4 Reasons Why You Need To Start Using Contracts Right Now (Free Contracts Included)

Zwielicht

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Contracts, contracts, contracts. People always tell you that you need to use them, and you may or may not have ignored their advice, but do you really know why you need to use them (aside from the obvious legal issues)?

Let me tell you a story: roughly 2 years ago, I had a web design client who was referred to me. I met with this client at her home-based hair salon and began showing her my web design portfolio, which she liked so she subsequently hired me to build her a custom website. At the time, I only used a very basic contract covering a few legal area (e.g., she owns the domain), but it didn't actually outline what the service plan was or go over anything else in detail.

Anyway, a few weeks later, I finished building the site, so I sent her an e-mail and she "loved the new site", but then she requested a few small changes to the website. At first, this wasn't an issue, so I went ahead and fulfilled the additional requests. However, after some 30-year old college student "web designer" started talking to her, she began requesting more & more changes that were also becoming difficult to implement without redesigning the entire website. Eventually, I contacted her and told her that I was no longer going to work on the website after the college student deleted everything to install an unmodified $30 Wordpress template over it (you can read the original thread from 2013 here. I received some great advice and a few good laughs from it).

After this situation, I revised all of my contracts to be more specific than they were before to prevent another issue like that one from happening again, and since then I've had very few issues with my clients. So, if that story wasn't a good enough reason for you start using contracts, here are 4 more reasons why you should start using them right now!

4 Reasons To Use Contracts
Reason #1: You Can Prevent Legal Issues From Arising
This one was already obvious to most of you, so I'll keep it short. Using PPC management as an example (as most people become litigious when money is directly involved), if you were to take on the assignment of managing a client's Adwords account without a contract (that is, without establishing when money will be withdrawn from the client's account for the campaign or any third parties that will be involved in the campaign), a disgruntled or otherwise less-than-happy client can easily say you were siphoning funds from their account without their permission or giving others access to their funds. While of course this situation can be refuted with proof that the funds went directly to the campaign, using a contract can at least prevent client's from becoming unscrupulous.

Reason #2: You Can Use Them To Outline Your Service Plan
Instead of inundating your client with big, scary legal terms that they probably don't understand, you can instead use your contract to simply outline what you plan to do for them. This helps prevent confusion in the future between you and your client and it also provides you with a simple way to answer any questions the client may have as you can just point them to a specific section in your contract that answers the question. Additionally, you and your client can sit down, discuss, and review your plan and agree on any modifications before both of you sign the contract. Speaking of modifications...


Reason #3: You Can Prevent Clients From Surprising You With Extra (Unpaid) Modifications Or Work
Also known as scope creep. Don't be surprised if this happens to you at least once, that is if it already hasn't. If you don't set limits in your contract and follow your outline strictly, your new client is going to take you on a ride, and I promise you that it won't be pleasant. This is probably one of the most important elements to include in your contract as many clients will try to squeeze as much work out of you as they can, and you may just go along with that work out of fear of losing that client if you don't have a written agreement prohibiting unpaid modification or extra work.

You can also use this as an opportunity to turn the tables and add a section into your contract where you can charge your client for any extra work they request.

Reason #4: It Helps Your Client Take You Seriously & Puts Them At Ease
Let's think about this from the client's perspective, but instead of using SEO as an example, I'll use a hypothetical communications platform called "jaloombaba" and a marketing service called "jaloombaba optimisation". Now, assume you're a small business owner who doesn't know much about jaloombaba outside of using it to communicate. You were recently contacted by a jaloombaba optimiser who wants to "take your business to the next level" using the platform, which piques your interest, so you set up a meeting with this purported jaloombaba specialist. After a nice friendly chat, you request to see a contract where you can learn more about marketing on jaloombaba and what the optimiser plans to do, but the optimiser just says, "Uh, I don't, like, have one, man. I, like, usually just get the payment first and then, uh, work on the jaloombaba optimisation, brah". This joker essentially just walked in, talked to you for a bit, and then requested money. Now, let me ask you, would you take the risk and hire this guy for a service you don't completely understand?


