Macias Gini & O’Connell LLP
Terms and Conditions
I have read the attached Engagement Letter, including these Terms and Conditions, and understand its terms. I am authorized to sign the Engagement Letter on behalf of the party(ies) indicated.
These Terms and Conditions form part of the Engagement Letter under which Macias Gini & O’Connell LLP (MGO) will provide professional services to you (Client), as further described in the Engagement Letter to which this is attached. By signing the Engagement Letter, you agree to be bound by these Terms and Conditions. If you are using the services on behalf of a business, you represent, warrant, and agree that you have the authority to bind that business or entity to these terms and any policies referenced herein, including but not limited to those terms that limit MGO’s liability, and require mediation and/or arbitration for potential legal disputes.
1. Dispute Resolution and Time Limitation on Claims
If any dispute arises among the parties hereto under the Engagement Letter, including these Terms and Conditions, or any claim related to a claim concerning the services provided for under this agreement or the fees charged to the extent they exceed $25,000, the parties agree to discuss the dispute, and, if necessary, to first try in good faith to settle the dispute by mediation administered by the American Arbitration Association (AAA) under its Rules for Professional Accounting and Related Services Disputes, or JAMS, or ADR Services, Inc. (ADR), before filing a complaint or otherwise resorting to litigation or arbitration. The parties further agree the mediation will take place at an AAA or other service provider location in the county in which the MGO office that provided the services under this agreement is located. Each party shall be responsible for its own mediation expenses, and shall share equally in the mediator’s fees and expenses.
The arbitrators will be bound to adjudicate all disputes in accordance with the laws of the State of [state]. The award rendered by the arbitrators will be in writing with written findings of fact and shall be final and binding on all Parties, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Except by written consent of the Parties, no arbitration arising out of or relating to this Agreement or the parties’ dealings may include, by consolidation, joinder or in any other manner, any person or entity not a Party to the Agreement under which such arbitration arises. The arbitration agreement herein among the Parties will be specifically enforceable under applicable law in any court having jurisdiction thereof. Neither Party will appeal such award nor seek review, modification, or vacation of such award in any court or regulatory agency.
You and MGO agree that any dispute over fees charged by MGO, but only if the disputed fees are in excess of $25,000, which cannot be resolved through the mediation process described above, will be submitted for resolution by arbitration in accordance with the Rules for Professional Accounting and Related Services Disputes of the AAA, or JAMS or ADR, except that under all circumstances the arbitrator must follow the laws of the State in which the MGO office that provided the services under this agreement is located. The parties may mutually agree to an alternative arbitration service provider (e.g., JAMS or ADR), subject to the same requirements as those provided for at the AAA. Such arbitration shall be binding and final. THE PARTIES UNDERSTAND THAT, BY AGREEING TO ARBITRATE ALL FEE DISPUTES, EACH PARTY IS GIVING UP THE RIGHT TO HAVE THE DISPUTE DECIDED IN A COURT OF LAW BY A JUDGE OR JURY OR COURT TRIAL AND INSTEAD ARE ACCEPTING THE USE OF BINDING, NON-JUDICIAL ARBITRATION FOR RESOLUTION. Each party will bear its own costs of arbitration and both parties shall share equally the costs of the arbitrator(s).
If the parties cannot resolve their dispute, excluding any dispute over fees, through mediation, either party may pursue action in a State Court of competent jurisdiction in which the MGO office that provided the services under this Engagement Letter is located. Each party agrees that notwithstanding any applicable statute of limitations, any claim arising out of or related to this Engagement Letter must be filed within one (1) year after the party first knows of or has reason to know the facts underlying its claim or within two (2) years following the completion of the services provided for under this agreement, whichever is shorter. This paragraph may shorten, but in no event extend, any period of limitation an actions otherwise provided by applicable law.
2. Limitation on Damages and Liability
Unless otherwise prohibited by law or applicable professional standard, you agree that MGO and its personnel shall not be liable to you for any claims, liabilities, or expenses, whether in contract, in tort, at law, or in equity, arising out of or relating to MGO’s failure to meet its obligations under this Engagement Letter, for an aggregate amount in excess of the amount of MGO’s fees actually paid to it under this Engagement Letter. Unless otherwise prohibited by law or applicable professional standard, in no event shall MGO or its personnel be liable for loss of profits, business opportunity, or any consequential, special, indirect, incidental, punitive, or exemplary damages relating to this engagement. It is acknowledged by the parties that the provisions of this Engagement Letter agreement, including the limitation on damages, have been negotiated at arms’ length. This limitation on damages provision shall apply to the fullest extent of the law.
