In the discussion for one of my other articles here on 1WD, someone asked about contracts and I thought this would be a good time to discuss them. So What’s the easiest way to get burned by a client? Not having a contract. Contracts are one of the most vital and misunderstood tools of the freelancers arsenal. Here in the fourth installment of the Client Tactics Series, we will look at contracts between a freelancer and his clients.
First, A Nightmare Story
Meet Jim. Jim is a freelance web developer. He has been freelancing for about six months or so and just landed a new client: Rapid-Rabbitz. Every client Jim has had up until this point have been “okay” clients. After several weeks of changes and dozens of revisions, Jim delivers his newest site to Rapid-Rabbitz. Then the unthinkable happens, they stop returning his calls, emails, and the owner railroads him when he stops by their office. They are even using his finished site without paying him! Jim didn’t get a deposit and never made them sign a contract. So now what is Jim to do? Since he didn’t utilize a contract there is no paperwork documenting the working agreement, Jim will have a hard time proving the agreement’s stipulations in court as it is his word against Rapid-Rabbitz. Jim is up the proverbial river without a paddle. This would have been different had he had the client sign a contract.
Why Do I Need A Contract?
Contracts act as a written agreement between the freelancer and the client. If one party or the other, doesn’t live up to their end of the agreement then the offended party can seek retribution as defined in the contract. It defines the entire tone and friendliness level of the project and relationship. The contract also serves as a check and balance system with problem clients. Better yet, a Deadbeat Client usually won’t sign a contract. Basically one could look it like “Client Insurance”. The contract insures that client will behave during the project by providing all that is asked of them and insures that the freelancer will behave by producing the contracted work within the time frame agreed upon.
Why Does the Client Need A Contract?
The contract gives the client a little breathing room. The client doesn’t truly know the freelancer from Adam or Eve. Usually a freelance job is gained from a job board, craigslist, or something similar. The contract guarantees that their time sensitive project will be completed as long as they live up to their end of the deal. While the client may feel more comfortable with a freelancer that’s been referred to them, a contract gives them the piece of mind that the freelancer isn’t a crook but a business professional just like themselves.
Essential Parts Of A Contract.
Every contract can be different but all contracts should include these sections. I can’t stress this point enough, put everything in a contract. Some of the sections below may seem like common knowledge but remember what may seem obvious to you, the awesome freelancer, may be ‘gibberish’ or understood another way by the client. By laying it all in writing, it puts the freelancer and the client on the same page.
This part of the contract states that the project starts on the commencement date and ends on the termination date. By having a defined start and ending date, this will limit the possibility of ‘feature creep’.
Provision of services
This part of the contract states that the freelancer will provide services and possibly products to the client during the specified time frame of the project. This section just explains what the freelancer is agreeing to do for the client. The actual list of services and products will be laid out in the schedule or phase section of the contract..
This is the part of the contract that lays out the compensation that the client will pay the freelancer and how the payment will be broken up. Remember to require a deposit or retainer payment.
This section of the contract explains that the freelancer will invoice the client during each phase of the project. The fees included can be for services, products, or professional fees. The time frame in which you expect your payment would also be included in this section. Example of this would be: “Client must pay invoice within 30 days of receipt.”. It also needs to explicitly say that the client agrees to pay within the agreed time frame. It should also state what happens when the client doesn’t pay. Please do not include the phrase “My cousin Bruno will come break your legs and ‘borrow’ your moped”. Threats don’t work well in contracts, but do include the amount of interest you’ll tack on every month that the client doesn’t pay. I also include an early payment bonus on my contract, I knock off 2% if paid within two days of the invoiced date.
The Client’s Obligations
This section of the contract explains what the client must provide in order for the freelancer to do the job agreed upon. Spell out everything that client must do and state that it all comes at no cost to the freelancer.
This section explains that either party can terminate the remainder of the contract at any time if there is a breach in the contract and that breach isn’t mended within a defined and agreed upon timeframe. This is sometimes called a walk-away or escape clause.
Warranties and indemnities
This section explains that any claims the freelancer said or implied are not valid unless backed up by written documentation. This part isn’t here to be shady, it just protects the freelancer against what was said by the freelancer and misunderstood by the client.
Intellectual Property and Confidentiality
This section states that the freelancer transfers what rights of the design to the client. Usually that just means that the pictures, that were the client’s pictures to begin with are still their property and any graphics or logos the freelancer made are theirs to do with what will. Sometimes the client will want your source files but that’s another rant for a different day. This section would also state that any confidential information that the client provided you in order to complete the project would be returned to the client upon request.
Did this give you a headache? I hope not. There’s still more contract talk to do. I thought I would break this article into a couple of parts to make it go down a little smoother and not put you to sleep. Next week we will talk about what goes into defining the schedules or design/payment phases and using ready-made contracts. Got any questions? Leave me a comment and I’ll address your questions there.