(By Vinay Jain)
“Contracts can have so many provisions that it’s hard to know where to begin. But the parts that end up being the most important are usually the ones most closely tied to money. Make sure your contract clearly and thoroughly answers the “who, how, what, when, where and why” around the money. Questions like “What has to happen for me to be paid, and by what date?” “Is there a cancellation fee?” “Is there a fee for revisions?” Take care of questions like these and there’s a good chance the rest of the contract will take care of itself.“
Let’s start by debunking a common misperception: that the point of the contract is to protect yourself from a client who wants to stiff you.
Misunderstanding, not bad faith, is your enemy.
Lawyers don’t typically advertise this, but the happy truth is, most people aren’t looking for ways to take advantage of you. A more common problem – but one that can be just as costly – is that people tend to interpret the same information in different ways.
Here’s an example: Say you’re an illustrator. Your client asks you for a drawing of a runner enthusiastically breaking through the tape at the end of a marathon. No problem — you start the drawing and email it to her a few hours later. She replies telling you that, for someone who just won a marathon, the runner doesn’t look happy enough; would you please redo it?
You’re tempted to say, “Hey, I gave you what you asked for. You never said to make him look ecstatic. A redo will be extra.” Leaving aside the question of whether you want to risk upsetting your client, are you within your rights asking to be paid for a redo?
At this point, you’ll both think back to your previous conversations. Your client will remember that time that you told her “Client satisfaction is my top priority,” which of course meant (to her) that you’d keep working until she was satisfied. You, on the other hand, clearly remember her saying that the runner should look “enthusiastic,” meaning (to you) a normal level of enthusiasm. And obviously, you’re right.
But guess what? So is she.
She was unclear about wanting an extremely enthusiastic runner, and you were unclear about expecting to be paid for revisions. This lack of clarity created gaps that you each filled in with facts and information that supported your own hopes and expectations.
Psychology has a name for this phenomenon: confirmation bias. We tend to see and remember things that confirm our beliefs. It’s just human nature, really: when you don’t set and record expectations in advance, you sow the seeds for disagreements later – even when both of you are acting in good faith.
On the other hand, when you take the time to come to a written agreement, the very process allows you to reconcile different perceptions in advance.
When you’re ready to begin that process, here are a few tips that should help:
1. Convey that a clear written agreement is a win-win.
“I don’t trust you.”
Too often, that’s what freelancers feel like they’re saying to a client when they ask them to sign a contract – especially clients they’ve worked with before. They fear they’ll destroy the goodwill that comes with doing a deal on a handshake.
But it doesn’t have to be this way. You can reframe the discussion. Explain to your client that getting it in writing is not about abandoning trust, but about establishing mutual expectations. Present the contract as a summary of your conversations about those expectations. Point out that your client will benefit just as much as you from knowing that you’re literally on the same page.
2. Focus on the money.
Contracts can have so many provisions that it’s hard to know where to begin. But the parts that end up being the most important are usually the ones most closely tied to money. Make sure your contract clearly and thoroughly answers the “who, how, what, when, where and why” around the money. Questions like “What has to happen for me to be paid, and by what date?” “Is there a cancellation fee?” “Is there a fee for revisions?” Take care of questions like these and there’s a good chance the rest of the contract will take care of itself.
3. Make a list of your past problems to check against.
Ask yourself, what kinds of things have gone wrong in your previous freelance work? For your friends who freelance? Make a list and check it against your contract. Does the contract directly and clearly address all of those situations? Are there any especially important provisions that you want to call to your client’s attention? Remember, past experience is the best guide for what could wrong in the future. Use what you already know.
4. Try putting it in your own words.
The big, pompous words you regularly find in contracts can be intimidating and tend to slow down negotiations. If you or your client is stuck on language whose meaning isn’t clear, try rewriting that language in your own words to convey exactly what you want. Remember that contracts don’t have to be written in legalese to be binding – as you’ve probably heard, even a napkin contract can be valid.
There’s a flip side to this, though – if you’re going to put it in your own words, take your time and be precise. You don’t want to end up being bound to something you wrote in haste.
5. Don’t be afraid to push back.
Sometimes your client will ask you to sign a contract with language you don’t fully understand. Don’t just sign it and hope it will never come up again — push back.
The truth is, if you don’t fully understand part of a contract, your client probably doesn’t either. In fact, he or she may not have even read all of it. So when you do push back, you might be pleasantly surprised at how often the response is something like, “Actually, I’m not sure why that’s in there. I’m fine with changing/deleting it.” Sometimes, clients even expect you to push back.
6. Know when to hire a lawyer.
For a small, routine job, hiring a lawyer to look over your contract may not be economical. But when a lot of money is at stake, it’s the right call, especially if there’s something unusual about the deal. For example, startups will sometimes pay freelancers with a combination of cash and shares in their company. This can get complicated and you’ll want a lawyer’s help.
One of the more cost-effective ways of using a lawyer is in connection with form contracts. People often look to the web or ask friends and family for forms, only to find out later that those forms were wrong for their needs – or just plain wrong. If you use a form, make sure it’s from a trustworthy source. Or, hire an attorney to check it over and explain it to you. If you use the same form regularly, your investment will pay off over time.
Contracts don’t have to be scary. By adopting the right mindset and being proactive, you can get written agreements that solve problems before they start – freeing you up to do the fun stuff.
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”