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The Design ContractThe Design Contract is the final part of the Client Onboarding Process. This vital part confirms that a potential client is now a paying client.
In this series, I talked about the Client Onboarding Process as a whole before breaking it down into the individual components, the Intro Packet, the Client Meeting and the Design Proposal. Each of these different elements helps win over potential clients encouraging them to hire you, which brings you to this next step, the Design Contract.
In the last episode, I shared a statistic with you; 48% of designers don’t use a contract. I find that number mind-blowing. Not only does a contract establish you as a professional business, but it’s your protection against anything that may go wrong with the project or the client.
Have you ever been part of a design forum or online group where someone mentions an issue they are having with a client? What is the #1 response or comment they receive? “Did you have a design contract?” If you are part of that 48 %, I hope you take note and add a contract to your client onboarding process right away.
Before I go any further, let me state that I am not a lawyer. Do not take anything I mention here as legal advice. My advice is for you to either have a lawyer draft up your contract or at least create one yourself and have a lawyer review it. If you don’t have the budget to consult a lawyer, please find yourself a ready-made contract and start using it today. A quickly written, non-lawyer verified contract is still better than no contract at all. Then, once you have the means, consult a lawyer.
As Mike Monteiro, co-founder of Mule Design Studio said.
“You need a lawyer when you decide to stop being a design amateur and decide to start being a design professional.”
Here are two sources for free design contracts you can modify for your needs:
What is a Design Contract?
A Design Contract is a legal terms and conditions document that defines the expectations of a project for both parties. A design contract should contain:
- An overview of who is hiring you, what they are hiring you to do and for how much.
- The respective responsibilities agreed to by both parties.
- Specifics listing everything included and not included in the scope of the work involved.
- What happens should one of the parties change their mind about anything pertaining to the project.
- An overview of liabilities and any other legal matters.
In other words, Your design contract needs to cover your process, what the client can expect, what you can expect from the client, time frames, payment details, technical details and any other legalese you deem fit.
Everything in your contract should be explicitly stated and agreed upon by you and your client before a project begins.
Do you really need a design contract?
Maybe you're thinking “if 48% of designers don’t use a contract then how can it be so important?” Let me tell you. A contract is the only surefire way to protect you and your business’ interests while working with a client. So the answer is it's crucial. You should use a design contract for every client and every project you take on.
In the case of disputes, a signed contract will quickly establish if anyone is at fault, and what actions should be taken to remedy the conflict.
With that said, you need to be reasonable. If your mom or sister wants you to design an invitation for their annual poker tournament, you don’t need her to sign a contract. Friends and family are exempt, most of the time that is. My rule is; If what I'm designing will be used to generate money then I have them sign a contract, even if it's family. This includes charities, fundraisers and non-profits. When money is involved, it's better to protect yourself.
Contracts prevent problems.
You want client relationships to go smoothly, don’t you? A contract can help by preventing problems before they start.
A Contract protects for both parties: A good contract should benefit both parties signing it. Not only does it protect you but it should protect your client as well.
A Contract shows your importance: The goal of any client relationship should be to see each other as partners. A contract establishes this. Without one, a client may think you are working FOR them instead of WITH them. They will treat you differently if you get them to sign a contract.
A Contract makes expectations clear: When both parties understand their roles, the whole project will move smoothly.
When do you present your contract?
A great time to present your contract is as soon as you finish your Design Proposal. Everything is fresh in the client’s mind, and they are receptive to moving forward. You can even use it as a stepping stone or launchpad to land the client.
“That was my proposal for designing your new website. If you would like to move forward to the next step, here's a contract we can go over and sign together before beginning working on this project.”
Presenting your contract may be all that’s needed to push the client to hire you.
If the project doesn’t require a proposal, you can email your contract to the client and request they sign and return a copy of it. Make sure your contract is clear that you will not start on a project until you have the signed contract in hand. Don't fall for a “The contract is in the mail so go ahead and get started.” line.
As a side note: If a client brings their lawyer to the meeting, you will want to have your lawyer present as well. Never discuss your contract with a client’s lawyer yourself.
Not all Desing Contracts are the same.
Drafting a Design Contract takes time, and lawyers cost money. Although tempting, it is not advisable to create a single contract that covers every type of project you undertake. Some sections of your contract may be reusable, but most need to be flexible enough to adhere to the scope of a given project.
For example; a contract for a logo design should include a transfer of Intelectual Property clause upon completion, but a contract for website design has no such requirement. It’s best to have variations of your contract for each type of design work you do.
What goes into a design contract?
Here are different sections you will want to include in your design contract.
Define the parties: Name yourself and your company as well as the individual you will be dealing with and their company name. Make sure you mention your contact person by name. It can save you having to deal with multiple people at the client's company.
