Why you Need to Start Using Contracts

October 13, 2015
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Speaking about contracts has been something I’ve avoided doing for a while, which is odd given that this is a website about the business side of the creative industry. It’s kinda an important subject isn’t it?

A reader called Sarah got in touch with me about this recently asking;

“One thing I have been thinking about regarding freelancing is how to set up a contract with clients. Not only the actual file and what it should contain but also how to use it?”

I’ve avoided the subject of contracts because I’m not a lawyer, I don’t have a killer legal team and I desperately don’t want to give any of you guys duff advice. That being said – and you must keep that in mind – I think it’s better for me to talk about what I do know and how I personally work, if only to get the ball rolling in your own head.

Just a heads up, on top of that disclaimer, you should also know I work in the UK, and whilst contract law is really similar amongst common law countries like the US, Canada, Australia etc… I’d always recommend doing a bit of research of your own to make sure.

So over the next three weeks I’m going to write three articles all about contracts.

  1. This one, about why you need a specific design contract and how to approach it with clients.
  2. How to actually write a design contract.
  3. How to use design contracts on your website.

So if this is something you need to hear then make sure you sign up to the newsletter to receive all of them.

I’m talking about this now because for a long long time, I didn’t use contracts.

At all.

I know there are a tonne of other designers out there that do exactly the same thing for one reason or another. They don’t use contracts because they don’t understand the legality, they don’t meet their clients in person, they can’t afford for a lawyer to write one up or they simply think it’s rude.

Don’t worry, I won’t chastise you. I can safely say I’ve have used each and every one of those excuses in the past to avoid using contracts; so when I say this, know it comes from a place of familiarity and self reference:

If you don’t use contracts you are a fucking moron.

Payment isn’t payment if you don’t have a contract

A contract outlines obligation and consideration. You are obliged to complete a task and the clients is obliged to offer you consideration in payment. Sounds simple right? But what if you don’t have a contract?

If you don’t have a contract, then you can’t prove obligation or consideration. Even if you do the work and even if the client pays you for it, that isn’t technically considered payment. If there was no legal obligation to pay you for your services then how can it be considered payment?

Do you know what we call payment without obligation?

A tip.

Without a contract, you are working for tips.

design contract tip

A contract is nothing mysterious

A contract is an agreement between parties that they’ll do things for each other. That is ALL there is to it. Everything else is just extras. At its core all a contract needs to say is “If I do this for you, you’ll do this for me”.

It doesn’t have to be signed in blood, it doesn’t have to be signed at all, in fact it doesn’t even need to be written down. Oral contracts are as legally binding as the ones delivered by bike messengers in leather wallets.

If you can prove that someone agreed to do something for you, in return for you doing something for them, then it’s a contract. The only reason we write them down and sign them is (ironically) to make it clearer.

With this in mind, chances are that you have unwittingly created a contract with every client you’ve every worked with. So long as you’ve got a copy of your email conversations with a client, then that can be used as a form of contract. Fancy that.

So why then, if we’re creating contracts by accident do we need to make up these formal agreements with our clients? Don’t worry – I’ll get to that.

The quickest way to scare a client

Say you head out today and buy a new mobile phone on contract, only there is no contract. You get the phone and promise to pay a set amount each month and the mobile phone shop agrees to give you the minutes, texts and data you agreed on, and that’s it. No paperwork, no agreement, nothing official.

Are you happy that you could potentially, at a whim, decide to just not pay and keep the phone? Or are you worried that this seems really shady and there’s nothing to stop this phone shop racking up the price down the line?

The truth is, most people are decent, and whilst there are a few people that would no doubt think about option one, there are far far more whose first thoughts will go to option two.

They will be scared that you are going to shaft them.

The exact same goes with your client. If you’re not bringing up anything about contracts then they will worry. They won’t be relieved that they don’t have to read the paper work. They will be scared that you are going to shaft them.

Also the phrase “don’t worry – your emails work as a contract” won’t instil the confidence in a client that it probably did in you when you heard it.

Contracts aren’t rude, they’re polite

The biggest barrier I probably had early on was that I thought bringing up the subject of contracts was really rude (and I’m English, so that’s especially difficult!). Here I was, scratching for my first few jobs, over the moon that a client was actually talking to me, and then what? I was going to demand they sign this piece of paper before I do any work for them? I reasoned that it was tantamount to shouting “I DON’T TRUST YOU” across the coffee table.

It’s not, just so you know.

They’ll be depending on you to guide them through the process, including contracts.

It is a rare thing for a client to bring up contracts. It’s part of your job as a professional designer. Many clients won’t know the various stages of hiring a designer, so they’ll be depending on you to guide them through the process, including contracts.

Bringing up the subject of contracts is probably one of the best things you can do to come across as professional and to put a clients mind at ease, and this is why:

A contract isn’t just for your benefit

It’s easy when talking about contracts to forget that they work both ways. We’re so focused on covering ourselves and making sure we get paid, that we forget about all the rights and reassurances a contract brings to the client.

The client is probably worried that you’re going to take his deposit and run. What if he doesn’t like what you produce? What if you turn out to be a total fake? I’m sure there must be a website out there for designers from hell.

Think about it – ultimately you’re just some dude they found online. You may have a decent portfolio, a pretty website and a few testimonials, but you’re not Amazon or Google. You’re not a sure thing. They’re taking a risk on you whichever way you spin it.

So when you throw out a signed piece of paper that says you guarantee that you’ll do exactly what you say you’re going to do; that is just sunshine and rainbows to a client.

A contract is not a guarantee

One last thing I’ll say in this article is that you should never consider a contract to be a water tight guarantee of payment.

Needless to say, you can spend a lot of money getting nowhere.

If a client doesn’t want to pay you, they won’t. Even if you have a signed contract, even if you take them to court, even if you win (which you will if you have a contract) all that means is that the court will say they must pay you and (in the UK at least) allow you to petition for the use of a council bailiff (who cannot, much like a vampire, enter a property unless invited). Needless to say, you can spend a lot of money getting nowhere.

A contract works as an utterly fantastic deterrent to bogus clients, and they’re worth their weight in gold for this reason alone. But you still need to make sure you vet your clients appropriately and trust that they’ll hold up their side of the bargain. But that’s a conversation for another day.

Remember, I’m going to be covering how to write a design contract next week, and the week after that I’ll be talking about how to implement contracts on your website, so to make sure you get notified when those articles go live, sign up to the newsletter below or follow the Design Range on Facebook and Twitter.

is owner of Hunting Town Design, a small design house based in Manchester UK specialising in Graphic Design and Illustration. Alex is also the founder and editor of The Design Range. Find out more about Alex on his website or follow him on twitter.
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