Why you Absolutely Need a Contract for Every Project
Contracts are absolutely essential for your businesses, and you need one for every gig. They’re an important instrument that defines the scope of your project or working relationship, but they’re also an important element in protecting you and your business in the long run. The process of working out a contract is beneficial for you as a service provider, and it’s also instrumental in educating your clients about how to work with a designer, what the expectations are, what their role is, etc.
Here’s a quick run-down of why you absolutely need a contract for every gig, no exceptions!
It Sets the Scope of the Project
How many of us have succumbed to the heinous business entity that is scope creep? (Answer: pretty much all of us.)
You sign on to do one thing—maybe a simple five-page website. But after you get started, you learn that this simple project isn’t so simple after all. Maybe the client wants you to work on the copy, or they want you to do a new logo. Maybe they thought they wanted five pages, but actually they need 12.
If you don’t have the scope of the project clearly defined in your contract, you’re stuck. You can either push back (and likely offend them) by saying that you weren’t hired to do that and they need to find someone else to do that part… or you can do what they ask of you, and see your profits erode with every new request.
Having the scope laid out in a contract, before you start working on the gig, gives you an easy way to respond when the client wants to increase scope. They want a new logo to go with their redesign? Tell them that you think it’s a great idea but that it’s outside the scope of your current agreement and you’d be happy to provide one for [insert your rate here]. There’s no arguing with that.
Defining the scope of the project within the context of contract negotiations gives your clients the opportunity to be clear on what exactly they want, and it gives you a good sense of what the full project really entails and also what it will be like to work with the client. That’s a win for everyone.
It Gives a Finite Start and End Date
Related to scope creep, you can set up a time period for the contract. This is especially helpful if you’re doing some sort of open-ended work for the client (like site maintenance or anything on retainer). You don’t want to be locked into this client forever, especially if it’s a long-term relationship and your fees are going up with other clients. Setting the contract up to be renegotiated after a specific amount of time, like one year, can help you ease your way out of a client relationship that isn’t working for you.
Related to scope creep, you can set up a time period for the contract. This is especially helpful if you’re doing some sort of open-ended work for the client (like site maintenance or anything on retainer). You don’t want to be locked into this client forever, especially if it’s a long-term relationship and your fees are going up with other clients. Setting the contract up to be renegotiated after a specific amount of time, like one year, can help you ease your way out of a client relationship that isn’t working for you.
You can also build in a “trial period” at the start if you and/or the client want to get a good feel for how it will work together and don’t want to make a long-term commitment just yet. The trial period also gives you the opportunity to work for a reduced rate temporarily, prove your value, and then charge what you ought to be charging after the client is convinced that you’re the right person for the job.
It Sets up a Plan for Workflow Expectations
One rookie mistake is to promise a specific timeframe, right from the beginning. Many designers have been stuck with deadlines they’ve committed to but aren’t able to meet because they haven’t received the feedback or information they need. Don’t let that be you!
Stipulate in your contract that any deadlines are tentative and subject to change if you don’t hear from the client in time to make them happen. In other words, don’t promise to deliver revisions two weeks after submitting the first proof; promise to deliver the revisions two weeks after receiving feedback on the first proof (or whatever your timeframe is). That way, the client knows right up front that you aren’t going to begin working on the next step until they’ve done their job.
Pro tip: When you work this kind of arrangement into your contract, it’s also helpful to remind the client as the project progresses. As you submit the first proof, for example, include a line that says something like “Per our agreement, I’ll have any revisions you’d like ready for you within two weeks of receiving the request.” You don’t want to paint yourself into a corner by promising revisions in two weeks, but not getting the feedback until two days before that two-week deadline.
It Clearly Defines the Payment Procedure
When you’re doing web design, the project fees can soar to four or five digits. That’s a lot of money to leave “unregulated,” especially if you don’t know exactly when you can expect it and who’ll be sending it. Defining your payment terms before you begin work will answer critical questions for you and for the client.
With a contract in place, your clients will know when to expect the invoices and aren’t going to get any major surprises, which is great for their budgeting and planning purposes. And you will know where to send your invoices, at what milestones to send them, and when to expect payment. You can also stipulate how you get paid (for example, via PayPal or via check in the mail) and set out due dates and late fees.
It Establishes the Jurisdiction, Should Things go South
It doesn’t happen often, but every now and then you may find yourself up against a wall. A client owes you money, and the fees are significant enough to warrant some legal action.
But what happens if you’re in North Carolina and the client is in New York? Where do you file? Generally speaking, there’s not a true, universally accepted default answer to that question. The best thing you can do is answer it yourself, in your contract.
State clearly in your contract that any disputes will take place in your state/county. Claiming that jurisdiction makes it much easier for you to make decisions and move forward with legal action, should the (unlikely) need ever arise.
There’s also the hidden benefit of working the legal jurisdiction into the contract, right at the outset of your working relationship. It signals to the client that you’re serious about your business and that you aren’t afraid to go to court to fight for it.
Final Thoughts
It’s common knowledge that you need a contract, but it’s not always common practice. Don’t slack in this area, though! Do yourself the favor of drafting a contract today, and don’t take on any new clients without it. You’ll feel much better knowing you have legal protection, and you’ll also have the confidence of being an even more professional business owner.
