Your written agreement

Written (and then signed) agreements are not just a good thing to have, it's an absolute necessity when it comes to working with clients. You need to get everything agreed to before starting work or else you can find yourself in a bind on down the road. Here a few tips of things that I like to include on my agreements. Please note that this is absolutely note an exhaustive or complete list!

1. Services to be performed. This is simply spelling out what you will be doing so both sides have a clear idea of what is going on.

2. Term of the agreement. The start of the term is typically when both parties sign and you have a signed copy, though it could be later but never earlier! If the project has a due date, use that as the end of the term. If you're going to be working long term, set an end date anyway. It could be six months or a year out. This benefits you because at the end of the term you can renegotiate your rate if you're doing good work (you are doing good work, right?). Let's say for example that you're working for company A at $50/hr, then start working for company B for $75 a month down the road. With an end date to the agreement, you can either negotiate company A up to a level closer to B's or simply walk away and give more hours to B at their higher rate..

3. Rate. I typically (99% of the time of the past 14 years) bill by the hour and note that I bill in 15 minute increments on the agreement.

4. Payment terms. As a contractor/freelancer, you won't be on payroll so add in something about your expectation of payment. Do not expect that you will get paid on time if you give the client a 15 day lead time. Usually, 30 days is a good amount of time to expect payment. You can always add a note of a discount for prompt payment. Sometimes that will spur a payment, but not always. Your invoices should also show expected payment terms.

5. What is and is not billable. Will you be providing items to the client that costs you money, like custom printing, postage, etc? Be sure to spell these things out. If you don't anticipate these costs, spell that out too so you make the expectation very clear. Typically, items are charged either in Time and Materials or Cost Plus 10%. It's up to you which works better depending on the client expectation. Other things to make note of is travel time, electronic communication and phone calls. Personally, I don't charge for phone calls unless they exceed 15 minutes in length. I don't charge for emails/texting/other electronic communication either. I only charge for travel if it's going to a specific site other than the office I will be working from, like a job site for an inspection for example. Some clients have me travel by air to customer locations and that is another matter entirely. Regardless, I cover that in the agreement as well.

6. Status as an independent contractor. Include verbiage that the client will not withhold any taxes on your behalf and that you will be responsible for paying all the applicable taxes.

I also like to add a note about confidentiality and intellectual property assignment. These don't necessarily benefit me, but I like to think that they help the client and gives them an assurance that I won't be talking about them after the project is over or stealing their ideas.

Note:
Nothing in the blog should be taken as legal advice.


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