Many people are unrealistic when it comes to creating contracts. The truth is it should not be taken for granted. Disagreements can and do arise especially when money is involved.
A written contract plays a vital role in any business. Contracts state the terms and conditions of any business transaction, either goods or services. Apart from forming a legally binding agreement, contracts can also serve as future references,proof in the event of misunderstandings, complaints or disputes needing litigation. It’s important to have contracts, it’s more important to have clutch contracts [ an iron-clad agreement with no wiggle room for foolery].
Knowing the elements necessary to create an effective contract can help you create a legit contract that protect you and your biz. Below I share five important contract terms to help you protect your business in case something pops off!
Design Details & Timeline
Start the contract by giving an overview of the project and describe the services you will be performing. Your contract should clearly and specifically state what you’re going to do for your client, and when. Err on the side of caution and be more descriptive, not less. If you have provided a written proposal before they chose to you, then note in the contract that “The website/service will be built/based on the specifications detailed in the proposal dated xx/xx/xx.” If there was no formal written proposal, cite “the specifications discussed and mutually agreed upon at your meeting on xx/xx/xx.” It’s also important to note who will be providing the content (the copy and images on the site): the client, yourself, or a copywriter/graphic designer.
It’s always a good idea to determine a set timeline for the project, as it helps ensure both parties stick to deadlines so the project doesn’t drag on. Setting out the details and timeline in the contract further clarifies expectations at the outset. You need to not only list what is being delivered, but also its contents and expected start and end dates. The client knows up front what the final product will be and when they can expect a finished product.
Payment Schedule & Expenses
Most lawsuits and contract-related disputes almost always come down to money, so it’s especially important to make this section clutch! This section should act as an overview for the payment expectations, add-ons and revisions of the project. Most creatives require a non-refundable deposit before the initial work starts, be sure to include this upfront and in bold, and maybe in a larger font…. kidding. Asking for a deposit ensures that you weed out non-serious clients and can prevent last minute cancellations when their money is on the line.
Make it clear to the client that full payment must be made before you will hand over any files to the client. It’s also a good idea to note that if the client doesn’t pay on time, you will suspend the work and withhold any documents until payment is made. This protects you from clients walking away without paying.
It’s not just about specifying how much you’ll be paid. Think about these questions when drafting the payment section:
- What if the client wants to make revisions?
How much are add-on or revisions costs?
What happens if there is a substantial change in the design?
Will you be paid at delivery, according to set milestones, or for your time?
Will there be a “kill fee” or some other compensation for you if the client cancels the project after you’ve started?
Will there be a late fee if your client doesn’t pay on time?
Will you be reimbursed for expenses?
Does the client need to give you 50% up front, with 25% due when the first draft goes out and the remaining 25% when the final goes out?
Do you have to submit an invoice before payment is due?
How many days does the client have to pay after the invoice is submitted?
Does the client pay for any expenses that you incur?
In this section you want to inform your client of their responsibilities throughout the project. You want to outline who and what each party is responsible for (logo, copy, text, fonts, images, graphics, etc). Make sure the client knows that you can only stay within the project timeline if you have all the files, copy and other necessary information. It must be clear that your client understands the need for timely feedback and approval of work. Furthermore, the contract should outline the need for client to ensure all documents, information and feedback is carried out in a timely manner in order for you to stay on schedule.
If you are creating or exchanging something of a creative nature, you need to define who owns the intellectual property that will be created as a result of the contract. Most of the time designer holds ownership and copyright until client makes the final payment and the files are handed over. Then the client holds the copyright.Make sure you tell your clients what they are allowed to do with your work. Furthermore, state clearly what rights you will retain. It is best practice to retain the right to post about the projects on your website, blog, portfolio or other promotional materials. Also, be sure to add a condition stating if a link to your website must be displayed on your site.Other things to consider mentioning:
- Do you want to be able to share samples of your work on your website or for promotional purposes?
Will you allow them to alter your work?
Do you want credit to be given on any promotions where your work is featured?
Are they allowed to alter your work?
Is the client required to credit you with the work?
Will you be paid royalties upon use or sale of the work?
Cancellation & Termination
Unfortunately from time to time you will have a client that backs out on the project, stops responding to emails or quits answering the phone midway through or towards the end of a project. Having a cancellation and termination clause in the event this happens is crucial. Just as deposits help protect you from doing a lot of work and then not being paid for it, a kill fee or cancellation fee serves a similar purpose. The kill fee ensures that you are paid for all work that you have done up to the time that the client notifies you they are not going to continue. Whatever the reason, the kill fee helps cover your billable time and any tangible expenses, such as delivery fees, you incur up to the point of cancellation. Make sure to state your terms to protect yourself and your time. Some things that should be outlined are as follows:
- How payments and remaining balances will be handled, and how the project can be reinstated and what is required.
What will happen if the client cancels the project before its complete?
What if they cancel after all the work has been produced?
Do you request the full amount to be paid anyway as you’ve put in the time?
would you rather charge them based on the percentage of work you’ve completed?
It’s also important to state the opposite if you, the designer, are unable to complete the project and how the client will be compensated.
So there you have it, five areas you need to include in your contracts! Remember to keep it simple, but also keep it clutch!
Disclaimer: I am an attorney, but I am not your attorney. The information in this blog is for general informational purposes only and is not legal advice. This article does not create an attorney-client relationship. The author is not liable for any losses or damages related to actions of failure to act related to the content in this article. If you need specific legal advice, consult with an attorney who specializes in your subject matter and jurisdiction.