Do you want to develop a successful relationship with clients and be on top of their hiring list? 

A client contract is the secret tool that can help you achieve this goal. 

The reason the majority of small and large businesses rely on contracts lies in the effectiveness and unlimited benefits of this legal paperwork. 

You can call it a strategic tool that keeps everyone on the same page. Simply, it’s more than just a formality. 

However, the real question is how to make a contract for your business. 

Let’s find out the answer by having a detailed look at the importance, and essential elements of client contracts. 

What is a Client Contract?

To put it simply, it is a legal agreement between a service provider and a client. This contract lays the foundation for a successful partnership between the two parties. 

It defines the project scope, sets payment terms, and assists in clear communication so everything is done professionally. 

A client contract is a much-needed tool for every business. 

Source: ClientManager

Here are some top professionals who use these onboard clients intake form (client contracts):

• Freelancers and consultants 

• Large tech corporations 

• Media industry and advertising agencies 

• Healthcare providers 

• Legal and professional workers such as lawyers 

• Educational institutes or training organizations 

• Real-estate agents and non-profit organizations 

Why You Should Have a Client Contract?

Now that you know the client contract meaning, one thing must be popping up in your mind: why should I need a contract for my business? 

Well, the reasons are obvious. 

Without an effective agreement, your once-good relationship with clients can turn into a miserable experience. 

Think of unclear payment methods or non-specific timelines; every minute thing can affect your collaboration on a large scale. 

Enlisted below are some points that highlight the importance of a client contract: 

1. Mutual Protection 

Contracts offer two-way legal protections. 

They are the major lifesavers for businesses by solving their payment problems. This way, you get your invoices on time without frustrating delays and hurdles. 

The same legal security is provided to clients or hiring companies. You can say a contract is a shield that helps resolve disputes and protect both parties. 

2. Professionalism 

One great advantage of a client contract is it shows your professionalism. 

When you present your client with a well-drafted legal agreement, it helps in developing a long-lasting business collaboration. 

Above all, it adds an element of trust and builds a professional image among clients. 

If you have a well-constructed contract that follows business practices, you can increase your chances of getting hired by a client. 

This shows your professionalism, which results in a more positive working environment. 

3. Set Clear Goals 

The key to a successful business partnership lies in setting clear expectations. 

With a client agreement contract, you can include detailed information to ensure nothing is left unclear. 

Whether it’s the payment terms, revision policy, or deliverables, an effective contract can help you specify your services or products. 

When you clearly mention what’s included and what’s not included in the project, it will help you develop a transparent collaboration with the client. 

On the other hand, unclear things can lead to mismatched expectations, disputes, or other issues. 

Here's a legal contract significantly reduces the risk of misunderstandings for both service providers and clients. 

10 Essential Things to Include in Every Client Contract 

Source: Canva Pro

Client contract is beyond just a legal document. It includes everything needed to develop a strong relationship with clients. 

Anyone from independent businesses to large corporations can make a contract to build successful client partnerships. 

Although you can customize your contract according to your business type, here are the top 10 things that should be included in every client contract.

1. Scope of Work 

One of the critical elements of a client agreement is to include the scope of work or the project’s scope. This will help you clearly define project goals and other work details. 

Moreover, specifying project terms and showing transparent work ethics increases your chances of hiring. 

To define the scope of work, you should specify what exactly the client will receive from your products or services. 

For instance, if you’re a web developer, you can include the total number of web pages or how many revisions will be provided for web design. 

Adding this information will increase client satisfaction rate and solve problems of missed deadlines. 

2. Payment Terms

Here comes the most crucial part. You're missing out on a major deal if your contract does not include payment methods. 

Always add your preferred payment terms and detailed account information so you won’t get in trouble. 

Here are some points you should consider when adding payment details: 

• Your account type or how you want to get paid

• Do you want to get paid on an hourly basis or prefer a fixed-price project

• What is your billing schedule (weekly, monthly, or quarterly) 

Besides these details, don’t forget to mention your service rates. 

You should be transparent and clear about the project rates, as it can help establish a long-term work relationship. 

In your client contract, ensure you’ve added an invoice period. You can use client management software for this purpose. 

This will help you avoid late payment penalties and other issues. 

3. Deliverables 

The next element in a client contract is to explain your deliverables briefly. This includes the specific outcomes, services, and products you’ll provide the client. 

When you clearly define deliverables in the agreement, it will help build mutual understanding and satisfaction about the result of your project. 

You can include a detailed work description, work quantity, and quality standards in deliverables. 

You can also specify the delivery method, timeline, and milestones to reduce the risk of disputes. 

An additional tip is to outline a specific process by which a client will review and approve the deliverables. 

4. Confidentiality and Non-Disclosure

For data privacy and security concerns, the client contract should contain a confidentiality clause to protect sensitive information. 

This non-disclosure clause is a vital component of the agreement that helps build trust among service providers and clients. 

With this clause, clients will be satisfied that their information will be kept secret and will not be shared with third-party members. 

Suppose an advertising agency hires you for marketing campaigns. 

With a confidentiality clause, they will be satisfied that the company information will not be made public and will remain in safe hands. 

