How To Create A Contract For Your Design Business

 

As all freelance designers and creative entrepreneurs know, contracts are a necessity when working with clients, no matter how big or small the project is. 

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Why?

  1. Contracts provide you and the client with a description of responsibilities. It helps you both understand who is responsible for what. 

  2. Contracts secure payment. 

  3. Contracts protect you if you encounter problems with your clients.

Most designers do have a contract in place, but it's usually either

  • An unprofessional contract they wrote themselves.
  • A contract they created from bits and pieces of other designers contracts
  • A template they found on some shady website they can't even remember.

Do any of those scenarios sound familiar?

There's nothing wrong with writing a contract yourself or using a template (I do!) but you have to make sure of two things:

1. That you know and trust the person who created the template.

Most designers Google 'contract template' and use the first one they come across, but they don't really know who wrote it.

Is the creator qualified to create contracts? Do they know what they're doing? Will their contract template stand up in court?

If you're unfamiliar with the person who wrote the contract, you probably won't know the answer to these questions. If that's the case, you're leaving your businesses safety to chance. You're putting faith in the unknown, hoping that your contract is legit enough to save your butt if anything bad happens. 

That's not good enough. I don't know about you, but I like to know that I'm totally covered in Nightmare Client situations. 

2. That your contract covers all the common concerns faced by designers. 

Most contracts on Google aren't specifically made for designers. And the ones that are barely cover everything a web, graphic and print designers needs in their contract. 

When I was a newbie designer, I used a template I found on Google as my contract. The template said it was specifically for designers, so I was confident it covered everything I needed. But when I encountered my first scary client situation and needed to turn to my contract for backup, I realized my contract didn't say a single thing about the problem I was up against. 

I don't want you to go through the same frustrating dilemma. That's why I want to introduce you to Annette Stepanian, Attorney At Law and badass boss lady.

In today's 1-hour masterclass, Annette is going to teach you how to create a contract for your design business!

In this month’s masterclass I talked with special guest, Annette Stepanian*, an Attorney At Law. Watch or listen to learn how contracts help you close the deal with high-quality clients, and exactly what to include in your design contract.

(If you're looking for a reliable contract template, look no further than Annette's contract for designers!*)

Topics discussed:

  • Breakdown of the main masterclass lessons (8:17)
  • In your contract, specify the services to be performed (14:%5)
  • In your contract, add your payment terms (20:55)
  • What do I do if a client says she loves the design then tears it to pieces? (31:30)
  • 4 contract strategies to help minimize client delays (33:01)
  • Understanding copyright (37:40)
  • Should you have a contract for free/volunteer work? (44:34)
  • Will approval forms frighten clients away? (47:24)
  • If I transfer the copyrights to my client, can I still use the work in my portfolio? (51:20)
  • Do you need a license to establish your copyright or is everything you create automatically copyrighted? (53:10)
  • Are all lawyers scary and crazy-expensive? (55:55)
  • Besides disappearing when it's time to sign the contract, what are other red flags that show a client may be a nightmare to work with?(59:24)
  • Listen to your gut when taking on clients (1:45:00)
  • Does Annette provide help for 'subcontracting' contracts? (01:02:45)
  • Do you send design approval forms after every round of revisions? (01:02:46)
  • Can I resend new contracts to clients who have already signed my old contract? Should I get them to sign my new contract? (01:03:39)

You’re reading this because…

You’re scared of using a contract because you think it will scare clients from booking your services.

You’re a designer and you don’t have contracts in place. Or you have contracts, but you’re not sure if they say what they should to protect your business. 

Each time you sign a contract with a client, you want to feel confident that you’re protected and you’re perceived as a professional.


4 Reasons Why Contracts Are Essential

01. Minimize client delays

One very effective way to make sure your clients stick to project deadlines, hand in homework on time and give you their feedback on time is including a clause in your contract that outlines all your deadlines, how long your client has to provide you with XYZ, and what will happen if the project goes over the deadline due to your client's lateness. 

Surprisingly, many designers don't think this can be included in their contract but it absolutely can. 

Late files and feedback are one of the biggest problems graphic designers struggle with. The first step to stopping the problem is being specific in your contract about what will happen if your client keeps delaying the project. 

02. Getting paid on time

If late files and feedback are a designers no.1 struggle then I'm pretty sure getting paid on time comes in second. There's nothing more frustrating than a client running away with the money they owe you, or telling you 'they'll pay you next week' but never coming through on their promise. 

Obviously there are things you can do to prevent this from happening, like making sure you don't hand over their final files until the client has made their final payment. 

But just in case payment does become an issue, your contract should cover what will happen. 

03. Avoiding scope creep

Picture this: Your client asks you to add something extra to their project but they don't want to pay extra for it. You're feeling generous and you don't want to disappoint them so you agree to do the extra work for free. But then they want another extra, and another, and another. 

Has that ever happened to you?

It's called Scope Creep. It usually happens because you don't feel like you can say no to the client, or you don't want to sound unreasonable or greedy. 