We rely in good faith on all information, assumptions, procedures and decisions communicated to us by you, your employees or your representatives, and we will not be responsible for any loss or other obligation arising from our reliance. Furthermore, the procedures we will perform in our engagement will be heavily influenced by, and dependent upon the written and oral representations and information that we receive from you. You agree that you are responsible for the accuracy and completeness of the representations and information provided to us by your employees, representatives and management, and you acknowledge that we may rely on the [Client] to ensure the accuracy and completeness of the representations and information we receive from its employees, representatives and management. In view of the foregoing, [Client or you] agree(s) to release, hold harmless, indemnify and defend MGO, its partners and personnel from any claims, costs (including attorneys’ fees), losses, damages, liability, judgments, awards and settlements related to, arising out of, or resulting from misrepresentations, whether false, misleading, or incomplete information provided to us during our engagement by any of your employees, representatives or members of your management, whether or not such representations were intentional or authorized by you, except to the extent it is finally judicially determined that a claim, cost, loss, damage, liability, judgment, award or settlement was the result of fraud or intentional misconduct, or violation of statutory law, on the part of MGO. This provision shall survive the termination of this agreement and the completion of our services.
3. Governing Law, Jurisdiction, and Severability
This agreement and its terms shall be governed by, and construed in accordance with, the laws of the State in which the MGO office that provided the services under this Engagement Letter is located. More specifically, the parties agree to the personal jurisdiction by and venue in the state and federal courts in the county in which the MGO office that provided the service is located.] The parties agree to this choice of law and jurisdiction, and waive any defense based upon an inconvenient forum. This term will be enforced to the fullest extent permitted by applicable law. If any provision of this Engagement Letter, including these Terms and Conditions, is found by the court of competent jurisdiction to be unenforceable, such provision shall not affect the other provisions. However, such unenforceable provision shall be deemed modified to the extent necessary to render it enforceable, preserving to the fullest extent permissible the intent of the parties set forth in this agreement.
4. Subpoena and Other Release of Documents
As a result of our services to you, we may be required or requested to provide information, testimony, or documents to you or a third-party pursuant to a subpoena, court order or other administrative or legal process in connection with governmental regulations or activities, or a legal, arbitration or administrative proceeding, in which we are not a party. You agree that our efforts in complying with such requests or demands will be deemed a part of this engagement and MGO shall be entitled to additional compensation, and not limited to the budgeted or estimated fees and costs for the services provided for under the Engagement Letter, for our time and reimbursement for our out-of-pocket expenditures (including legal fees) in complying with such request or demand.
5. Use of Electronic Communication and Cloud-based Computing
In the performance of our professional services, we may communicate with each other and/or with others via email transmission. As emails can be intercepted and read, disclosed, or otherwise used by an unintended third party, we cannot guarantee that such email communication will be properly delivered and read only by the addressee. While we will use our best efforts to keep such communications secure in accordance with our obligations under applicable laws and professional standards, you recognize and accept that we have no control over the unauthorized interception of these communications once they have been sent. Therefore, you hereby waive any liability whatsoever for any unintended interception or unintentional disclosure of email transmissions in connection with the performance of our professional services. MGO uses cloud-based computing services, including the storage of data and files, at third party, offsite, secure facilities. In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email transmissions and cloud-based computing, including any direct or indirect damages that may result from any inadvertent or unanticipated disclosure of confidential or proprietary information, or disclosure through third party criminal conduct (e.g., hackers or hacking activities).
6. Privacy Policy
You are aware of, have had an opportunity to review, and consent to, MGO’s Online Privacy Policy, which in compliance with the California Consumer Protection Act explains how MGO collects, uses, and protects personal information you provide to MGO, and explains your rights related thereto. MGO’s Privacy policy also is in compliance with all applicable federal, state and local privacy and consumer protection laws and regulations. This is a link to MGO’s Privacy Policy: https://www.mgocpa.com/privacy
7. Independence
If applicable to you and the services to be provided to you pursuant to the Engagement Letter, professional and certain regulatory standards require us to be independent, in both fact and appearance, with respect to the client in the performance of our services. Any discussions that your representatives have with professional personnel of MGO regarding employment could pose a threat to our independence. Moreover, if applicable, SEC rules could cause us not to be independent of the client if, within a restricted period, you were to hire, in a financial reporting oversight role, one of the engagement team members currently or previously assigned to the audit. This may include not only current employees of MGO, but also former employees and employees of other firms who work under our direction.] Therefore, you agree to inform us prior to any such discussions so that we can implement appropriate safeguards to maintain our independence.
Moreover, to the extent that you have engaged a company affiliated with MGO to provide services related to your efforts to identify, interview, and hire officers, directors, or management, or related human resource efforts on your behalf, you agree to inform MGO so that MGO can evaluate whether there are any potential or actual independence considerations that may preclude, or otherwise limit the services MGO is able to perform. Therefore, you agree to inform us prior to any such discussions so that we can implement appropriate safeguards to maintain our independence.
