How to write your own contract: Five terms you must include (and what they mean) - Autumn Witt Boyd
Does this sound like you?
Just found a great client but not sure what to put in your agreement
Made your own contract from forms you found online, but aren’t sure it’s really protecting you
Someone sent you a contract to sign but you don’t understand it.
These five terms are key to every contract and will protect you and your business from many misunderstandings or disagreements.
1) DETAILED LIST OF PRODUCTS OR SERVICES
Step 1: Every contract should spell out exactly what each side is agreeing to provide or do. I suggest you get as specific as possible so there are no questions, or scope creep, later. Examples:
For a life coach, include the number of sessions, how long each one lasts, and whether you’ll provide email or phone support between sessions
For a graphic or web designer, list every deliverable (e.g., logo, label design, letterhead, business cards, number of pages on a website) and how many revisions are included
For an event planner, specify every service (e.g., overall event design, number of vendor
meetings or site visits, creation of timelines, vendor contract review and follow up,
specific services on day of event)
For a seller of physical products, describe each product by color, size, type, etc.
2) ITEMIZED AND TOTAL COST, WITH PAYMENT DEADLINES
Since you’ve broken out exactly what you’re doing, selling, or buying in Step 1, the next step is to make sure there’s a price for each item, deliverable, project milestone, or service. This will save you trouble down the road; if either side wants to end the contract, it will be very easy to calculate what is owed by looking at what’s been provided up to that point.
If a deposit is required or payment can be broken up into multiple installments, those should be spelled out here, with clear deadlines and any late fees.
3) REFUND POLICY
Now, Step 3: what happens if one party wants to end the contract early? Whether refunds are offered or not, your contract should have a refund policy. Examples:
No refunds, ever: All deposits and payments are nonrefundable.
No refund for what’s been provided up to that point: In no event will Provider issue a
refund to Client for Services or Products provided prior to the date of termination.
Refunds for unused services: If Coach or Client terminates this agreement, Client will
receive a refund for the unused portion of the package.
4) HOW TO END THE RELATIONSHIP
Despite everyone’s best intentions, sometimes one (or both) parties to a contract decide to part ways. Step 4: you should include a term that says what happens in that scenario, and any requirements about how notice must be given. Examples:
If you want either side to be able to exit the contract easily, with no notice: This agreement may be terminated at any time by either party effective immediately upon notice, or by the mutual agreement of the parties.
If you want either side to be able to exit the contract easily but with a little notice and in writing: Either party may terminate this agreement, for any reason, with 48 hours written notice.
If you want only one side to be able to exit the contract easily, with no notice: Provider may terminate this agreement at any time, in its sole discretion, without advance notice.
If you want to make it very difficult for one side to exit the contract: Client may request to terminate this agreement in writing stating good cause for termination. Provider must approve any request for termination, and may be deny termination in Provider’s sole discretion. Client must provide 60 days advance notice of any request to terminate.
5) WHO OWNS WHAT?
If either party to the contract is sharing content, or creating something new (e.g. inventions, technology, photos, music, videos, graphics), in Step 5, your contract must spell out who owns it – just one person, both people, or a company? This can get very tricky based on the different intellectual property laws, so consulting an attorney is best unless both parties will own all content 50 / 50. Examples:
If one party already created something that’s being used as part of the relationship: Client acknowledges that Provider owns, or has permission to use, all copyrights, trademarks, and other intellectual property rights in any written or online materials, workshops, or videos that may be used during this agreement. Provider hereby grants Client permission to use these materials for the purposes of this agreement only. Client agrees not to copy, share, sell, or distribute any of these materials.
If both parties wish to co-own what’s being created 50/50: The parties acknowledge that they are co-authors of any content that may be created in furtherance of and during the term of this agreement, and co-owners of any copyrights, trademarks, and other intellectual property rights in that content.
I’d love to help get your business legally legit. Learn more about scheduling a GET PLANNING legal planning session here: http://awbfirm.com/get-planning- session/
Autumn Witt Boyd hosts the Legal Road Map podcast, which helps business owners protect their rights and stay out of legal hot water, so they can confidently build their dream business. Autumn is an experienced lawyer who helps creative entrepreneurs with growing businesses solve their business, copyright, and trademark issues. She loves helping creatives get started on the right foot, create airtight contracts, and understand their legal issues in plain English. She has special expertise in registering copyrights and trademarks and advising clients on intellectual property matters.
*This information is attorney advertising and does not establish an attorney-client relationship, which is only formed when you have signed an engagement agreement. This information is based on U.S. law.
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