Client contracts are so important as they set out from the get-go everything the client needs to know about your relationship with them, what they can expect from you, and more importantly what you can expect from them.
Before I get into it, it’s important to add that a client contract doesn’t have to be full of jargon. It can be friendly, approachable and sometimes, a joy to read! That’s called legal design and is something we do here at Jamieson Law.
Here is a run-through of the clauses you’ll need to make sure are covered in your client contract:
Summary of your services
It’s a good idea to outline exactly what you will be delivering to the client during your relationship with them. Within this clause you can set out timescales for delivery, what your obligations are, and even the client’s obligations. Examples of this might be that the client is required to keep you informed of all relevant information you need to provide the services and to respond to you in a timely manner. If you’re reliant on your client for this, such as where you’re designing something for a client, you’ll need their full cooperation in approving those designs. Where the client delays in this, you should make clear that this is their responsibility, and you won’t be at fault if deadlines or timescales are missed.
This clause should cover what you’re charging your client for your services, when invoices should be paid (which can be anything from 7 to 30 days from the date of receipt), and most importantly, what happens if they don’t pay on time.
For the provision of services, you might like to include the right to suspend your services until payment is made. You can also include the right to charge interest on the overdue amount, or to refer the matter to a third party debt collector to recover the amounts outstanding.
This clause lets clients know that you comply with your obligations under data protection legislation, such as by confirming that you’re registered with the Information Commissioner’s Office (ICO). If you’re not, you should do this sharpish!
Not only is this necessary from a legal perspective, it’s also very important for your reputation. If certain contracts doesn’t cover this, it shows as a major red flag.
Liability is essentially what you could be sued for if things go wrong, like any loss or damages caused by another party. This is very important to protect you and your business, so it makes clear what you’re not responsible for, what you are liable for, and how much money you are liable for.
Think of it from an insurance perspective too – you don’t want unlimited liability that goes above and beyond what your insurance covers (meaning you could be sued for more than your coverage).
For services-based contracts, it is usual to cap your liability at the total fees (or twice the total fees) the client pays for your services in the 12 months before the claim started.
Along the same lines as liability, this is where you can disclaim any liability to the client where they choose to rely on any advice or recommendations given as part of your services. To give an example, coaches will want to warn clients that if they choose to rely on any advice, they do so of their own volition and at their own risk. You’ll also want to state that you can’t guarantee any particular results from your services.
You’ll want to cover the circumstances under which you or the client can terminate the contract early before you’ve completed the services. For you, you might want the right to terminate where the client is overdue in paying your fees for a certain period, despite you chasing payment.
Jurisdiction and governing law
This is a must-have in all client contracts (and every contract for that matter). Essentially, this states which law governs the contract and which courts of which country have a right to hear any disputes or claims arising under it.
If you’re based in England, you’ll want the contract governed by the laws of England and Wales, and the English or Welsh courts to hear the claim.
If you want to chat through any of this with us, book on one of our free legal advice calls, here – https://calendly.com/jamiesonlaw