The Importance of Contracts

[MUSIC] 0:00 Working on fun projects with great clients is what makes freelancing rewarding. 0:05 Unfortunately, this isn't always the case. 0:10 Sooner than later, you're going to run into someone 0:13 who will completely turn you off to the profession. 0:15 And this will happen more often earlier on in your career as you 0:18 try to understand what makes for a good client that you're happy working with. 0:21 There are certain things that you can do to make 0:26 life easier if you end up with a bad client, 0:28 but one of the first lines of defense should be 0:31 your ability to identify what makes for a bad client. 0:33 It's hard to tell if someone's a bad egg before working 0:36 with them, but there are certain characteristics you can look out for. 0:39 If you encounter any of the following, that's a 0:43 sign that they may be difficult to work with. 0:46 They won't be the worst clients ever, but it's up to 0:48 you to judge whether you'd be okay working with them or not. 0:50 If they are a poor communicator, if they take a long time to get 0:55 back to you or are hard to understand in their emails or calls with 0:58 you, you will have a hard time trying to figure out what the project 1:01 is about, and an even harder time getting the client to review and approve work. 1:05 If there are other stakeholders involved, and the client is your 1:09 only point of contact, expect to spend a lot of time emailing. 1:12 If they can't explain the project properly, 1:16 the client shouldn't have to provide solutions. 1:19 That's your job as a freelancer. 1:21 But the client should be able to either describe the problems 1:24 they have or give a general idea of what they need. 1:26 I'm a photographer and I need a website to 1:29 display and advertise my photos, is a perfect example. 1:31 If a client can do either of those things, they'll turn out to be 1:35 those clients that tell you they will know what they want when they see it. 1:38 If they're hesitant to talk about costs, if the client doesn't mention a budget or 1:42 dodges the topic, you will find it equally hard to get them to pay you. 1:47 If they don't sign contracts, this is crazy. 1:51 Walk away immediately. 1:54 Your contract isn't an option and you shouldn't be 1:55 doing business with clients who refuse to sign contracts. 1:58 Then there's other things, like if they worked with a few 2:02 other freelance designers before you, but couldn't get the right product. 2:04 These are all signs that they're impossible to work with. 2:08 Unfortunately, it can be hard to see these signs. 2:11 Or you might not have a choice when you first start out, and 2:14 are in need of experience, working your portfolio, and money in the bank. 2:16 You have no choice but to work with these types of clients. 2:21 In such cases, a contract is your best friend. 2:24 While the experience of working with the client won't be any 2:27 less pleasant, a contract will make sure you're protected along the way. 2:29 So what are contracts and why do we need them? 2:34 A contract is simply something that defines 2:37 a relationship between you and the client. 2:40 It covers many different things in four main areas. 2:42 Working relationships, payment, copyright use, and one large category 2:45 full of miscellaneous stuff that we'll just call legal. 2:50 Notice I used the word something when 2:54 describing a contract instead of a document. 2:56 That's because contracts aren't always long form legal documents. 2:58 Contracts can be detailed, multi-page tomes or short documents 3:03 with the minimum needed to get a project started. 3:07 There isn't a right way and it all depends on the type 3:10 of freelancer you are and the clients you want to work with. 3:12 But all contracts should cover these four important areas, 3:16 working relationships, payment, copyright and any other legal issues. 3:19 At its basic level a contract should provide a definition 3:24 of the project you will be working on, terms and 3:28 conditions regarding payment, copyright protection and limitations on the use 3:31 of your work, and protection in the event of a dispute. 3:35 Contracts define the rights and obligations of all parties involved 3:39 but most often benefit only the party that created it. 3:43 Well written contracts should benefit all parties equally, 3:46 but that is quite a hard task to accomplish. 3:50 Once the parties agree to the terms of the contract and 3:52 sign off on it, the contract forms a legally binding agreement. 3:55