The Importance of Contracts
When you are doing contract work as a Creative, you always need to have a written agreement between yourself and the client that stipulates the terms under which the work is to be carried out. This basically substitutes for an employment contract.
If you do not have such a contract, agreed upon and signed prior to the work commencing, it is very hard for you to argue any terms and conditions after the fact. The client can basically just argue that “this is not what we agreed upon” – and they’d be right. That doesn’t necessarily mean you wouldn’t ever be entitled to those terms, it simply means you never agreed on them; you basically don’t have a legally binding agreement of anything. It is also hard to change the terms of a contract after it has been signed.
Remember that there doesn’t necessarily have to be malicious intent for contractual disputes to become unpleasant, given that both parties have both time and money invested. In your case, being faced with a contractual dispute can be devastating since you have at that point already put in some effort. Any additional wranglings past that date becomes a lose-lose situation.
For that reason, it is a good business practice to write your proposals so that they have a signatory clause where the parties confirm their intent in a legally binding way (by adding their signatures), and also add a clause of terms and conditions. These don’t have to be super complex or written in a particularly fanciful language, but you need to at least include the following:
1. When the terms of the contract begin to take effect, and when they end (if they do). This should also include an expiration date for the proposal itself, so that the client cannot delay the project start indefinitely, and still expect you to commit to the same timeline and cost.
2. How disputes and modifications to the contract should be resolved. It’s OK to leave certain things open for later definition, but you need to establish clear boundaries around such things (so as to avoid loopholes), and make it easy to add in the specifications later. You should always avoid writing in generalities such as ”TBD”, since those are open to interpretation. If you do not specify what it is that is ”to be determined”, the client may well turn out to have a differing opinion on it. Such disputes need to be negotiated and resolved based on an agreed-upon process.
3. The specific work that the contract covers, both in terms of hours, due dates, named resources (who will be doing the work) and actual output. If you fail to include this, you are allowing the client a lot of loopholes in what they expect to receive from you. If you write your proposals with a reasonable level of detail, that should be sufficient both for your own delimitation purposes, as well as for the client to feel comfortable. If the client is specifically asking for multiple options of something, those need to be defined and limited. You should assign a cost to each additional option.
4. What the cost is, and how and when you expect to be paid. Also make sure to include a late fee clause, just to make sure the client understands that you are not a bank – you are not lending them your time and talents, you are selling them. If it is difficult for you to define the work in quantifiable measures, you can always suggest to have the work be gauged in terms of hours spent: either as a defined number of man-hours at a fixed price, or as a running tally at an hourly rate. Should the client not want to agree to this, you will need for them to specify exactly what it is that they are willing to pay for. Some types of work are so complex that the definition of the work itself becomes part of the work, and that is a consulting service you’re entitled to be paid for.
5. How many rounds of revisions you are committing to, and what happens if the client goes beyond that. If you fail to stipulate this, the client could continue to demand revisions indefinitely. At least state that there is an incremental cost associated with each additional round of revisions beyond what you commit to covering. It is also a good idea to specify how and when you wish to receive feedback. It can become very time consuming to try and consolidate feedback offered by different people in different channels, especially if the feedback is also contradictory. In addition, you need to ensure that the client won’t hold you accountable for delays caused by inefficiencies on the client’s end. It is in your best interests to only accept feedback from one assigned point-of-contact. You should ensure that the client does their due diligence, consolidates the feedback on their end, and articulates it in actionable statements. A question does not constitute feedback; it requires follow-up and a resolution, which takes time and may introduce so-called scope creep.
6. A clause describing the ownership rights to the materials. If the client is buying the rights from you to do whatever they please with the materials, the contract needs to specify this, OR lock down if there are exceptions (additional print runs, usages, applications, selling of the materials to others, etc). You should also specify if you wish to exempt the source files, because if you sign those away, the client can make you redundant. It is fair to ask for additional compensation for that.
As a Creative, it is important for you to safeguard your own time and effort – your chief currency in this type of work. You also owe it to your clients to be clear about the terms under which you agree to work for them, and ensure that you are serious about maintaining a proper and honest relationship that is founded upon good business practices.
A contract doesn’t need to be onerous or imply distrust, it’s just a way to be clear and concise so that potentially costly misunderstandings can be avoided.