When I first opened the doors of my previous company as a freelancer, I knew that I should never work without a contract. But, being “green” and new to the freelance world, I found myself being afraid to ask clients to sign a document for fear that I would lose the business. Well, after a few misfires, some stolen concepts and having to track clients down for payment, I quickly overcame that illogical fear, hired an attorney, and now, never start any project, no matter the size and scope, without a signed written agreement. Here are five reasons why I think that you should implement legal protection for your freelance business, if you haven’t already.
1. Protect Yourself
I enter into every working relationship with a client expecting the best but prepared for the worst. Remember that, even though you are a freelance self-employed designer, you also need to protect yourself, your company and/or your brand. Without a signed document by both parties, you do not have any physical evidence of what was agreed upon. And, in the unfortunate likelihood that you may need to take legal action against a client, the first thing an attorney will ask you for is a copy of your agreement. Without one, you will be mired in the land of legal “hearsay” and none of it will be admissible in a court of law.
2. Establish Expectations
The client has accepted your proposal for their project. Great! Now you need to detail everything each of you will be providing, in a concisely detailed manner. This immediately establishes transparency in your relationship and eliminates any confusion during the work process.
3. Establish a Time Line of Events
In an interesting article titled, Create a watertight Web site design contract, David M. Adler & Associates state:
After the scope of the project is defined and mutually understood, parties need to address the schedule. This schedule should set forth development milestones, testing and acceptance periods, and payment time lines.
Let’s face it. Not every freelance graphic designer has been reliable and you will, at some point, encounter a client who has had a less than stellar relationship in the past. This is especially true when it comes to time lines. Outline a series of events for your client and give them some peace of mind that the both of you are now legally bound by these terms. Our agreement contains conditional punitive clauses, for both parties, if the terms of the time line are broken.
4. Establish a Payment Schedule
Some may argue that this should be the number one reason for working with a service agreement. Though we put ourselves through this because we enjoy it, this is our livelihood. With a signed agreement by both parties, you can establish the payment schedule that works best for you. This also establishes up front your set penalties for late or no payments. We actually stipulate in our agreement that we will not begin any work until the signed agreement is in house and the deposit payment has cleared. At the end of the project, we will not relinquish any files until final payment has been made.
5. Establish Ownership of Work and Usage Rights
Unfortunately, a lot of clients and designers believe that this is implicit in the exchange of funds for service. It actually isn’t. You must stipulate which party will own what exactly and their rights to that particular work. For example, let’s say you create a design for a poster, but the client turns around and uses the work for a t-shirt they are selling that becomes incredibly popular. Well, if you did not explicitly relinquish the rights to the design for a t-shirt, the client is in breach of contract.
Also, establish who owns the rights to the artwork if the relationship is severed before the end of the project. This, I learned the hard way. When I first started out, I took on a client who needed a DVD cover for their independent film. We sent over 4-5 different mock ups which were all rejected. The client eventually decided to use another service. Fast forward a few months later and I see the DVD cover on the shelf and it is strikingly similar to one of our mock ups. There was nothing I could do because I worked without the net of a contract.
I’m just starting out. What should I do?
Obviously, this is a task better handled by an attorney. But, you may be just starting out and you cannot quite afford an attorney’s fee for drafting contracts for each and every client. There are a few resources online you can use for little or no money. Once you have established a nice cash flow for your business, you should definitely have your past contracts reviewed and strictly use an attorney going forward.
- About.com Graphic Design Contract for Desktop Publishing (FREE)
- All Freelance Work: Developing A Contract (FREE)
- USLegalForms.com Service Contracts (US only – Purchase fee)
- Lawdepot.com Service Agreement (Draft a customized agreement online – Purchase fee)
- AIGA Standard Form of Agreement (FREE) provided by Joni Mueller
- 24 ways: Contract Killer provided by Ariel
Start your freelance business off on the right foot. Make sure you never work on a project without a contract and you will thank yourself in the long run. If you run into resistance from a potential client, then simply walk away from the situation. As Jacci Howard Bear states in About.com’s article, Never Work Without a Freelance Design Contract:
It doesn’t matter whether your client is a family member, a longtime associate, or someone that you just know is trustworthy, if you work without a design contract you and your business run a huge risk of not being taken seriously and you risk losing money, losing clients, and even losing friends.
You are now the owner of your own business and the only person solely responsible for the protection of that business. Start protecting it today and stop working under a handshake and a pat on the arm.
Great article Erik – it’s essential to get a good contract under your belt when you start out as a freelancer or in your own business – It will definitely pay off in the long run. As you pointed out, not only will it protect you, it will help you to be taken seriously.
If a client refuses to agree to your contract, you’re better off without them – you’ll probably save yourself a large headache and a lot of money.
Its always good to have a contract in place as you never know when issues will arise later on and you can fall back on the scope and documentation of your contract. Being in freelance, it helps avoid future complications.
As a freelance designer about to begin my career this has helped me avoid many potential pitfalls in the future. Thanks so much!
@Ariel, @Joni,
Thanks for the additional resource links. They have been added to the post.
@Joni,
Thanks for the AIGA link. It has been added to the post.
i started my company 8 months ago and have also learned from my mistakes. anyway i found this blog a couple weeks back and Andy Clarke gives his tips for writing a killer contract. He also has his contract readily available to download and modify for free. I used it this week for a large project and it really gives me a piece of mind. Here is the link to the article and contract. Enjoy! http://24ways.org/2008/contract-killer
Best starting point is AIGA contract, here:
http://www.aiga.org/content.cfm/standard-agreement
Thanks for this!!
Very helpful and well-written. I knew about contracts for awhile when freelancing, but this post outlined exactly what should go in and what to expect. Thanks!
Thanks for sharing this post. This is a very helpful read for those who are still starting to make it as graphic designers as well as those who have been in the field for quite some time yet struggle what to do in accepting freelance jobs.
I have my own bad experience on not having a contract between me and my clients. I was really stupid to give the corel draw files without asking them the full payment. Til now I haven’t received their payment because I don’t have a contract to show them they hired me.