This clause protects business interests and intellectual property and develops a trusting environment where parties can freely share necessary information without fear of misuse or disclosure.

5. Intellectual Property Rights

Do you provide your clients with usage or property rights? 

If not, it’s time to include these rights in your client contract. Intellectual property rights are a crucial component that helps maintain a successful long-term collaboration. 

These clauses specify who retains the rights to the work created, such as designs, writings, software, inventions, and other proprietary content.

The contract will also help you outline whether the intellectual property rights are transferable to the client upon completion or if there is a shared ownership arrangement. 

This section also details licensing agreements, where the client may be granted specific rights to use the work under certain conditions while the service provider retains the original ownership. 

It’s a win-win situation at both ends. 

6. Revisions and Amendments

Client satisfaction rate increases when you provide clear details and meet their expectations. This can be done when you include revisions and amendments in your contract. 

These clauses outline the procedures and conditions under which the contract's original terms can be modified. 

This way, you can clearly understand how to handle adjustments. 

The revisions clause typically specifies the process for requesting changes to the scope of work, such as additional tasks or changes to existing ones. 

This also includes how these requests should be documented and approved. 

Similarly, the amendment clause deals with large-scale changes such as project timelines, payment terms, or changes in deliverables. 

7. Termination Clause

If you want to break a great deal, ensure your contract has an exit strategy. 

This termination clause will define the conditions under which the contract can be canceled by a service provider or a client. 

Enlisted below are some of the key elements of a termination clause: 

• Breach of contract

• Non-payment 

• Failure to deliver services 

• Unforeseen events leading to project cancellation 

In your termination clause, specify a notice period, so both you and your client have enough time to prepare for project cancellation. 

This period can vary depending on the nature and length of the contract but typically ranges from 30 to 90 days. 

This way, you can maintain a successful collaboration using client portal software. 

8. Liability 

Source: Canva Pro

Another vital element of a client contract is its liability. 

It simply refers to the responsibility of any party for obligations or claims arising from a project. 

This section is crucial because it makes sure each party is responsible for any issues that may occur during the project. 

This can include negligence, breaches of contract, or unforeseen circumstances. 

Typically, the liability clause limits the amount of financial compensation one party must provide to the other in case of a dispute. 

It may include conditions where one party agrees to compensate the other for any losses or legal expenses. 

Additionally, this clause often includes disclaimers of warranties and limitations on damages. 

This way, you can develop a more secure and risk-free business relationship with your clients. 

9. Dispute Resolution

Any type of business can end in sudden disputes and conflicts. 

Therefore, it is compulsory to add a dispute resolution section to your client contract. 

It provides a strategic approach to resolve conflicts and prevent further damage. 

Typically, dispute resolution methods include negotiation, mediation, arbitration, and litigation. Each method offers varying degrees of formality and enforceability.

Negotiation encourages both parties to communicate directly to find a mutually acceptable solution. 

Mediation involves a neutral third-party mediator who facilitates discussions and helps the parties reach a voluntary agreement. 

Arbitration, on the other hand, is a more formal process where an arbitrator or a panel makes a binding decision after hearing both sides' arguments. 

Therefore, it is essential to include all these elements in your contract. 

10. Type of Service 

Lastly, another key element is to clearly outline the type of service or products in your client contract. 

This section specifies the exact nature of the services to be performed, the tasks to be completed, and the deliverables expected. 

Don’t forget to include precise details such as the methodologies, tools, and techniques that will be used. 

For example, in a web development client contract, this section might include the design, development, testing, and maintenance of a website. 

You can also include specifics like the number of web pages, features, functionalities, and any post-launch support. 

This will help you get a mutual understanding of what can be delivered, the expected quality, and the boundaries of the services provided. 

Conclusion

A client contract is a strategic way to build long-lasting business relationships. 

It is a secret weapon that helps you fight unforeseen conditions with the right tricks and plans. 

You can always customize your agreement to match specific business needs. 

Another great tip is to use client contract management software such as ClientManager. 

Client Manager is comprehensive software to help manage and onboard clients. 

It takes the pain and provides an easy-to-use client portal containing everything in a simple dashboard. 

Its proposal builder feature helps you send customized proposals tailored to your business type. 

You can manage projects and create invoices and contracts with just a few clicks. Get it now to streamline your contracts.

FAQs: Client Contract 

How to Make an Effective Client Contract?

A client contract is more than just a legal document. It includes several key elements to ensure everything is clear and is under legal protection. You can add your detailed contact information, payment terms, deadlines, intellectual property rights, and dispute resolution methods to present your client with an effective contract. 

What are Some Client Contract Examples?

Client contracts can change depending on your business type or services. However, some things remain the same in every contract and must be included to ensure trust and a successful partnership with the client. For example, freelance agreements outline the topics, deadlines, payment terms, and the number of revisions. 

How can I Handle Changes to the Project Scope in a Client Contract?

To maintain clear and successful projects, you need to manage the changes as quickly as possible. For this, you can add a section on revisions and amendments that specifies the process for which changes need to be made in the agreement. This written amendment will help you modify changes in an organized way.