Project Basics: Outline the scope of the job, what project(s) the client is hiring you for and what process you will take to complete said the project(s)?
Client responsibilities: List the client's responsibilities at each stage of the project (providing content, providing logins and passwords if required, proofreading).
Deliverables: Define what the client will receive from you at the end of the project, as well as what you don't provide. For example: who is supplying the images and copy for the project? Do you offer layered working files at the end of the project, or do you only provide final JPGs or PDFs? Also, be sure to talk about storage and archiving. How long do you retain files once the project is complete? Is there a charge should the client ask for files in the future?
Procedures: Mention the processes you follow, such as the number of proofs you will provide and the number of revisions the client is allowed. You can also state your use of third-party contractors if you use any.
Timelines and deadlines: You should both agree to realistic schedules and deadlines for the project. How long should each stage take? How much time will the client have to review each step? Also, remind them of your acceptable contact schedule and contact methods, so you don't get interrupted late at night asking how the project is going.
Payment details and terms: List the total cost of the project. Also, mention any payment stages or breakdowns. Include penalties for late payments as well as fixed or hourly fees for additional work outside the scope of the defined project.
Confidentiality and NDRs: Because of the nature of most design projects, and how we are privy to information before it becomes public, it’s a good idea to state in your contract that all sensitive information provided to either party is confidential. You can also indicate your willingness to sign a non-disclosure agreement should the client request one.
Intellectual property: As the designer, you automatically own the rights to anything you create. If an IP transfer is required, state when and under what conditions this will happen. Also, be sure to mention what you do and what you don't include in the IP transfer. If you are licensing your IP to the client, what are the terms of the licensing agreement?
Promotion and credit: Include a clause giving you permission to promote and share the work you create, including intellectual property you’ve signed over to the client. Have an allowance in your contract that allows you to use the work for self-promotion and to submit the work for competitions and display. Also, include any information for the client to appropriately credit you for your hard work. Include the exact language you would like them to use when crediting you in press releases, in awards and competitions.
Cancellation: State what happens if either party needs to end the project for some reason. What happens to any payments you've received or fees that are pending? Are there different cancellation policies for different stages of the project?
Force Majeure: Also known as “Acts of God”. You should specify what happens should any unforeseen situations beyond your control make you unable to complete the project. Can the project be salvaged through extra time? What happens to payments?
Liability: Make sure you cover yourself should something go wrong. You don’t want to be held responsible for problems down the road.
Legal jurisdiction and legal fees: Should you have to enforce the contract in small claims court, state that all legal proceedings take place in your local jurisdiction and that all legal fees are the responsibility of the client.
Personal guarantee: (Most clients will ask you to remove this section): Should for some reason the client company fail to pay you, this permits you to go after the person who signs your contract for payment.
Signatures: This is the most crucial part of the contract. It’s the part where both parties agree to the terms within. Signing the contract makes it legally binding.
When things go wrong
I hope it never comes to this for you, but should a situation with a client turn ugly; your contract is what will protect you. A good design contract will allow you to quickly and easily sort things out and possibly salvage the relationship with your client.
Should any disputes arise, get on the phone or meet the client in person. Talking directly to the client can often deescalate a situation before it becomes a big mess. Calmly remind the client of the terms of your contract and what they agreed to. Not reading or not understanding something in a contract is not an excuse that holds up once they’ve signed it.
If you can’t solve the issue through conversation, get your lawyer involved. It’s their job to handle situations like that. Use your time to concentrate on the next client and project.
Keys to remember
Your contract has to fit your workflow and policies. Even if you find a ready-made contract template online, you need to alter it to apply to your personal needs.
Find a lawyer: I’ve already mentioned it but it merits saying again. You really should consult a lawyer about your contract. It’s cheaper to craft your contract and have a lawyer review it than it is to pay one to write it up from scratch, but either way, it should be seen by a lawyer, so you know that it’s legit. Keep in mind that the contract you found online may not be suitable for your jurisdiction.
Ever Evolving: A contract is a living thing. You should always be improving it by adding details from each experience you face. If you run into a difficulty with one client, alter your contract to prevent it from happening with future clients.
Let the client read it: You want to present your proposal, but let the client read your contract on their own. Offer to answer any questions they have about it, but allow them to absorb it at their own pace without any pressure from you.
Be as detailed as it needs to be: Because it’s an evolving document, it’s OK to have a long contract. The more you cover, the more you protect yourself.
Contracts are negotiable: It’s ok to negotiate the terms of your agreement with a client. Just make sure that the newly negotiated terms benefit you.
There you have it: Design Contracts, the final part of the client onboarding process.
Next week I’m going to finish off this series with client offboarding, an essential part in solidifying your client relationship. I hope you’ll join me for that one.
Have you ever had to enforce your contract with a client?
Let me know by leaving a comment for this episode.
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