But if your contract outlines the process for adding extra work to the scope of the project and tells the client they have to pay for it, you don't have to feel bad about saying no to doing it for free. You just have to point them towards your contract and remind them of what it says.

04. Establish your right to copyrights

Have you ever wondered who owns the copyrights to your final designs?

How about the mockups you made that your client rejected? Who owns the copyrights to those?

If you don't establish your right to copyrights in your contract, you could find your client using one of the drafts they turned down. That's not very good if you went on to use that mockup in a different project. 

Make sure your deal with copyrights in your contract to avoid difficult situations like these altogether. 


How do I handle when a client asks me to do more than we agreed? (i.e. Scope Creep.)

Use your contract to specify the services to be performed. There are two ways to do this:

  • Create a proposal/estimate that is attached to your contract.
  • Outline your services in your contract itself.

Be really specific in your contract. Create a full checklist of the things you’re going to deliver. 

Think through your creative process and break it down into:

  • Deliverables
  • Due date
  • Fee

Perhaps identify what ISN’T included. This could be font licenses, photography, website copy etc.


How to outline additional services in your contract

In your contract, list the types of services that fall outside the scope of services outlined in the contract. 

Think about these questions:

  • What fee will I charge for these additional services?
  • Should I submit a new proposal for them?
  • Should we enter into a new contract?
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Save yourself the stress of creating a contract from scratch and use Annette's contract for web, graphic & print designers!


Set out your payment terms

Decide on whether you charge hourly fees or flat fees. 

One popular way to charge for your services:

  • Charge a non-refundable deposit upon signing the contract.
  • Stagger the remaining payments with project milestones or periodic payments.
  • Services will be suspended until payment is received and final files will not be delivered.

Outline this payment structure in your contract and be really clear about what will happen if payment is not received. 

Now think about additional expenses you want the client to pay for, such as:

  • Stock content
  • Photography
  • Website copy
  • Fonts
  • Printing
  • Web hosting

You should specify that these expenses are the responsibility of the client inside your contract. However, you should remember not to incur these kind of expenses without the client’s permission first. 


What do I do if a client keeps asking for revisions?

In your contract, specify how many revision rounds are included in your project fee. 

Specify what counts as a revision.

Specify if there is a fee for additional revisions, the rate, and whether you will create a new proposal.

(If you have Annette’s contract for designers, it comes with a Change Request Form that clients can fill out when they need to pay for extra revisions.)


4 ways to use your contract to minimize client delays

Add an expiration date to your proposal/contract
When booking a new client, add an expiration date to your contract and proposal. This will provide a sense of urgency and push them to decide quickly whether they want to hire you or not. 

Identify client responsibilities
Be sure to tell them how important it is that your client provides feedback/payment etc in a timely manner. 

Automatic acceptance
Your contract could include a clause that states the client has X number of days to approve designs or the designs are automatically approved and you move forward anyway. 

Failure to respond
When a client fails to respond, services as suspended. 


Understanding Copyrights

A copyright does not protect ideas or facts, but the unique way in which ideas or facts are expressed. 

Any time you create anything, it’s protected by copyright laws. 

Who owns the copyright?

  • The author of the original work
  • Employer for a Work Made For Hire: work prepared by an employee within the scope of employment. For example, a designer in the graphic design department of Cosmopolitan magazine. Cosmopolitan owns the copyrights of your work, not you. 
  • A person to whom the copyright is legally transferred

Your contract should outline who owns the copyrights. If you’re a freelance designer, not an employee, you can:

  • Retain the copyright and license it’s use to your client
  • Give the copyrights to your client

If your give the copyright to the client, your contract needs to state that you’re allowed to included that work in your portfolio.


Your Homework


Homework 01: Check if your contract includes what it should.

Go through your contract and check if it outlines:

  • Your payment terms
  • Everything that is and isn't included in your packages/services
  • How you handle extra revisions
  • How you handle additional services that are not already included in the client's proposal

Homework 02: Add expiration dates to your contracts and proposals.

When booking a new client, add an expiration date to your contract and proposal. This will provide a sense of urgency and push them to decide quickly whether they want to hire you or not. 

Homework 03: Check if your contract outlines who owns the copyrights to your work.

Has this month's masterclass helped you understand copyright? Great! Now check your contract and see if it outlines who owns the copyrights to your work. If not, decide if you want to retain copyright or give it to your client. Then include that information in your contract. 


Want a legit contract template?

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I get it. Writing a contract is daunting and scary - I 100% agree. That's why I recommend buying Annette's contract for designers. It includes everything a designer needs, and even comes with a guide to help you understand all the legal terms!


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"My name is Annette. I'm a lawyer for entrepreneurs.

I’ve learned a lot about what it takes to run a small business after successfully running my own creative business. Today, I combine my passions for law and small business to teach other creative professionals & entrepreneurs how to lay a proper legal foundation for their business."

Visit Annette's website

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*Any link with an * next to it is an affiliate link.

Disclaimer: I am not legally trained and I am not qualified to give you legal advice. The information in this article is not a substitute for working with a trained lawyer or professional.


 

Nesha Woolery

I build beautiful brands & websites for passionate entrepreneurs!