The Contract | How to Draw Up a Client Contract
A clearly written contract is an essential element of onboarding a new client. Contracts don’t have to be long, scary legal documents — I deliberately use a document that is written in plain, easy to understand language — but they should clearly explain what both parties are agreeing to.
Keeping the contract short, focussed and easy to understand helps reduce friction, allowing you to start the project quicker (and get your deposit invoice paid sooner!). Without a contract, your client may not clearly understand what they are paying for. You risk scope creep (clients asking for more features without paying for the extra work), late payment (or even non-payment) and confusion over ownership, requirements and deadlines.
What to include and why
If you have provided your client with a project estimate/quote, then you have already written half your contract. A lot of the information your contract should include will probably be in that estimate.
Briefly describe who the contract is between (include company names and addresses of both parties), summarize the project (“We will design and build a bespoke Shopify Theme”) and the associated cost (“...for the estimated total price of $$$”).
Describe what both parties agree to (e.g. client confirms they have the authority to enter into the contract, will review work and provide feedback in a timely manner, will stick to the payment plan... you will endeavour to meet deadlines and maintain client confidentiality, etc.).
Detail all the project deliverables. This is really important because it explains to the client what they are getting for their budget. If you are providing design mockups, explain how many mockups you will include (“1 main design concept and up to 3 rounds of design revisions”). Explain what browsers and devices you will support (you are testing your pages in Safari 5 on Windows right?).
Describe how user acceptance will work so everyone is clear how deliverables will be approved as you work through the different project stages. This will help the project progress smoothly. As well as describing what is included in the project scope, describe what is not included (“We are not responsible for inputting product, blog or page content to your store”). This will help to avoid the awkward “Really? I thought that would be included...” conversation at the end of the project.
Inevitably, things change so you should describe how you will manage this change throughout the project (“The design stage includes three rounds of design revisions. Additional rounds of design will be charged at our standard hourly rate of $$$. All changes should be requested in writing via email or Basecamp”).
Describe how the rights to the work produced are assigned on completion of the project. Do all ownership rights transfer to the client? Are you handing over source code? Make sure you include a sentence about reserving the right to showcase the project in your portfolio.
6. Payment plan
Include a payment plan with payments associated with different project milestones. I always ask for an initial project deposit (to book the work into our production schedule and secure a project start date — this ensures both parties are serious about the project) and then staged payments (e.g. payment #2 upon completion of design stage, payment #3 on completion of build stage). Make sure you assign a dollar amount to each of these staged payments in your contract and then clearly set out your payment terms (otherwise you could be waiting 30 days before you get paid).
Once you have completed the project, you have been paid and the website is live, how long will you troubleshoot issues and fix errors?
What happens when this period is over — does the client have to pay for your time? Detailing your warranty period will ensure your project has a clearly defined end, and will prevent an overly long and painful project handover.
If things are not working out, describe how the contract can be cancelled (“At the end of the design stage if you are not happy with our work, you will pay us in full for everything produced to that point and cancel this contract”).
That’s it! Both parties should sign the contract (it’s not binding if both parties do not sign — just sending the contract to your client is not enough) and keep a copy for their records.
It’s important to create a contract that is appropriate to the size of the project. At the start of the article, I recommended keeping the contract short and focussed. But in reality, the size of the contract will probably relate to the size and complexity of the project. I think the important thing is not to scare off a potential new client with an intimidating and overly long contract! Keep things accessible.
Personally I believe it is more important to clearly explain what both parties agree to in an easy to understand format, as opposed to creating a 50-page document that will be water-tight and stand up in any court of the land.
If you are terminating a contract, it is important to do so in a professional manner that maintains the reputation of your business. If you just send an email, it is easy to misinterpret or come across badly— make a call, explain why the business relationship is not working, and follow up in writing with an email.
Templates and other resources
There are a lot of open source contract resources available on the web, but here is a selection I have found useful:
An open source collection of legal contracts. The website includes tools for e-signing and all documents are free to download, customize, store and e-sign.
- AIGA Standard Agreement for design services
- Sample designer contract by Speider Schneider
- Contract for Design Works by Dan Wong
Example agreement used by SuperFriendly, a US-based design studio. Simple and easy to read, you can use this example as a starting point to create your own agreement document.
Contract Killer is a popular open source contract for web designers, by Andy Clarke. Another easy to read, plain English agreement with no jargon or legalise.
Don’t want to scan, sign and email back a PDF? Here is a selection of e-signing services you can try instead:
Is an e-Signature legal? According to Wikipedia, yes — but it depends on your country: “In many countries, including the United States, the European Union, India, Brazil and Australia, electronic signatures (when recognised under the law of each jurisdiction) have the same legal consequences as the more traditional forms of executing of documents.”
Each of the e-signing services linked above include information about how their service is legally binding. Docusign outlines the appropriate legislation for the United States, United Kingdom and European Union.
F*ck You, Pay Me
A favorite video in our office. Mike Monteiro, Design Director and co-founder of Mule Design Studio talks about the importance of contracts at a Creative Mornings event.
Over the last 15 years, 99% of client projects have run smoothly. But when they haven’t, a clearly written contract has helped to clarify issues and smooth out payment problems. The contract provides peace of mind and protection for both parties...so don’t start a project without one!
Important: I am not? a legal advisor. While my company is happy to use a modified contract template, this approach may not be appropriate for you! Nothing in this article should be considered legal advice. Consult a solicitor/lawyer to if you want to address the particulars of your specific situation.
About the author
Ryan Foster is the owner of RyanFosterDesign, a digital agency specializing in ecommerce. He creates custom Shopify Themes and private Shopify Apps for emerging and fast growing brands around the world. He works with high-profile clients including Pebble and DODOcase.