Join Terry Lee Stone for an in-depth discussion in this video Anatomy of a contract: Part one, part of Running a Design Business: Designer-Client Agreements.
Contracts, like creative businesses, can vary depending on personal style and the nature of the work, but generally speaking, I will present a tried and true structure that you may want to adopt or adapt for your practice. There are five elements or components in a Designer-Client Agreements: General Info, Descriptions, Compensation, Fine Print and Signatures. Each of these are pretty straightforward; I am going to break them down in detail in upcoming movies. I would like to note here that what I refer to as Part 1 of your agreement, which is General Information, Descriptions and Compensation will change for each agreement that you write.
While Part 2, which is the Terms and Conditions and a line for the client's Signature, will pretty much remain constant from project to project. First, you are going to need to design a branded contract template document that is similar to your letterhead. It should have your business's name, address, phone number and email on it. Label the document with the word Proposal or Agreement or whichever name you've decided to use. Make the name bold and obvious, because it might look a lot like your invoice. Each time you create a Designer-Client Agreement; you will add the date and address it to your client contact.
It is wise to put an actual person's name, not just the client company name, on the document to make it clear who you're doing business with. This could be very important in the case of a dispute or if your client contact person is fired or released during the project. When I say Descriptions, I mean two kinds of information, the Scope Of Work or SOW, which is what you'll do, that's mandatory. You and the client need to know what work is included in the agreement and also design process breakdown, which outlines how you'll do the work.
Typically this is detailed in phases. It's not mandatory, but it's a good idea to include process information, because it helps the client know what to expect throughout the project. Breaking down the work in two phases describes what you will do in each. This also helps you track the work from a project management standpoint. Describing the work in phases makes the creative process more understandable to clients. It also allows clear demarcations for approvals, invoices and payments, as well as logical points to end the working relationship if things turn sour.
This idea of phase breakdown is covered in more detail in Chapter 2 of this course. The Scope Of Work is typically a one paragraph description of the project. It should be specific enough to ensure that if there are major changes in the project, you can renegotiate. Also, I recommend that you tell the client how many rounds of revisions and/or changes or modifications are included in the Scope Of Work.
- Understanding the anatomy of a contract
- Scoping the project
- Estimating your costs
- Subcontracting work
- Heading off problems