Friday, September 5, 2008

Signing Client Contracts: What to Watch For

Over at the Irreverent Freelancer today, I spotted a discussion on client contracts: do you insist on one? Will you sign a contract given to you by a client? If so, do you go through them with a fine-toothed comb, and is it OK to question the terms?

I usually give clients a contract of my own to sign--it's really more of an informal letter of agreement laying out my terms (and if you want to know what should go in your own letter of agreement, look here). But occasionally I get a client who wants me to sign their contract--either instead or in addition. I'm fine with this, but I definitely think it's necessary to go through it--and I have made change requests to clients before. If they refuse, it can be a dealbreaker. Here are a few things I look for in contracts clients give me to sign.

Non-compete agreements. Many clients will ask you to sign some sort of non-compete agreement. Much of the time, this simply states you won't give away company secrets to competitors. If they're a middleman client--like a web design company, ad agency or SEO firm--they may ask you not to work directly with their clients for a set length of time.

Once I was signing on to work as a copywriter for a web design firm, and the contract's non-compete agreement said I could work with no other companies that did work similar to theirs--this included web design, SEO, e-commerce of any sort--while I was working with this company. Obviously, this was a dealbreaker for me. I explained my situation to the client, and they were willing to take that clause out.

Payment only upon acceptance. Sometimes clients will put a clause into the contract stating they won't pay you if they review the work and find it "unacceptable." This is dangerous for writers. What constitutes "unacceptable" is hardly ever spelled out. Theoretically, it allows clients to simply decide not to pay you no matter how good a job you did. I will never take a project when the client insists on this clause in the contract.

When and where you can use samples of the work. This isn't a dealbreaker for me, but it's a good thing to be aware of. Every so often, a client won't want you to use samples from the project on your website or in your portfolio. Once I had a client ask me to sign a contract saying I wasn't allowed to advertise, list them as a client, or put them on my resume. I didn't really mind this--it was a well-paying, possibly regular project and I didn't see this as a reason to walk. But still, you need to be aware of it. Like Peter Bowerman, I often use samples without getting written permission first. If I had missed the fine print on the contract and then posted that particular sample, I could be in trouble.

A payment schedule that doesn't match with yours. I do 50% up front and 50% at the end of the project. Exceptions are rare--for a handful of regular clients I bill at the end of the month, and for some very large projects I'll spread out the schedule to three or more payments. But I almost always insist on an up-front payment. Client-given contracts rarely spell that out, so I make sure the client's fine with me adding the payment schedule into the contract.

Weird terms. Once I had a client give me a contract that said I wouldn't get paid unless I posted the sample of the work on my website, with links back to the client's site. The kicker? The client got to specify what anchor text I used as links. I didn't like giving clients this much control over what's on my own business site--especially in my sample section, where everything has to be just right in order to showcase my writing ability to best effect. I asked to take that clause out of the contract, and the client complied.

Lack of clarity about third parties. Sometimes you'll be working with a middleman--a web designer or SEO firm that works with clients of its own. If this is the case, it needs to be clear who you're working with. Some of my middleman clients ask me to talk directly to their own clients--and with others, I never speak to the third party. Other complications arise when your web design firm doesn't want you to give the client a direct quote, or when it's not clear who's actually writing your check. These are things that may need to be written into the contract, if not at least explained clearly to you.

Kill fees. These are more common in magazines and newspapers, but I had an online news site once that insisted on it. A kill fee clause states that the client has the right to pay you a percentage of the original fee--something like 20%--if they decide not to use your writing for whatever reason. I generally don't accept contracts with kill fees unless the project is an article that I would be able to sell to a different magazine--and I make sure the rights revert to me if the client decides not to use the piece.

Clients who don't want to give you their contact info or sign the contract by hand. This is just something to watch for whether you're using the client's contract or your own. Clients who won't give you their address and phone number, or who try to convince you that their typewritten name is just as good as a real signature, are definitely questionable.

There's no reason not to sign a client contract if your client is more comfortable with that. But you do need to read over it to ensure the contract covers your butt as well as theirs. I usually don't sign client contracts without some sort of change to ensure my terms will be honored--and I also make sure the project scope, timetable, cost, and other basics are clearly spelled out. Don't be afraid to ask for changes. If the client says no, listen to your gut. It may be OK to go ahead with the project anyway--I've done this before. But if you can't get your client to change a clause that really worries you, it may be best to pass on the project.


Anonymous said...

I completely agree with this post. Like you I have my own agreement that I provide clients, but if they prefer to use their own it's okay. But It is sooooo mportant to read their terms carefully so that you know what you are signing up for.

I like that you mentioned how you have successfully renegotiated certin terms a client may have included in their agreement that did not work for you (e.g non-complete clause) - I have never attempeted to do that, but will keep that in mind for next time. Thanks for that revelation!

Jennifer Williamson said...

It's definitely possible--and sometimes essential--to renegotiate terms. I think I'll write a longer post on that. Thanks for the idea!