Contracts Protect You, Your Business As Well As Your Clients
As a freelancer, there is a direct correlation between time and money. Without being backed by a large company and without company benefits, it is up to you provide for yourself and your family and in addition, build up your retirement, set aside money for emergencies and purchase insurance.
Protecting your time with a well-written and executed contract is arguably more important than your logo, your business cards, your LinkedIn profile and/or your sales funnel. Taking the time (and money for legal counsel fees) to write up a contract for your business use is an important part of your business setup.
Don't ever use free contract templates you find online for your business.
Not getting professional advice about your contracts can have negative consequences for your business. My personal recommendation is to use the checklist below to see if your current contract is missing important pieces and to then retain legal counsel in the country and/or state you reside in to improve your current contracts.
Without a contract, or with a poorly written contract, you leave yourself open to
- non-payment issues
- ‘scope of work‘ conflicts
- client miscommunications
- team disagreements
- reputation concerns
and many other problems.
Here is a checklist of 10 items (freelance) contracts* should have. This is by no means a complete list. This is a guide to use to compare your current contract with, to note what areas you might be missing in your contracts. Use this checklist as a starting point for discussion with your legal counsel.
*note: I’m not a lawyer, so do consult one when you are ready to put together a contract.
1. List Both Parties By Their Business Name In the Contract
Many freelancers operate their business under an LLC. Whatever entity you chose to do business under, when creating a contract, make sure your business name is the correct name listed on the contract. Simultaneously, get the correct name and entity of the business you will be working with. Your client might have an LLC as well, or a corporation. Be aware of people using a DBA (doing business as) name. Always ask for their official business name to avoid this mistake.
Signing a contract as yourself, without an LLC or Corp to protect you, will leave you open to personal liability.
2. Date Your Contracts
Date your contracts and add a ‘valid from x to z' clause. Always add ‘services due date' and execute the contract for 3 months, 6 months or 12 months and then reevaluate the contract with your clients after that set period of time. After 12 months, if confident in your ability to provide value, raise your rates and/or pitch more services to the client before executing the next contract.
By leaving your contract open until eternity, you leave yourself open for long hours of work without a chance of raising your rates.
3. Accurate and Complete Description of Services
Always add the ‘scope of work' to your contract. An easy way to that that is to copy and paste that specific portion of your written proposal right into your contract. Be detailed about services you will provide and, sometimes, more importantly, be detailed about what you will not provide. If you are to manage Facebook, include the tasks you will be doing; ‘Facebook content creation, commenting, engagement, profile updating etc.', and if you were not hired to run ads, include a line that states you are exempt from that task; ‘Facebook ad management not included'.
Without a detailed description of services, you may end up working way more hours than agreed upon and for very little money.
4. Non-Refundable Retainer and Fee Schedule
Add a non-refundable retainer to your contract and get a check/payment for that retainer and first months' work with the signing of the contract. Then layout the fee schedule in your contract and ask for monthly or quarterly payments to be made before the work starts for each period. This should be non-negotiable.
By asking for payment for services rendered up front, you eliminate the need to chase after money. No payment = no work that month.
5. Additional Fees (Hourly Rate)
Adding an ‘additional fees' portion to your contracts allows your clients a preview of how you will bill for work outside the contracted scope of work. It is recommended you insert a high hourly fee in this portion, and include instances you might bill these hours i.e. additional travel time, additional meetings or communication, photography, videography, artwork, printing cost, and clerical work outside the normal scope of work.
Without an additional fees clause, the client might be tempted to abuse your time.
6. Access to Information
Freelancers, more often than not, work from a home office. When you are not working in a physical office with the client, direct access to the client and to their online assets needs to be a priority from day one. Therefore, specify how, when and how frequent communication takes place for the duration of the contract and lay out a plan and timeline for access to logos, pictures and company updates about events, new products, new business relationships etc. The responsibility to provide you access to information lays in the hands of the client; it is up to them to provide these details to you; without accurate information, you can not do your work properly.
Adding this portion to your contract lays the responsibility for clear communication on the shoulders of the business owner.
7. No Guarantees Offered
Social media management is not sales. As you are managing social media platforms, you might or might not be in charge of the landing pages, website, content creating, blog content etc. Unless you are a full-service agency tasked with everything marketing for this specific client, you should not be tempted to offer any sort of guarantee with services rendered. Check with your legal counsel about what this portion should read.
Adding a no guarantee portion allows for no for finger-pointing and takes any excuse for non-payment away from the client.
8. Information Accuracy
This portion of your contract will protect you from your client's mistakes and/or unethical practices. Information and content sent to you by your clients for social media usage should be theirs to use. Period. Educate your clients, yet add ‘Information Accuracy' to your contracts. In case a client takes images from Google, uses images of their customers without written consent, steals them from competitors or uses dealership content they don't have a right to use, you should not be held responsible if you unknowingly used that content on social media.
Without this information accuracy portion of your contract, it will be harder to prove who's at fault in case false or copyrighted information is used.
9. Limitation of Liability
Just as this states, adding a limitation of liability to your contract, will limit your liability. Talk to your legal counsel to find out to what extent you can limit your liability; often it is limited to the fee amount listed on the contract. Don't sign without it!
Signing a contract without limitation of liability leaves you open to lose everything you own.
10. Collection
In addition to the non-refundable fees and retainer portion of the contract, you could add this collection portion to lay out penalties for non-payment if you wish to make things very clear. Specify who will pay for lawyer fees if accounts have to go to collections.
This clause will come in handy with non-payment; just referencing such a collection clause in a letter, sent by registered mail from your legal counsel, might resolve the issue at hand quickly.
Review Your Contracts Today
Many troubled client relationships stem from not setting clear boundaries up front. It is in your best interest to have a contract to present to your next new client and to take charge of expectations and outcome.
Should you ever sign a client's contract?
You sure can, but not without your legal counsel looking it over before signing.
Invest in, and protect your business by executing well written contracts!
PS As I stated before: I’m not a lawyer, so do consult one when you are ready to put together a contract.
I am a Certified Social Media Manager, Strategist, International Keynote Speaker, Organic Specialist and Agile marketer! Blogging is my creative outlet. Running, hiking and skiing are how I recharge. You'll recognize me on stage and online by my always present orange glasses, a nod to my Dutch heritage.