Free Contract Templates

These contract templates were all used by me at one point in time (with most of them admittedly being taken from other sources and then modified a bit), but now I don't use most of them any more as I either no longer offer the service or I use different contracts for my business. You'll have to modify them yourself by adding your business name in them as well as any additional clauses. I'm also not a lawyer, so you use these contracts at your own risk.





 

TheVigilante

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The contract files should come in handy once I decide to go this route.
 

ChanzGrande

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Love it. Can't argue with any of your reasons why we need to be using contracts in our businesses!

Your personal experience definitely speaks wonders to the importance and value of implementing this simple solution that works at so many levels to keep your business own track. So smart really.

People might see it as extra work, and at first it might be challenging or hard to implement, but once it's just part of your process - it's value will far exceed these initial hiccups. Additionally with the templates you referenced it shouldn't be that hard for most of us to start using them straight away if we choose.
 

ugjunk

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It varies, contracts are great if you are looking to grab big customers, but for smaller customers it's not worth going through all the hassles. Personally I had experiences in the past where contracts have saved me big time, but at the same time, contracts for small customers can get real expensive.

Also, not all the customers would be comfortable signing a contract, so you need to decide if you want to still take them on board or skip them.
 

M4XW3LL

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Thanks for the great share. You always offer value in your posts Zwielicht.
 

clevelandslim

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Always thought contract would prevent me from legal issues but never thought that contract can be used for so many works.. Thanks for the nice share.
 

Cross99

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Great share OP! Waving a few contracts under a potential clients nose gains yourself considerable credibility.
 

Reaver

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After reading the thread you linked to, I'm only reminded of why I stopped doing content writing.

I've dealt with idiots who expected the moon bc they refused to sign a contract, and I was desperate for work. "Can you write 3 eBooks in a week for $2.00 a page? You'll have to do your own research and come up with the content yourself." Um...no.

So I tried raising my prices. Then I got "Your prices are way too high. I can get on Elance/Fiverr/whatever cheap site I want and get that same article for $1." I always replied with "Then go do it." Seriously, if you don't value my skills or you can get the work done for cheaper, get out. Or better yet, do it yourself for free. But no, you're too lazy to do that, aren't you?

There are tons of clients who will sign contracts. They understand the value of them on so many levels. They don't mind doing it. In fact, they expect it. Those are the ones who will pay the price you ask and stick with you. Those are the kind of clients you want, not the ones that are to cheap or stupid to know that a contract is a protection for both of you.
 

Disloyal

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Good stuff , bro. One of my first clients screwed me for over $1,000, she was refered to me by a good friend of mine and she didn't want to be tied to a contract. So, I said what the heck she looks like a trusthworthy person she won't screw me.... so me being nice I agreed.

Long story short she never payed me..... when it comes to business, use a contract so you don't get screwed!!

Zwielicht, this will help a lot of guys here including myself as I will glance through to see what else I can add to my contract or am missing.
 

theRevolt

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This should be common for every business and sure some will find this useful, but keep one thing in mind :
- As a lot of people work with clients in other jurisdictions the contract might not be worth much. Imagine having contracts with anybody from say China, Russia(or any other far away country without proper enforcement) etc. When something goes wrong good luck collecting anything, where big corporations have not even been able to control the copyright violations easily.
 

MacArthur

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Much needed one.. I think the 4th reason is the best among the lot.
 

archon10

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It varies, contracts are great if you are looking to grab big customers, but for smaller customers it's not worth going through all the hassles. Personally I had experiences in the past where contracts have saved me big time, but at the same time, contracts for small customers can get real expensive.

Also, not all the customers would be comfortable signing a contract, so you need to decide if you want to still take them on board or skip them.

If they won't sign a contract, you don't want to work with them. Scope creep happens a lot, and if you don't define what you'll do for a specific price, you'll find that the "easy" app you thought would take a month to code is now 6 months into development because you let the client determine the workflow.

bad bad advice
 
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