When you’re working with clients, client contracts are an essential element determining your success. Whether you’re a freelancer or an agency where clients are the main source of revenue, a clear, well-written contract spells out the rights and responsibilities of each party to reduce conflict and ensure everyone is clear on timelines, costs, and other key elements. A contract helps guarantee you get paid as expected while ensuring your client is clear on the outcomes. Writing a client contract often varies for each client to ensure they meet the specific needs of each client so you need an underlying element used in each contract along with specific elements designed around individual client needs.
All of this should make sense, but understanding what to put in your client contract helps avoid problems implementing the contract over the life of the association. A client contract isn’t designed to create traps and pitfalls, it’s designed to protect and secure by explicitly layout expectations and outcomes.
Writing great client contracts
Crafting an outline used to oversee the creation of all client contracts is the first step. Elements you might include in your contract are:
- An overview of the scope of work and expectations
- Costs and payment options, timelines, confidentiality, and intellectual property (for instance, who retains ownership of the website, social platforms, etc)
- Specific tactics, KPIs (key performance indicators), and outcomes
- Legal issues such as termination and dispute resolution
- Key personnel involved in the contract
Once you have a complete contract designed to meet the needs of a specific client, you can make life easy for clients as we move to remote, digital spaces and ask them to sign PDF online so that there are no delays with their contract moving forward.
Elements of client contracts
I normally write this element of the contract last as it provides an abstract containing key elements from the entire contract.
For me, developing the costs is really hard as you want your costs to fit with the tasks planned and charges from competing businesses. One thing I learned the hard way is that charging very low prices results in more problems than just revenue. I find, in my somewhat limited experience, that clients who get a deal with low prices are often the hardest ones to deal with–they expect more and interfere more with implementing tactics you, as the expert, know are best for them. My best client was one who seriously overpaid for my services and decided, after paying me, that they didn’t need me to complete all the projects laid out in the contract.
Because it’s difficult to judge the quality of consulting services, often price acts as a surrogate for quality. Hence, charging a low fee translates into a poor evaluation of your reputation. It also explains why firms charging low prices get clients who don’t trust them and are more difficult to please. In terms of payment, I always require clients to pay some of the costs upfront as I have periodic problems collecting fees from clients.
Timelines are another area that’s challenging as you need to allow sufficient time for successfully completing a project, allowing time for problems and client approval delays. Set up that schedule and make it as clear as possible on your contract and then make sure that you meet all of your suggested milestones. You need to have that clarity for you as much as you do the client, and you are going to find that you can make a massive difference to the way in which your clients feel about working with you when you are clear.
In terms of confidentiality, you must ensure you protect clients’ confidential information so I have everyone working on a team sign a confidentiality agreement.
One of the problems I find many clients face is they don’t have access to their website, social media accounts, etc. I always ensure clients retain their intellectual property by sharing ownership with all their digital profiles, etc.
Tasks, KPIs, etc
I set up a list of specific tasks that fit the specific needs of a client, for instance, creating and implementing a content calendar or building a new website. For each task, I ensure they recognize how that task solves their problems and KPI metrics used to evaluate performance. This is usually the longest portion of client contracts as I go into great detail regarding each task we propose.
You want to create a contract that works for both you and your clients, and with the tips we’ve got for you below, you can have a contract that makes sense for everyone from a legal standpoint.
- Always include contact information for both your business and your client’s. If you’re putting together contracts, they should contain sufficient information from both parties if you want a legally binding contract. You should have names, numbers, addresses (both billing and physical) and you must use your legal business name for both parties. Don’t be generic in how you address the client, either, as that makes it more impersonal to them. That’s not going to affect the legality, it’s just bad manners.
- Be specific about the project and expectations. A good contract has clarity. Think less jargon more specificity. If you have a project proposed, you need to think about what responsibilities for both parties to make this project happen. Outline it all in your contract for them to read over and sign.
- Make the payment terms rock solid. This is always the hardest thing to get through in a contract as you need revenue – and deserve payment, in fact, which means that you need to consider how your payment terms come across. Are they fair? Are they honest? Are they clear so that the client knows the expectations if they choose not to pay for your services? Establish these early on and make sure that you get their signature and agreement on everything.
- Outline a schedule and timeline of work planned as well as when payments are due as you progress through the project.
- A cancelation clause is an important legal aspect of your contract since clients sometimes need assurances that they can cancel the contract if there are serious disputes.
Key personnel involved
A contract should demonstrate the competencies of the key employees used to reach each client’s needs.
Creating strong client contracts is both a selling tactic as well as protecting your business from a legal perspective. For the client, a contract establishes the scope of work, KPIs, and makes them feel comfortable that your firm has the ability to satisfy their problems.
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