Why You Need a Written Client Agreement and 5 Key Provisions to Include

Congratulations, you’ve got a client.

You chat on the phone and maybe even exchange an email or Facebook message (or two) about your services. And then you get started. Because you’re pretty sure that you’ve agreed to everything. Isn’t that what owning a business is all about – jumping right in, providing your services, and earning money?

Sort of.

Did you have your client sign a contract or client service agreement?

If your answer is anything but “Yes” – what happens if your client doesn’t pay? Or you find out that she’s passing those worksheets you worked so hard to design in Canva out to her friends…who aren’t your clients? Or she asks for a refund?

Look, I get it. You don’t want to think about what happens if things don’t go smoothly. Who does? We’d all like to think that we’ll only work with amazing clients who receive immense value from the services we provide. But being a small business owner isn’t all sunshine and rainbows. The truth is, you will have difficult clients. No matter how amazing your services are. That’s the life of a small business owner.

And that’s why YOU NEED TO GET YOUR AGREEMENT IN WRITING! As in, you need a contract.

Everything I chat about here is intended to provide legal information and education. It is not business, financial, or legal advice, and does not create an attorney-client relationship between us. I’m an attorney licensed in the United States, so everything will be from the perspective of United States law. You should consult with an attorney in your area who understands your particular business situation so that you can take the right steps for you and your business.

What’s a contract?

In broad terms, a contract is a set of promises. One person promises to do something in exchange for something else from the other person. Contracts can be oral or written. And both can be legally enforceable.

BUT proving an oral contract can be a pain. Because it comes down to a lot of he said/she said.

To complicate things, each state has differing laws about what contracts have to be in writing.

In my opinion, a Client Agreement is one of them.

Why? Because if any issue should arise, you have your agreement between client and company to fall back on. Emails, Facebook message exchanges, and recollections from phone calls need to be pieced together and it can be difficult to show a meeting of the minds.

So, I repeat – GET. IT. IN. WRITING.

And if you’re not sure WHAT to get in writing, let’s chat about the:

5 Key Provisions Every Client Agreement Should Include

1. Scope of Services

What services are you agreeing to provide? You want to make sure that you include a scope of services provision that explains exactly what services you’ll be providing for your client and describes the method by which you’ll be delivering them.

2. Payment Schedule

Be sure to include a payment schedule. Whether you require full payment to be provided up front or accept installment payments, make sure that it’s clear to your client. You’ll also want to discuss things like late payments if you accept installment payments and your refund policy (even if it’s that you don’t offer refunds).

3. Intellectual Property Protection

Remember those worksheets we talked about earlier? What about all the other materials that you created that you might provide to your client – like videos, photographs, or other files? You want to make sure to include a provision that addresses your intellectual property rights and outlines exactly what your client can (and can’t) do with the materials that you provide.

4. Disclaimer

You want to make sure that you include a provision that limits your liability and releases you from claims so that you are not exposed to any undue risk, i.e. a disclaimer.

5. Dispute Resolution

And, if a dispute occurs, what state’s laws will govern your Agreement’s interpretation? What state’s courts will have jurisdiction over the dispute?  You want to be sure to include a provision that doesn’t require you to travel to Timbuktu if (knock on wood) an issue does arise.

Drafting a Client Agreement

While these 5 provisions are must haves for your written Client Agreement, be mindful that this is NOT an exhaustive list. There are other standard provisions that you should include to make sure you’re legally protected.

I know, I know, it sounds complicated. But wouldn’t you rather have it all spelled out from the beginning if something does go awry? Because if you’ve thought those worst-case scenario “what ifs” through, you’ll feel more confident in both your business and your services.

If you’re thinking, “Where do I even begin with drafting?!” Don’t worry friend, you can snag an attorney drafted client service agreement template here.