You are a freelance web designer starting off with a new client. Whether it is a simple web page or a multi-function web application, you need to clarify your terms and conditions regarding your freelance term at their company. It is best to have a comprehensive set of terms to agree upon before you have begun your work. Setting a few simple rules upfront can save you from a lot of trouble in case there is a dispute.
Clients often require you to sign a Non-Disclosure Agreement (NDA) to protect their Intellectual Property (IP), including what you are about to create for them. Whether or not you are comfortable with signing an NDA, you must push forward to get your own Terms of Service (TOS) signed from the client. You have complete right to set the ground rules before you begin your work.
This, off course, comes with a bit of responsibility. Not many people are actually aware of how the web functions and how you plan to deliver the results. Therefore, you must be adept in educating the client along the way. A level-headed one-on-one with the decision makers often does the trick.
Terms and Conditions
In my experience, most disputes with clients come down to a few issues that can be avoided with a mutually signed agreement.
The problem lies in the fact that very few designers are familiar with legalese, which is only legible to solicitors. This provides a potential problem with designers as they do not know how to communicate their terms in a codified document.
First, let us break down the few basic tenants of the agreement.
Billing Phases
Defining the billing phases in advance makes sure you get paid on regular intervals. As a freelancer, you have the complete right to decide how you wish to receive payment for your work. There are a few billing methods for you to choose from, depending on the project and the client.
- The Beginning and the End Method: If the project is small and deliverable within a few weeks, you can choose to take an advance and charge the remaining balance at the point of delivery.
- The Milestone Method: Milestones of the project need to be defined in advance for this method to be functional. Your initial proposal and the design specification needs to specify the milestones clearly. When you reach a certain stage of design/development and get the client to sign-off your progress, you will be able to invoice the client. Say you were hired to design a website with five distinct templates and follow up with Front-end Web Development. You can call the design phase your first milestone. That is, when you finish the designs and get them approved, you can go ahead and send an invoice. You can then proceed to the next phase, the coding.
- The Periodic Method: The other method is to charge the client for any work you have done, regardless of the project phase, at a predefined time – either weekly or monthly. Such an arrangement can be made when you are hired to work in a large project and you would essentially be Permalancing1 for the client.
The legal framework should make it mandatory to maintain constant communication with the client regarding the invoicing and payment, because the client needs to approve the phases of the project and sign-off on the progress made before you are allowed to send invoices.
You may even want to create documentation for a written sign-off which will give you the permission to send invoices. I always find that a written sign-off carries more weight than a verbal confirmation, as well as removing any chance of a future conflict.
Revisions and Alterations
It is common for designs to go through significant design changes over a period of time. More often than not, the product at launch barely looks like the first presentation. The design changes are an evolutionary progress for betterment of the overall product.
Unfortunately, some clients will assume that all erratic design changes they make at the last minute, which obviously extend the time-line of the project, are part of the original price quote. Therefore, you need to inform your client that all major design changes, which requires additional work from you, must be compensated for. You also need to stipulate the point explicitly in the contractual agreement.
In my TOS document, I classify “Revisions” and “Alterations” as two distinct acts.
- Revisions are small design changes requested during a review process. The marketing guys and the decision makers will request a plethora of changes once you have submitted your work. These change requests often require very little effort from you. Imagine questions like “Can you make the logo bigger?”.
- Alterations on the other hand, are major changes to the design specification once the primary work has already been done from your end. Imagine the client expanding the scope of the project and asking for whole new features and functionality.
When the client requests new changes to design that require significant additional work, make sure you get them to sign-off a revised estimate before you get to work. Basically, you need to make sure that you are paid for every additional hour you put in.
You need to make sure that clients do not assume that all design changes are part of the original estimate. Do make strong point to mention that you will be charging extra for all major changes to design.
Ownership of Artwork
The client will absolutely want to have complete Intellectual Property rights to everything you design and develop during your contract. It is only fair that you give them the exclusive rights to the IP you create for them.
You also need to make sure that the original artwork you create or buy (from stock photo sites, etc.) are owned by the client and that you are protected from all future claims regarding the usage of such material.
Promotional Copies
The fact that some clients will ask you not to show off your work in your own portfolio is ludicrous and must be countered.
You must be able to hold on to the artwork you create for the client for an infinite amount of time and may use samples of your work for your own use, such as your portfolio.
Some clients will ask you not to place images of the websites until the projects are launched, even after your work had been done and you are no longer working for the said client. This is a debatable topic and it is entirely your prerogative.
Late Payment
Every freelancer’s nightmare is when the client does not respond to emails and phone calls, or creates extravagant excuses for delaying payment. As a freelancer, you must protect yourself from such clients and avoid going into financial difficulty.
It is better to take preventive measures and include a rather strongly worded clause in the agreement with your client in advance.
I like to give my clients 10 days to fulfill their obligation to make the due payment. This should be enough for most companies as I tend to send my invoices at the end of the month — and they usually do their payroll at the beginning of the next.
However, if the client fails to make the payment with the said period of time, I allow them a 21 day ‘Grace Period’ for making the payment in full. Failing to pay within the 10+21 days will result in a compounding late fee — which gets worse by the day.
I have had to resort to a Debt Collector Agency only once in my career and I can tell you from my experience that chasing bad clients for money is not fun. So make sure you have a bulletproof contractual agreement in place right from the start to avoid getting into such tight situations.
External resources:
- What You Should Say to Your Client When their Payment is Delinquent by FreelanceFolder
Download Sample
If you are looking for the entire document compiled and formatted, download the MS Word 2011 document.
Conclusion
I suppose all bases are now covered that guarantee you to retain the necessary rights, at this point.
This contract is by no means a proper legal document. It has evolved over the last three years as I worked for one client after another. If you are looking for more professional contracts, please seek legal advice.
I understand that many talented designers and developers are afraid of the legalese and do not really know how to bootstrap their freelance business. I hope that this template will offer some insight on how to draft a contractual agreement.
If you have any remarks regarding any of the points covered above or if you have further points to suggest, please leave a comment.
- What is Permalancing, you ask? FreelanceSwitch has an excellent explanation. [↩]