Client Contracts | Business Contract Lawyer
A consultant gets off the phone with a client, frustrated at the workload ahead. His client wants and expects significantly more work than the consultant signed on for, leaving him with a choice: overwork himself, suddenly increase his fee, or end up with a disappointed client.
An event coordinator stares at their balance books, trying to account for a last-minute wedding cancellation. Without a defined refund or force majeure policy in place, they have no choice but to return their client’s deposit and throw all their work out the window.
The owner of a construction company sleeps easy. After her company was hired to repair house damage after a tornado, the homeowner didn’t send payment. But with a rigorous payment schedule and collections procedure in place, she knows she’ll get what she’s owed.
What do all of these situations have in common? They all stem from the presence (or lack thereof) of a quality client contract. After entity formation, a client contract template is the best way to protect you and your business. The benefits differ for each business owner. Every business has different processes, risks, and liabilities, so customization is key! A solid contract addresses your unique set of concerns. With that in place, you can free up all the time you spend putting out fires and worrying about what else might go wrong. It lets you focus on the fun parts of growing the business.
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Who needs a client contract?
Before we can answer that question, we need to define what a client contract is. A client contract outlines the services or products to be provided and includes payment terms and other important protections. They also go by many other names, including Services Agreements, Engagement Letters, Master Services Agreements (although check out our livestream about why “Master Services Agreement” might not be the best choice), less formal monikers like “terms and conditions”, and a number of industry-specific terms (Consulting Agreements, Production Services Agreements, and more). Essentially, your contract forms the foundation of your relationships with those who hire you.
So, who needs a client contract? More businesses than you might expect! Broadly speaking, service-based businesses or businesses with ongoing relationships with clients benefit the most. Client contracts offer protection to a wide variety of businesses, including software consulting firms, marketing agencies, staffing companies, production companies, wedding and event planners, interior designers, gyms and personal trainers, makeup services, construction, health and wellness professionals (therapists, doctors, dentists, etc.), architects, education businesses, consultants of all types, tutoring, graphic designers, landscapers, lawyers (yes, us too), logistics, photographers, rental companies, and even disaster cleanup services. A client contract provides instant feedback to clients and helps avoid costly litigation. Wherever there is room for interpretation in your business dealings, a well-written client contract will prove useful. And with the help of a G & G Law business contract lawyer, you can have one in use before you can say “Limit my liability.”
How can a custom contract help your business?
Obtaining a client contract may seem like an inordinate hassle and onerous formality. But operating on handshake deals, verbal agreements, and good faith leads to more trouble than it’s worth. A strong client contract confers four main benefits:
- Protect your business. A client contract is the best way to protect your business from all sorts of risks. You can insert liability terms to protect your physical and intellectual property, prevent scope creep, and more. When well-written and properly customized, it addresses the concerns that are important to you.
- Streamline processes. Client contracts also make your business run more smoothly. They lay out your work process, weed out problem clients, and make expectations crystal clear.
- Get paid. Worried about getting paid? Who isn’t! A client contract can define payment processes, cancellation procedures, self-remedies to avoid litigation, and even include language to let you stop work if payments are late.
Gain respect. A client contract adds to the professionalism of your business. Having your own contract in place improves your business’s image and helps clients trust that you’re serious and competent.
What are some important contract terms?
Because each business contract is an extension of that business’s priorities, contracts are as different as the businesses they come from. Still, while terms vary, there are few standard provisions commonly included, such as:
- The names of the parties. Make sure to use your full business name, especially if you have an LLC or corporation. You need to use your business name to benefit from the liability protection they confer.
- Termination language defines who can terminate the agreement and lays out termination procedures.
- The scope of services, simply a description of the services to be rendered.
- Any client responsibilities, outlining anything that you need from the client to perform your services.
- Payment terms, such as:
- When payment happens and how.
- How to handle non-payment or late payment.
- An invoice process and approval process. This helps keep clients from disputing the invoice later, which a lot of clients do when they don’t want to pay.
- Intellectual property provisions to assign ownership of any work product.
- Confidentiality terms to protect sensitive information.
- Liability protection.
- How and where to handle disputes. Examples include mediation, arbitration, and court.
- Various “Boilerplate” terms, like how the contract can be amended.
We said it before: customization is key! A business contract lawyer with G & G Law can create the right client contract for your business, providing you with the protection to conduct your business in your own way.
How to write a client contract
The “don’ts” are just as important as the “do’s.” We see a couple of big mistakes over and over again. Often, following a couple of tips could have prevented a lot of this heartache:
- Don’t just start drafting!
- Don’t just pull a template that you find on the internet, or from another company. It might have processes that are completely different from yours and might handle situations in a way that you don’t want to.
With those words of warning in mind, how do you actually draft a client contract? The first steps are to:
- Determine your goals.
- Write out your business processes and procedures, highlighting major sticking points.
- Consider the major risks involved and how to mitigate them. These depend a lot on the industry.
Make sure your contract encompasses your processes and services, risk mitigation, and other important terms we’ve discussed.
What’s our business contract lawyers’ process?
When you work with a business contract lawyer at G & G Law, we make it as painless as possible. First, we send you a simple questionnaire to gather the information we need. Then, we have a call to walk through your services and help you prioritize your concerns. In this call, we help you step by step to figure out what each section should say and prepare your business for potential issues. Most of all, we listen to your needs to make sure we address them.
Once the first draft is completed, our attorneys will send it to you and have a call with two goals:
- Make sure that each provision aligns with your priorities.
- Educate you on what each section means and empower you to work with the contract. We want you to be able to follow the processes, explain the contract to your clients, and make any changes as they come up.
The contract is drafted as a template so you can use it for all your clients with minimal changes. We make it as easy as possible to work with – we know how important a streamlined sales process is to a successful business!
Plus, drafting a client contract with us has the added bonus of establishing a long-term relationship with G & G Law. We get to know you, your business, and how your business operates. This helps us handle future legal questions, issues, and needs more efficiently going forward.
What are our fees for client contracts?
Our flat fee of $2,640 includes drafting a client contract template, making 2 rounds of changes, and discussing it with you. It does not include negotiations with your clients, although we would be happy to discuss expanding the scope of engagement to help with this.
This fee applies to non-regulated industries. Fields like construction, cannabis, medical professionals, and others have to comply with extra regulations, which means that we need to put more work into drafting the contract.
When should you hire a business contract lawyer to write your contract?
Some businesses hire a business contract lawyer when their clientele expands beyond “friends of friends.” Sometimes a problem makes them realize that their contracts need updating, hoping to prevent this problem and others in the future. Other times, a business needs one from the get-go; perhaps they’re very risk-averse or deal with high-end or enterprise clients.
That said, we recommend you take care of it as soon as possible! The longer you operate without the right contract, the longer you expose yourself to unnecessary risk. The right contract provides structure to your business and comfort to your clients. At G & G Law, we’re standing by to help you with yours. Reach out today to get started!