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Clients

Don’t Get Screwed: The Contract Provisions Every Creative Needs to Know

Our resident legal expert offers 6 things that should be in every contract you write.


A friend of mine, a very kind and trusting person who happens to be a freelance software developer, agreed a few years back to write some code for a young, charismatic pair of startup founders. The job was only supposed to take a month, and he agreed to it on a handshake.

Four months later, the job still wasn’t finished, and my friend still wasn’t paid half of what he was owed. The founders were constantly changing their minds about what they wanted, sending my friend additional “specs” long after he had started the work. Eventually, realizing that he had already spent more time than it was worth, my friend wrote the project off, never collecting the rest of his fee.

Having a contract with the founders about the project probably would have helped things turn out better for my friend. His story is a reminder that while dealing with contracts may not be the most fun aspect of being a freelancer, the pain is nothing compared to what can go wrong without one. And a contract not only protects you if something goes wrong – it helps things from going wrong in the first place by clarifying expectations and preventing misunderstandings.

Putting together a contract can seem intimidating, but it doesn’t have to be. While it would be great to be able to hire an attorney to draft or review every contract, that’s not an affordable option for most people. The good news is that even a basic agreement that you write yourself is better than having no written agreement at all, provided that it’s clear, unambiguous, and covers the essentials of your business arrangement.

Here are a few tips that may help:

1. Clearly define the Scope of Work

As a creative freelancer, you’re probably accustomed to sending clients proposals that scope out your project, including your timeline. It’s not uncommon for clients to simply sign these proposals and send them back, with the proposal itself becoming the contract (or an attachment to the contract).

Regardless of how you format it, your contract should clearly and specifically state what you’re going to do for your client, and when. Err on the side of being more descriptive, not less. You need to not only list what is being delivered, but also its contents and expected delivery dates. For example, if you’re a freelance writer, a Scope of Work that reads “500 word article due in two weeks” is less helpful than one like this:

“Scope of Work: An article, written for a general audience, 500 words long, about emerging trends in mobile phone technology. Due within 10 business days of the signing of this agreement.”

2. Nail down everything related to money

Contract-related disputes almost always come down  to money, so it’s especially important to get this right. It’s not just about specifying how much you’ll be paid. Some other questions to consider:

  • Will you receive a portion of your fees up front?
  • 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?

Here’s an example of a payment provision that addresses these questions:

“Client will pay Designer a fixed fee of $500. Of that fee, $250 is due at the signing of this Agreement. At the completion of the project, Designer will invoice Client for the balance, with payment due within 10 days of the invoice date. Any payment not received by its due date will accrue interest at 1.5% per month. Designer will be solely responsible for her own expenses. If Client cancels the project after Designer has begun work, Designer is immediately entitled to a “kill fee” of $250, less any fees already paid to Designer.”

3. Make sure you’re clear on who will own your work

When you make and sell widgets, there’s no doubt who owns a widget – the customer who buys it. But when you’re a graphic designer who creates logos, or a writer who contributes paid guest posts to a blog, it’s less clear who owns the work and what rights are associated with it. That’s why, especially in contracts for creative work, it’s important to include a clear statement on ownership of work.

Generally, you can go in one of two directions when it comes to the ownership of your work. One option is to “assign” (give) ownership to your client, and the other is to grant your client a license to use the work in certain ways, in which case you retain ownership and control over its use. If you go with a license, then your contract should clearly lay out the license’s terms, which can mean addressing questions like:

  • Where and how can your work be used? For what length of time?
  • Is the license exclusive to this client, or can you license the same work to others?
  • May your client modify your work or create other works based on it?
  • Is the client required to credit you with the work?
  • Will you be paid royalties upon use or sale of the work?

Regardless of whether you license or assign the work, if you plan to use the work yourself, say as part of your portfolio or an exhibition, your contract should clearly specify that. Here’s an example of a very basic assignment provision that does this:

“Designer hereby assigns to Client all right, title and interest in the work produced under this Agreement, except that Author retains display rights in the work, i.e., for use in portfolios, exhibitions and other self-promotion channels.”

