HOW TO PROTECT YOURSELF AS CREATIVE BUSINESS OWNER
Your business and ideas power your life and have made you into the fierce warrior you are today.
But are you doing all that you can, to protect yourself and your business? That is the
question that keeps us up at night.
Things have changed, and now working without a contract sounds scary.
Terms and Conditions are crucial to the success of your business because they form a
contract between your business and everyone who uses your services.
If you are worry about upsetting your clients when you ask for payment or when you
tell them that they want something that wasn't included in your agreement.
A design contract helps you take care of the unpleasant part of business so you can
focus on what you do best.
When something comes up, you can just point to the contract, remind your clients
about what they've already agreed to, and move on.
They are an excellent way to limit your liability and protect your image and brand.
Here are few key contract terms to help you protect yourself in case (heaven forbid)
anything goes wrong for you!
¦ Written Agreements:-
It's a common situation for business owners: a client or customer asks you to do something,
and you say, Sure, I can do that. Business owners make these sorts of handshake deals
all the time, but it's a risky practice because the parties may have different
understandings about what was agreed to. And if theres a dispute, theres no written
evidence to back up your claim. At the same time, a formal contract sometimes feels
too formal and complex for the situation. There are several ways to deal with this problem:
Send the client or customer a letter agreement. This is simply a letter describing what
was agreed to. Ask the client to sign the letter and return it to you before you start work.
Send the customer an email confirming the terms of your agreement, and ask the customer
to confirm that they received the email and agree to the terms.
Use a form for estimates. Fill it out and give it to customers when you make a proposal.
If they agree to the terms, have them sign the estimate form.
¦ Accountability:-
Whether or not you're a procrastinator, a contract is the best way to gain accountability
on a project. We're all familiar with what signing a document means; we've all done it so
many times that our brain knows that by signing a document we are agreeing to something
and creating a binding relationship. But people don't like signing something they don't
understand. It's important that your contract be as clear and easy to read as possible.
While you do need to include some "legal speak" to protect yourself, it's not entirely
necessary for it to be written in a confusing way. Using plain English will help both
you and your client understand the relevant terms.
Make sure you make everything clear there should be nothing to hide.
If you're nervous about some terms in your contract and are apprehensive about sending
it off, you may need to re visit your contract terms.
Don't send anything to the client you don't agree with, or that you aren't comfortable with.
Being accountable to the project and specific deliverables help you focus.
Including the deliverables in the contract highlights what's required from you.
With this knowledge you can better priorities your time and ensure you're working on
delivering the right results.
¦Changing the agreement:-
A better option is to include in your written agreement a clause saying that changes to
the agreement can only be made in writing, with the consent of both parties.
A simple version of this would be:
This Agreement can only be changed by mutual written consent.
Keep in mind that an exchange of emails can qualify as mutual written consent as long as it's
clear from the emails that both parties are agreeing to the change.
You generally don't have to sign an amendment unless the contract specifies that
you do (i.e., This Agreement can only be changed by the signed consent of both parties.)
¦ Payment schedule and refunds:-
Asking for money is always hard. It's actually the hardest part and makes feel very
uncomfortable. That's one of the reasons you should write the costs of custom designs
on your website. This way people that can't afford your services won't contact you.
You also have to decide how to handle payments and refunds.
Most business owners ask for 50% up front and 50% before the design is installed or
the files are delivered. Asking for a down payment is essential for booking serious
clients and it might also prevent last minute cancellations. You spend a lot of time on
a project, not only working on designs but also talking to clients. It's really
uncomfortable to think about not getting paid for the work you've done,
so how do you want to handle that?
Make sure that is clear in your contract.
Don't forget to state how you take payments.
Is it via PayPal? Cheque? Of course, using an online payment system like PayPal instead
of cheques will speed up the process. Make sure you also mention refunds.
For example, the initial payment is non-refundable.
Only offer refunds if you are responsible for canceling the project.
Make sure your statements here are super clear!
¦ Term and termination:-
This section of your contract doesn't have to be super confusing.
First, state how long the contract is in effect.
For example, if you're creating an affiliate agreement make sure the other party
knows how long it'll last and what will happen when it's over.
This is super important if you’re working on retainer instead of a one-off project.
Things may get more awkward around the idea of terminating the agreement,
but it's so very important to include this in your contract.
Be very clear of what your client will be responsible for regardless of who cancels the project.
Don't forget about what you'll do. Any confidential information that has been provided
will be destroyed if the project is cancelled.
¦ Rights of ownership:-
This section is tricky for business owners.
When you're just getting started you never really know who should have the rights to the
work created.
Typically, a work created by a designer is theirs until they transfer the usage rights or
ownership to the client.
That usually happens when the design and payment are final.
If you (as the creator of the work) retain rights, the client might be able to expect you
handle copyright and trademark paperwork.
No one wants to have to deal with that for someone else.
If you sign over all rights to the client, be sure to mention what they're allowed to do
within those rights. For example don't allow manipulation of your work.
It's also good to let your clients know what rights you'll retain.
¦ The legal terms:-
This section is usually the big lawyer terms that can be difficult to read.
If you're just getting started, you might not have this in your contract,
but it's still important to put in just in case.
Things that would fall into this section would be whether or not you can be held liable
if something goes wrong with their brand or website, if the contract can be transferred
to someone else, and if (heaven forbid) things went to court where that would take place
plus whether or not the client would be required to pay attorneys fees.
Writing a contract can be tricky, so if you're not sure what exactly you need in yours
and how to phrase things, definitely consider hiring a local lawyer or at least
chatting with someone on Legal Zoom
(Screenshot below), get things in order.
When it comes down to it, you're not just protecting yourself by using these terms in your
contract; you're also protecting your client.
¦ Other terms:-
You will often receive images or logos from your clients. The client should be responsible
for clearing any materials against copyright infringement before using them, not you.
If you are transferring a website, the client should be informed that all sorts of things
could go wrong and you are not responsible for that. You will also have access to their
websites, hosting accounts and maybe even social media accounts.
Let your clients know that their private information is safe with you and you will
erase their passwords once your work is complete. Think about what you do and what
can go wrong and make sure to add all those details in your contract.
Contracts are often seen as something negative, but they are useful for both the
service provider and the client.
¦ Conclusion:-
A contract not only protects you if something goes wrong it helps things from going wrong
in the first place by clarifying expectations and preventing misunderstandings.
It is hard to write a design contract but you should start with the most basic things
and add other terms or adjust the existing ones as you gain more experience.
You can always hire a lawyer for this, but the long, jargon-filled contracts are often
scaring clients and are hard to understand for those who don't have a lawyer.
You have to be sure that your clients understand what they are signing.
Avoid scarcity mindset and don't alter terms or create leeway in your contract because
you really want the project. Respect your business and yourself as a professional.
¦ Disclaimer:
This article is based on general principles of law and is intended for information
purposes only. By providing this article, I do not provide individualized legal
counseling or representation and use of information in this article does not
constitute an attorney/client relationship. Please consult an attorney for more
specific representation.