- Always, always put your agreement in writing. Even if you plan to work with your friend of twenty years, put your agreement in writing. I have seen numerous relationships sour over money, even though the parties were friends or worked together for decades. Think of this agreement like a prenup: it is better to work out the terms of the unthinkable now, when you can’t wait to be together, than later, when you may end up squabbling over useless items because you feel wronged.
- Scope of Work– Be sure to specify exactly what is included under the Agreement, and if there is potential confusion, describe what is not included. If additional phases of the project or changes will incur additional costs, discuss what those costs are, and how they will be calculated.
- Example: If your Agreement allows for a certain number of drafts or changes, identify the amount. Otherwise, the client may request endless proofread and edits. This is especially important if the project is on a flat-fee basis.
- Identify the hourly rate or cost per item for any incidental charges or additional changes to the project that the client may request.
- Amount of Retainer– Specify the number of payments and the amount of any deposits you require. For larger projects, you may want to arrange to get paid a portion of the total amount after certain milestones are achieved. This also keeps the lines of communication open as to the client’s satisfaction with the work performed.
- Practice tip: Include a description of costs that will be passed on to the client, such as parking, mileage, postage, printing, etc.
- Choice of law clause– This clause is especially important if you are doing business with a client in another state or country. It means that the Agreement is governed by the laws of the state you choose. If you ever need to bring legal action to collect money from your client, do not leave it up to chance to have your case heard in a foreign jurisdiction. Choose a state in which it will be easy for you to hire counsel and attend court hearings, if necessary.
- Signatures of the parties– When parties put pen to paper to sign an agreement, it adds an additional level of formality to the process. It is much more likely that the parties will be aware of the terms of the agreement if they put their signature on a formal document, than when they are communicating more casually in an e-mail or over the phone.
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