4. Address how changes to the project will affect your fees

Even when you’ve clearly defined the scope of work, clients will sometimes change what they originally asked for. This can lead to them expecting you to do additional work for no additional money, a situation where a clear written agreement can really help.  State in your contract that changes to the scope of work will lead to additional fees, the process for doing so, and also how many rounds of revisions, if any, are included in your base fee. You can even specify what you will charge for additional rounds. If you think there’s any room for doubt in your client’s mind about what constitutes a “round” or a “revision,” spell out what those terms mean to you. Here’s a basic example:

“Designer’s Fee includes 1 round of revisions, provided that such revisions do not require work exceeding the Scope of Work as defined in this Agreement. Designer may decline, or charge additionally for, work that Designer reasonably deems to be beyond the Scope of Work.”

5. Be clear that the written agreement is the whole agreement

You want to be clear that the written agreement you have with your client is the last word on the deal that you’ve made. Otherwise, it’s easy for memories to differ on what you actually agreed to (“I thought you promised me over the phone you would also do X as part of this deal.”). This is especially important when you’re doing creative freelance work, because you and your client might brainstorm a number of different ideas before you start the work — and you both need to be certain that the actual project will be limited to what you agreed on in writing.

To address this, you can include in your agreements a provision called a “merger” clause (also sometimes called an “integration” clause).  In its most basic form, a merger clause simply says that the written agreement is the entire agreement between the parties. For example:

“This is the parties’ entire agreement on this matter, superseding all previous negotiations or agreements.”

6. Specify the process for changing the agreement

It’s part of the reality of doing business that sometimes the terms of a deal will need to change after a deal has been signed. People often amend agreements orally, by picking up the phone or talking in person until they come to a new agreement. The problem with oral amendments, though, is that any disagreement over them can quickly devolve into a he-said/she-said argument, because there’s no written record.

A better option is to include in your written agreement a clause saying that changes to the agreement can only be made in writing, with the consent of both parties. A simple version of this would be:

“This Agreement can only be changed by mutual written consent.”

Keep in mind that an exchange of emails can qualify as mutual written consent – as long as it’s clear from the emails that both parties are agreeing to the change. You generally don’t have to sign an amendment unless the contract specifies that you do (i.e., “This Agreement can only be changed by the signed consent of both parties.”)

***

These tips are by no means an exhaustive list of things to include, but they will help you capture the key business terms of a project, which in itself goes a long way to minimizing the chance of a dispute. And, if you do get in a disagreement with your client, don’t panic — you have options.

Remember, when you’re putting an agreement together, your job is to try to look into the future. Think about things that could cause confusion or misunderstanding, or could go wrong, and include language that eliminates the potential for confusion and lays out what will happen when things don’t go as planned.

How about you?

What contract provisions have you used with your clients?

Comments (33)
  • PhilippaWillitts

    This is so important for freelancers, and it’s something a lot of us are guilty of neglecting from time to time.

    • ali

      whats subject ?

      • alibsiid

        cant uunsi?

      • alibsiid

        mnm,k

  • http://programminglife.net/ mcatlett

    Sound advice – a lot of folks forget to go back to basics when they start moonlighting or start up their companies. Just because you have worked with your new clients for years, as most do when they first set out, doesn’t mean that you can go without protecting yourself or clarifying expectations.

  • Karen Smith

    Thank you for sharing. Very good insight, Vinay, and much appreciated.

  • growthguided

    Well done Vinay. I think this is a great reminder for a lot of people. The vitals of contract as easily over-looked when we are in the panic and excitement of the deal.

    Thank you for the reminder

  • Smarty Brain

    very true with the software industry….. just because you can change things easily doesn’t mean you keep changing it….. A human brain is never satisfied so it’s good to have a contract. Great tips🙂.

  • Al Coxe

    One must distinguish as to whether you are consulting or coaching.

  • Todd Anthony

    This is hugely helpful. I just copy/pasted many of these things right into our terms. Thanks Vinay!