If we provide both attest and non-attest services to you, then in order to maintain our independence, you assume all management responsibilities for any non-attest services that we provide as part of the Services. You will designate a qualified individual with suitable skill, knowledge, or experience, from your senior management to oversee the non-attest services, evaluate the adequacy and results of the non-attest services, and accept responsibility for such services.
8. Hiring of MGO Personnel
If you hire one of our personnel directly from MGO during the performance of our services or within ninety (90) days after the completion of our services, where this is not prohibited by the SEC rules, if applicable, you agree to pay us a fee of Twenty-Five Percent (25%) of that individual’s base compensation within sixty (60) days from the first day of employment.
9. Billing Policy
Each invoice is due and payable upon presentation and becomes past due after 30 days. An administrative charge of 1.5% per month may be charged on the unpaid balance outstanding over sixty (60) days past due.
10. Termination of Services and Withdrawal
We may terminate this agreement and withdraw from providing further services, I (a) any invoice become delinquent; (b) we become aware of any criminal, fraudulent, or similar acts by you or your management, the Client, or its management is accused of or becomes the subject of an investigation by any governmental entity of criminal fraudulent or similar acts which causes us to have reasonable doubt as to the integrity of the Client or management; (c) you fail to provide us with information we request; (d) you cause a substantial delay in our engagement work or we are unable to complete the engagement or are unable to form an opinion for reasons beyond our control; (e) you violate any of the terms of this agreement or the Engagement Letter; or (f) we are no longer able to satisfy our professional obligations regarding independence or conflicts of interest, or pursuant to applicable professional standards, or statutes. If we withdraw for any reasons, you agree to pay all of our fees for work performed and expenses incurred through the effective date of our withdrawal.
11. Force Majeure
MGO shall not be liable for breach of this agreement or the Engagement Letter caused by circumstances beyond our reasonable control, including but not limited to the Client’s unwillingness, or failure to provide information necessary for the services to be completed.
12. Assignment
The Client shall not assign any rights, obligations or claims relating to this agreement or the Engagement Letter.
13. Independent Contractor
The services MGO provides to you are that of any independent contractor, and not as your employee, agent, partner, joint venture, or otherwise. Neither you nor we have a right, power, or authority to bind the other.
14. General Provisions
Client and MGO acknowledge and agree that all prior understandings, representations, and agreements heretofore made or reached by them are merged into this agreement, which alone fully and completely expresses their agreement. Any such prior understandings, representations and agreements are void and nonactionable. This agreement may be amended or modified only by a written agreement signed by you and MGO. In the event that there is a conflict between these Terms and Conditions and the Engagement Letter, the terms of the Engagement Letter shall control.
This agreement is a private agreement that has been specifically tailored to the interests of you and MGO in the transaction and subject matter it addresses, and it does not, and is not intended to contemplate, touch upon or affect the general public or matters of public interest or necessity. You and MGO have the right and the opportunity to review, revise, and consult with counsel concerning the provisions of this agreement, and it is acknowledged that both parties possess relatively equal capacity and resources to negotiate and bargain for the provisions contained in this agreement. It is further acknowledged that neither party has control over the property, interests or rights of the other, and that no fiduciary relationship exists between them.
Because both parties have had the right to review and revise this agreement, the rule of construction that any ambiguities are to be construed against the drafting party shall not be employed in interpreting this agreement. To the extent any provision or term of this agreement is held unenforceable, the remaining terms and provisions shall remain in full force and effect, and enforceable.
This agreement may be executed in several counterparts which, when taken together, shall constitute the entire agreement. A facsimile or electronic signature shall be treated as an original signature, provided that the party providing the facsimile or electronic signature shall be responsible for obtaining an ink signature that will be provided to the other party(ies) immediately upon request.
15. Confidentiality
We may from time to time and depending on the circumstances and nature of the services we are providing, share your confidential information with third-party service providers, some of whom may be cloud-based, but we remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In addition, we will secure confidentiality terms with all service providers to maintain the confidentiality of your information and will take reasonable precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we are unable to secure appropriate confidentiality terms with a third-party service provider, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. Although we will use our best efforts to make the sharing of your information with such third parties secure from unauthorized access, no completely secure system for electronic data transfer exists. As such, by your signature below, you understand that the firm makes no warranty, expressed or implied, on the security of electronic data transfers.
