In today’s business world, managing expectations and understanding responsibilities are vital components to achieving success. Having a client agreement can help you avoid costly misunderstandings, which can damage your business or reputation.
Here is an example; let’s say you’re a business coach. A company has hired you because of your expertise in turning businesses around after economic downturns. You’ve conducted some initial research on the company, and you agree to meet with them. You listen to what they have to say, you read over some information, and you agree to help them. They’re a reputable company, so you take them on their word and don’t worry about a contract.
You invest a lot of time developing strategies for this company, and their profits increase. Then one day, they schedule a meeting with you. They politely thank you for your work and tell you that your services are no longer needed. You find out that the company is not going to pay the previously agreed-upon amount. Additionally, they terminated your services before the project’s set conclusion. What do you do now?
Now, imagine that you own a business, and you want to hire a public relations company to start a time-sensitive campaign to promote your business. You meet with a media company that knows how to generate awareness.
You’re impressed. You write a check. After several months you haven’t heard from the company. You call the company and learn a much bigger client came in after you and is monopolizing all of their time and resources. Your business will have to wait. Your deadline will not be met. What do you do now?
In both of these scenarios, having a comprehensive and tailored client agreement would have prevented, or at least would have provided a remedy.
What is a Client Agreement?
A client agreement is just what it implies; it’s a contract between your business and your client. Client agreements are sometimes referred to as a service agreement. A client agreement establishes upfront all expectations pertaining to a project or providing a service. It also dictates the terms of the relationship between the parties. Moreover, offering a client agreement to a potential client shows professionalism on your part because it manages expectations. As a business seeking to hire another company or consultant, you should ask for a client agreement or provide one of your own before the start of a project.
Why Do You Need a Client Agreement?
- It is a one-on-one agreement between parties
- To encourage good customer service
- To assist in managing expectations
- To build trust
- To limit your liability
- To protect your time and money
- To help minimize problems
What Your Agreement Should Specify
Client agreements may differ from client to client, which is why you must draft a comprehensive and tailored client agreement for each client. Here are some areas you may want to include in your client agreements:
- Identify who the parties are and their contact information
- Specify the details and scope of the project or what services you will provide or perform
- Identify the responsibilities of both parties
- Identify liability
- Determine how parties will address any unforeseen changes to the project
- Establish payment terms and what happens if a payment is late or not made
- Set a timeframe for project benchmarks and what happens when the schedule is not met or what happens if a client fails to show for a scheduled meeting
- Decide what happens if a contract is terminated
- Identify who owns the final product to include any copyrights or trademarks
While client agreements provide the legal framework for your business, these contracts don’t have to be lengthy, scary legal documents. What a contract should do is clearly explain the rights, responsibilities, and expectations for both parties.
To learn more about client agreements, contact The Campbell Law Group, P.A. today.