How many of you have taken on a new client without a contract because you thought you didn’t need one? Did you later regret it? You’re not alone. Truth moment – in the early days of my business, I didn’t have a contract. Luckily for me, I’ve never had a situation that I wasn’t able to resolve. But the fact remains that contracts are a necessary party of business. Contracts are even more important in the creative industry where a lot of things can be left up to subjective interpretations. If you’re looking to get a basic contract for your creative business, here are some things you need to include. Disclaimer – I am not a lawyer and none of this post should be taken as legal advice. Consult a lawyer to ensure any contract is legally valid and appropriate for your business.
The Basics
To put it simply, contracts are voluntary promises between two parties that can be enforceable by law. Although contracts can be verbal, I highly encourage you to create a written contract. In order for contracts to be legally valid, at minimum there needs to be consideration, which is an exchange of value between two parties. This includes money exchanged for a product or service, product exchanged for product, or even services being exchanged. Written contracts should be signed by both parties who have the mental capacity to engage in the contract. It should go without saying that contracts can’t be made for anything that’s illegal. There are four categories of items that should be included in every contract.
Basic Terms
This is the easy part and clarifies who and what is involved and the basic agreement:
- The parties involved
- What is their relationship to each other
- When does the contract begin
- Contact Information (address/email/phone numbers)
- The purpose of the contract
Business Terms
This is the specific part of the agreement and outlines what is being exchanged:
- Who is delievering the goods/services
- Who is paying for the goods/services and dollar amount
- How long the contract is good for
Foundation Terms
This where a lot of the nuance of contacts starts and it’s important that it covers things you may not be even thinking about. A good lawyer will make sure you’re including key aspects of your contract here.
- Any definitions for specific words (i.e “Company”, “Client”, “Independent Contractor”, etc.)
- Any delieverables
- How the contract can be terminated, who pays if it’s broken, and what happens next
- What “body of law” (state, federal, etc.) will govern any disputes or if necessary litigation
Housekeeping Terms
This section is for all those things that don’t fit neatly into any of the categories above:
- Contact information/office hours
- What happens in the effect of any unforseen circumstances
- Confirmation that those signing read and understand the agreement
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