16. Arbitration
In the event our firm or any of its employees or agents is called as a witness or requested to provide any information whether oral, written or electronic in any judicial, quasi-judicial, or administrative hearing or trial regarding information or communications that you have provided to this firm, or to provide any documents and workpapers prepared by MGO in accordance with the terms of this agreement, you agree to pay any and all reasonable expenses including fees and costs for our time at the rates specified above, as well as any legal or other fees that we incur as a result of such appearance or production of documents.
If any dispute arises between us, we agree to try first in good faith to settle the dispute by mediation administered by the American Arbitration Association (AAA) (or other association) under its Rules for Professional Accounting and Related Services Disputes. All unresolved disputes shall then be decided by final and binding arbitration in accordance with the Rules for Professional Accounting and Related Services Disputes of the AAA. Fees charged by any mediators, arbitrators, or the AAA shall be shared equally by all parties.
IN AGREEING TO ARBITRATION, WE BOTH ACKNOWLEDGE THAT IN THE EVENT OF A DISPUTE EACH OF US IS GIVING UP THE RIGHT TO HAVE THE DISPUTE DECIDED IN A COURT OF LAW BEFORE A JUDGE OR JURY AND INSTEAD WE ARE ACCEPTING THE USE OF ARBITRATION FOR RESOLUTION.
It is our policy to keep records related to this engagement for seven (7) years. However, MGO does not keep any original client records, so we will return those to you at the completion of the services rendered under this engagement. It is your responsibility to retain and protect your records (which includes any work product we provide to you as well as any records that we return) for possible future use, including potential examination by any government or regulatory agencies. MGO does not accept responsibility for hosting client information; therefore, you have the sole responsibility for ensuring you retain and maintain in your possession all your financial and non-financial information, data and records.
Because of the importance of oral and written representations to the effective performance of our services, the client releases and indemnifies our firm and its personnel from any and all claims, liabilities, costs and expenses attributable to any misrepresentation by you and your representatives.
Our fees and costs will be billed monthly, and invoices are payable upon presentation. Invoices that are unpaid 30 days past the invoice date are deemed delinquent. We reserve the right to suspend our services, withhold delivery of any deliverables, or withdraw from this engagement entirely if any of our invoices are delinquent. If work has been suspended due to unpaid balances due, we reserve the right to not resume work until your account has been paid in full. We have the right to withdraw from this engagement, at our discretion, if you do not provide us with information that we request in a timely manner, refuse to cooperate with our reasonable requests, or misrepresent any facts. If we withdraw, it will constitute a completion of our services for this engagement. You agree to release us at the time of our withdrawal from any obligation to complete your return and to compensate us for any time and out-of-pocket expenses that we have incurred through the date of withdrawal. If any collection action is required to collect unpaid balances due to us, you agree to reimburse us for all our costs of collection, including without limitation, attorneys’ fees.
By your signature in the engagement letter, you acknowledge and agree that upon the expiration of the seven-year period, MGO shall be free to destroy our records related to this engagement.
Macias Gini & O’Connell LLP
General Instructions to Terms and Conditions
Engagement letters for all non-attest services of $25,000 or less may exclude the firm’s standard Terms and Conditions. Please also see General Instructions below.
Existing Clients:
Many governmental entities have pre-established contract provisions; therefore, such agencies may not accept any additional terms and conditions or may not accept the Terms and Conditions as written herein. Nongovernmental entities may also not agree to our standard Terms and Conditions. When a client does not want to include or would like to modify any section of the Terms and Conditions as written herein, the Engagement Partner should prepare a memorandum summarizing the suggested changes and provide a copy to the Office Managing Partner for review and approval. The engagement partner will document the conclusion in the work papers and provide a copy of the memorandum to the Chief Risk Officer (CRO). The IT Department will maintain a repository for all Engagement Letters and also a master list of contracts that do not include the standard Terms and Conditions or have modifications thereto. It shall be the OMP’s responsibility to tag Engagement Letters with non-conforming Terms & Conditions, including the related Memorandum, to IT for inclusion in the repository.
The Engagement Partner should carefully evaluate any pre-established contract provisions that attempt to include indemnity provisions, particularly indemnity provisions seeking to require an auditor to agree to indemnify an attest client related to an attest’s client’s conduct. There may be an issue of independence (e.g. AICPA, ET 1.228.020.01)
Proposals:
An entity may provide an example of a pre-established standard contract in a Request for Proposal (RFP) and request that the proposer provide either an affirmative statement in the proposal that the proposer will accept the terms and conditions of the contract or request that the proposer provide suggested alternative language to the sample contract in its proposal. Under these circumstances, as provided for in the RFP, the proposal partner should: (1) submit a written inquiry about changes to the standard contract; (2) inquire at a bidders’ conference; and/or (3) include our suggested contract provisions in the proposal. Based on the prospective client’s responses, we should follow the resolution protocol above.