If there’s one idea drilled into every freelancer or entrepreneur’s head from the start, it’s that you must have an ironclad contract for every project. But what if a client agreement doesn’t need to be a big, scary thing?
While it’s true client agreements are inherently legal documents, the belief that all contracts must be long, convoluted, and full of “legalese” has caused more harm than good.
Because, really, your contract isn’t doing its job if it takes a licensed lawyer to understand. And if you don’t know what’s in your contract, then your client is probably left even further in the dark.
So, rather than download a random client agreement from the internet or try and impersonate a T.V. lawyer, why not get real about drafting your freelance contract? Here’s how.
Contract vs. Client Agreement: What’s the Difference?
Before sitting down to create one of your own, it’s important to distinguish between an agreement and a contract.
Or, more accurately, to acknowledge the lack of clear distinction between the two.
There is really no technical difference between a contract and a client agreement. They both contain guidelines and clauses stating how business will be conducted between two parties.
In practice, “contract” and “agreement” will sometimes refer to slightly different things. For example, a “contract” may refer to a more rigid and legally binding document than an “agreement.”
For the sake of this writing, however, we’re treating them as two words for the same thing. An “agreement” is more-or-less just another term for a “contract” and vice-versa.
8 Items to Include in Every Client Agreement
Again, a client agreement doesn’t need to be complicated to be effective. However, there are some things that every good contract should include.
On the other hand, you don’t want to add anything to your agreement that you don’t entirely understand for yourself.
Even if you consult the help of a trusted lawyer to draft an agreement, make sure the final document is written in plain, easy-to-understand English.
Again, if you don’t understand it, neither will your client.
1. Identifying information for all parties
Before anything else, a well-drafted client agreement should provide details of the participating parties.
Without this information, there’s no proof of who, if anyone, has agreed to the contract’s terms.
Generally, you’ll want to include the legal name of both yourself (or, if applicable, your business) and your client. It’s also good practice to include contact information, including permanent addresses, whenever possible.
2. Project scope and details
The second most important item in a client agreement is the project scope. Unfortunately, it’s also one of the most overlooked by freelancers drafting their first contracts.
What is a project scope? Basically, it’s a description of everything you agree to do for your client, from beginning to end.
When it comes to legal protection, the more detailed your project scope, the better. If you aren’t explicitly clear about what you will and will not be doing for your client, then things can get tricky when a client claims you didn’t deliver everything promised.
Failing to provide a detailed project scope can also leave your client confused about what to expect for your services.
Whatever your industry, you should prioritize a clear, detailed project scope in every client agreement.
3. Work agreement
It’s generally a good idea to include a brief section in your client agreement that describes the working relationship between you and the client.
All you need to include is a short explanation about how your are working under contract, are not an employee, and will not receive benefits.
This might seem redundant, and in many cases, it is. But it’s always better to be safe than sorry (and your client will appreciate the extra coverage).
4. Schedule, deadlines, and penalties
But you’re not just accountable for what you do for a client. You’re also accountable for when you do it.
When drafting your client agreement, you need to include clear details regarding when each part of the project is due.
But these deadlines don’t just apply to you.
If you must receive approval or outside information from your client to complete the project, include deadlines for these steps as well. If you don’t, you could find yourself missing your own deadlines because your client failed to respond in a timely manner.
Some freelancers will even impose fees when clients miss or ignore these turnaround times. But if your don’t include these expectations and penalties in your agreement, you won’t be able to enforce them when the time comes.
5. Payment terms
Unless you’re completing work for a charity or other non-profit organization (yes, you should still draft a client agreement for good measure), then you won’t want to forget the payment details when writing up your contract.
Don’t limit your payment terms to just the amount due from your client.
Other important details you may want to include are your invoicing and payment schedule, late fees, early payment discounts, and even your accepted payment methods.
6. Usage rights
Do you provide your clients with a final deliverable at the end of each contract? If so, outlining the usage rights at completion is a must.
In most cases, your client will retain full usage rights at the end of a project. Even if this is a given, including it in your client agreement will help cover all of your bases.
But if you will retain some or all usage rights at the end of the contract, put those rights down in writing.
This is also a great time to outline whether you will or will not be allowed to use the final product in your professional portfolio.
7. Cancellation policy
Even the best client relationships don’t pan out perfectly every time. For these scenarios, you want to have a detailed cancellation policy included in your agreement.
Hopefully, you’ll never need to use this section. If you do, however, it will be an invaluable addition.
Again, this part of your contract isn’t just for your client’s sake. There may be times when you need to walk away from a project, and having a cancellation agreement in place will make the whole process go much smoother.
Many entrepreneurs recommend including a “kill fee” in your contract, as well.
In essence, this is a notable fee clients can pay to get out of the contract when there are no terms being breached. By charging this fee, you still get paid for your time while also letting your client making the decision that’s right for them.
8. Legal proceedings and conduct
For the most thorough client agreement possible, consider adding details about how any legal disputes will be settled between you and the client.
In most cases, you can choose where such disputes will be settled. Or, you can opt for arbitration rather than going through with court proceedings.
Of course, don’t go through the trouble of adding these terms to your contract just because you can. But if you have a preference for settling legal disputes in one district over another, or know that arbitration is your preferred settlement route, it’s best to include these terms whenever possible.
When Your Client Has a Contract of Their Own
In many cases, especially with bigger clients, your client will have an agreement of their own for you to sign.
There’s nothing wrong with this. It’s extremely commonplace in certain industries. But don’t go signing one of these contracts until you fully understand what’s contained within.
Sometimes, understanding the terms and clauses in a client’s contract will require hiring a lawyer.
Yes, this is an extra expense you probably aren’t too thrilled about. Trust us, though, because the potential consequences of signing an agreement you don’t understand cost far more than any lawyer’s fee.
Professional Client Agreements for Professional Jobs
Should your client agreement look professional and be easy to understand? Of course. But those traits should apply to more than just your freelance contract.
Your clients want to feel empowered and in-the-know throughout their entire project. Yet if they don’t understand what you’re charging and why, they’re bound to feel confused and even frustrated instead.
With professional-looking invoicing, you can simplify your business finances while instilling confidence in your clients.
Who doesn’t want to create, send, and pay invoices all in one place? With a platform like invoicely, you can do all that and more in less time than it takes to print a paper invoice.
Learn more about creating top-notch invoices and estimates for your freelance business with invoicely.