  • mxs

    One of the most helpful articles I read on here. Thank you very much

  • guest

    This is an incredible article. I literally, just last week, dealt with this very issue but was lucky to have had the contractor tell me to send over an SOW at the beginning of the project (which I rarely do, as I freelance on the side of a full-time job). This is the SOW I found and edited per my needs: https://www.docracy.com/sign/usedoc?signing=false&docId=3884&versionNum=10 Also, I highly recommend to anybody to add the above in as well, because after reading, there are things that aren’t addressed. This seriously saved my butt with a client that became increasingly demanding and hard to work with that was sending me round after round of edits and was abusing our professional relationship. My only other advice is to stay on top of this and trust your instincts – when your boundaries are being pushed, reread your SOW and restate your rights and what they’ve signed to. You have to reinforce it, and when you do, it will change a sour situation into a decently pleasant one for the remainder of what needs to get done because they’re bound to the contract and you’ve stood your ground.

  • http://rpscom.co.za/ r00ster

    You are a legend Vinay. I can relate to every one of the issues mentioned above. I am altering my terms ASAP.

  • http://www.redbubble.com/people/ddtk Denis Marsili

    Very good article!!! AWESOME REALLY! THANKS! I’ll review my contract template with these tips!

  • darkwingdave

    There’s an awesome video with Mike Monteiro called “F*** You, Pay Me.”, that discusses this in detail and explains the benefit and often necessity of having a lawyer available for client management. I have a friend that just had to cut loose a Client From Hell that she didn’t have a contract for and has now sworn never again. Thanks for the great article Vinay!

  • Stacie

    Great article. I’ve already shared it with a few friends.

  • Mustafa Kulle

    Thank you for this great article.

  • Tanya Marie

    THANKS!!!!

  • Roi Agneta

    Superb article – thank you! We are actually in the midst of a “client from hell” situation that involves something in addition to the points you have made. We include language in our proposals and contracts that addresses the importance of timeliness in communications and how a lack thereof can impact schedules and, potentially, result in additional fees. It is critically important to maintain continuity in creative endeavors – having to shelve a project while you wait for extended periods of time for sign-off on milestones creates scheduling issues and really messes with the creative process.

    • http://www.vinayjain.com/ Vinay Jain

      Roi, thank you and great point — good contracts often include a “Client Responsibilities” section that addresses exactly these sorts of issues. They’ll specify timelines for clients to give required approvals and will also name a single point of contact on the client side so that you as the freelancer don’t get slowed down by decision-by-committee situations.

  • Jerzyk S

    Great article.
    It describes both the importance of having clearly stated the terms &
    conditions for the agreements AS WELL AS the content of the work / delivery.
    In my experience (20+ years of working with IT outsourcing tenders, proposals and transition projects) the devil is, most often, in the delivery descriptions: what does the
    customer really need & what have we promised to deliver. Far too often the customer thinks that they have described exactly what is needed and the provider thinks (or hopes) that they have understood it and have clearly stated their deliveries or scope of work. (Not to talk about the cases a “signature hungry” sales rep (or freelancer) has agreed to deliver what they hope can be delivered).

    SO to add to the article:
    – Make sure you have understood the exact needs and requirements
    – Make sure that you have described exactly what you will deliver (and that you and
    your organization actually can deliver it).

    What to do if the requirements exceed or don’t match what you are comfortable with
    delivering is a whole other matter.

  • http://www.vinayjain.com/ Vinay Jain

    Thanks Michael. Yes, it’s always a good idea for the contract to specify that the freelancer is entitled to fees for work completed at the time of termination, and also possibly some specified amount of “liquidated damages” to compensate for the admin time and opportunity cost. As long as this is framed as compensation and not a penalty, it will generally be enforceable.

  • Pam Brown

    such a good reminder. thank you.

  • lanceral

    A great article which proves why you should engage a lawyer, not do it yourself. For example, note the technical query clause 3 “assignments”: how can you assign all “right title and interest” when you retain a right of user?

  • Andrew Mitton

    It’s a good idea to have a good arbitration provision. Don’t use the American Arbitration Association. They’re too expensive. Include a clear process for selecting the arbitrator. Refer to the arbitration statutes of your state. Also include a section stating that the losing party pays the attorney’s fees and costs for the prevailing party.

  • Ruth Wagner

    Very helpful information. A contract from scratch, consider doing an end run around all the legalese, and write a Letter of Agreement instead. It’s essentially the same item, but in a simpler format.

    Ruth@Digitalsignaturee

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Illustration by Oscar Ramos Orozco.
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