to operate.
CONTRACTOR'S PROPOSED REVISION:
Reduce to twelve (12) months. Limit to direct quick
lube and oil change competitors actively operating
in the same specific markets as Company at the time
of termination. General automotive services
businesses not directly competing with Company's
service model are excluded.
6.5 No-Replication. ⚠️ ITEM IN QUESTION
During the engagement and for twenty-four (24)
months following termination, Contractor shall not
design, develop, sell, license, or deploy any tool
substantially similar to any Deliverable built under
this Agreement — for the benefit of any Competing
Business.
CONTRACTOR'S PROPOSED REVISION:
Restrict replication prohibition to the automotive
preventive maintenance industry only. Contractor
retains full rights to build scheduling engines,
inventory tools, knowledge bases, voice agents,
fraud detection tools, and similar AI applications
for clients in any other industry using Contractor's
own skills, platforms, and general expertise.
6.6 Carve-Out. Nothing in Sections 6.4 or 6.5
prohibits Contractor from providing general-purpose
AI services to businesses outside the automotive
preventive maintenance industry, or from using
general skills and expertise developed independently
of Company's Confidential Information.
───────────────────────────────────────────────────
7. RETURN AND DESTRUCTION OF INFORMATION
───────────────────────────────────────────────────
Upon engagement end, Contractor shall within five
(5) business days: (a) return all Company
Confidential Information; (b) permanently delete all
electronic copies; and (c) provide written
certification of completion.
───────────────────────────────────────────────────
8. TERM AND TERMINATION
───────────────────────────────────────────────────
8.1 Term. This Agreement continues until terminated
by either Party on thirty (30) days' written notice,
or immediately by Company for Contractor's material
breach.
8.2 Effect of Termination. Upon termination, Company
will pay for all Services satisfactorily completed
through the termination date. Contractor shall
deliver all work in progress to Company.
8.3 Survival. Sections 3, 4, 5, 6, 7, 9, and 10
survive termination.
───────────────────────────────────────────────────
9. LIMITATION OF LIABILITY
───────────────────────────────────────────────────
9.1 Mutual Cap. Except for breaches of Sections 3,
4, or 5, neither Party's total liability shall
exceed the total fees paid in the six (6) months
preceding the claim.
9.2 Exclusion of Consequential Damages. Neither
Party shall be liable for indirect or consequential
damages, except in connection with a breach of
confidentiality or IP obligations.
9.3 Remedies for Breach. A breach of Sections 3,
4, or 5 would cause irreparable harm. Either Party
may seek injunctive relief without posting a bond.
The prevailing Party in any enforcement action
shall recover reasonable attorneys' fees.
───────────────────────────────────────────────────
10. EXCEPTIONS TO CONFIDENTIALITY
───────────────────────────────────────────────────
Confidentiality obligations do not apply to
information the Receiving Party proves: (a) was
lawfully known before disclosure; (b) became public
through no fault of the Receiving Party; (c) was
independently developed; or (d) must be disclosed
by law or court order with prompt written notice.
───────────────────────────────────────────────────
11. GENERAL PROVISIONS
───────────────────────────────────────────────────
11.1 Governing Law. [State] law governs. Disputes
resolved in [State] courts.
11.2 Entire Agreement. This Agreement plus all SOWs
constitute the entire agreement between the Parties.
11.3 Amendments. Modifications require written
instrument signed by both Parties.
11.4 Severability. If any provision is unenforceable,
remaining provisions stay in effect.
11.5 No Waiver. Failure to enforce any right is not
a waiver of that right.
11.6 Counterparts. May be signed in counterparts
including electronic signatures.
═══════════════════════════════════════════════════
SOW SUMMARIES (REDACTED)
═══════════════════════════════════════════════════
SOW 001 — AI Operations Hub
Centralized portal for all AI tools. Role-based
login, unified dashboard, admin panel, scalable
architecture. Timeline: [Month 1-2].
SOW 002 — AI Employee Scheduler
Traffic-data-driven scheduling tool with payroll
and scheduling platform integration. Multi-location
support. Timeline: [Month 1-2].
SOW 003 — AI Inventory Order Assistant
Inventory analysis and automated reorder
recommendations integrated with POS data.
Timeline: [Month 2-3].
SOW 004 — AI Vendor / Purchase Audit Tool
Vendor audit engine flagging anomalies, pricing
variances, and unauthorized purchases.
Timeline: [Month 2-3].
SOW 005 — AI Operations Knowledge Assistant
Natural-language Q&A tool built on internal
process documents and standards guides.
Timeline: [Month 2-3].
═══════════════════════════════════════════════════
WHAT I'M ASKING THE COMMUNITY
═══════════════════════════════════════════════════
1. Are my three pushbacks reasonable or am I
overreacting?
2. On the non-compete — is 12 months /
market-specific language something you've
negotiated successfully?
3. On the no-replication — has anyone dealt
with language this broad before? Is it
even enforceable outside the client's
own industry?
4. On hours — monthly vs weekly tracking.
What's standard in your retainer agreements?
5. Anything else in here I should be paying
attention to that I missed?
Context: I'm an AI automation contractor.
No-code builder. This is my largest client to date.
The relationship is strong. I want to push back
fairly without damaging what we've built.
Appreciate any advice. 🙏
4
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I Need Help From Someone Who's Been Down This Road
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