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Why Having a Contract in Your Business is Important

A Simple Contract Agreement can bring consensus for both party

You heard that in business you need a contract and every business book you read advice you of this. Ideally for every project or services provided an agreement between both parties should be made in writing and duly sign specifying the scope of the work to be done and payment request.

But some businesses do not work out of contract as they are not particularly comfortable with a contract in the first place. If you are somebody in the latter situation after reading this article you won't be able to make any excuse why you do not have a contract.

You may know that you need one to protect yourself and the other party and you do not have one because it's a difficult process for you to write it or because the job is urgent and you do not have the time to do one or the job is too small so you do not think you need one and there is simply no time to get a contract signed. It beg the question (How long does it really take?).

If you been conned or had to adsorb a cost you could not afford due to a lack of contract, we hope that you've learn from the bad experience. If you have been lucky not to have a bad experience yet read on you might discover the use of a contract on how useful they are for both party the business and the client.

What is a contract, and why do I need one?

In simple term a contract is a writing document that protect all parties by avoiding misunderstanding and serve has a paper trail if thing goes wrong. It outline the term and condition of the work to be done, under which condition you will perform your work, what will be provided to the client and what they will provide in return for the work to be carried out. It purposes is also to anticipate any problem which can occurs.

You need a contract because human relationships are unpredictable, memories are imperfect and communication is often ambiguous. A contract cannot protect you from any of this, but it can bring some clarity and consensus.

Clarity because it puts in writing what was said so all parties can review it before embarking on a joint project. Consensus because each party must agree to what is written before proceeding further. If any problems arise afterwards, the contract stands as the objective document to fall back on.

A contract isn’t necessarily a thick document with lots of legalism. A contract can be a simple outline of the terms and conditions by which you and your client agree to work like we have at Girlfridayz a simple service agreement outlining exactly what our client asked and what we require to do the work and our term of payment included clearly defining the cost of the service as well as cancellation right.

Or it can be a complex document of several pages, depending on the intricacy of the project or the number of elements involved. Its purpose is to set forth the terms of work—deadlines, scope of work and limitations, contingencies in case of unexpected changes and potential misunderstandings Like we have at Girlfridayz our Working Agreement Term and Condition

More than anything, putting these items in writing prevents miscommunication and keeps everyone’s stress level low, therefore beneficial for both party.

Many small business professionals believe that contracts are only necessary for big jobs with big fees for big clients. They often skip the paperwork on small projects. But it’s actually the little stuff that has the most potential to cause time-consuming, expensive problems.

Contracts are especially important for creative professionals because when you sell your work, you essentially are selling a right to your property—in this case, your intellectual property, which is intangible because it’s intangible, the process may be less clear than if the object in question were tangible, like a cup or a piece of clothe.

However, a contract is only as good as the people signing it. Business relationships are built on trust. In fact, many agreements are made on a handshake or verbal agreement and that is enough if both parties are trustworthy.

So the rule to live by is this: If you sense that your client or partner is not negotiating in good faith, walk away. Nothing you put in a contract will protect you as you will end up getting hurt either way.

What about a contract’s ability to anticipate what might happen? In real life you can’t predict everything that could possibly happen, so don’t spend too much time thinking about every single “what if.” If you’re dealing with honourable people, you’ll come up with an acceptable solution to an unanticipated problem, even if it’s not in the contract.

That said, have your own contract drawn up by an attorney who understands creative services and your interests if you are a photographer or a designer including website designer, creating picture, painting or any other type of artistic work. You can customise it for each situation. If that’s beyond your means, there are plenty of resources available online and free template that you can use.

Sample contract

1. Client information

Name:           Business Name:         Address:              E-mail address:             Phone number:   


2. Project information

Outline the scope of the project and any specification

Go into as much detail as possible about what you will do and how you will provide the deliverable.

3. Project price and payment terms

 Clearly state the base cost of the project, if any extra cost is likely to occurs and why

4. Final payment terms

How you will want your payment and you state that you will issues an itemised invoice and when you will issues your invoice. You also state payment method accepted also state if you require a deposit, payment upfront or if you offer 30 days to pay, or if you offer flexible payment option after an initial deposit. What is important is that you outline your term clearly and you can include your policy for late payment or your condition until payment received.

A rule of thumb in business traditionally, clients with whom you’ve maintained long relationships should pay “net thirty or net sixty,” meaning they have the standard 30 days to pay or 60 days. For smaller projects and for new clients, it’s customary to request 50% in advance and the balance on delivery.

For large projects, consider asking for “progress payments” which are payments that are not tied directly to project milestones, but instead are tied to the calendar. For example, for a project that you estimate will take you four months, propose four equal monthly payments (less the deposit) on the first of every month. This way, if the project takes longer or the client has a cash flow problem you are not losing a lots of money. Plus it’s an incentive to finish the project since they’ve already paid for it.

5. Revisions

Offer revision and amendment and specified what is a revision which is not re-starting the work be clear on the number of revision do not offer unlimited revisions.

6. Ownership of artwork/files

Until full payment has been made, you retains ownership of all original artwork/files or parts contained therein, whether preliminary or final. Upon full payment, the client shall obtain ownership of the final artwork/files to use and distribute as they see fit.

you retains the right to use the completed project and any preliminary designs for the purpose of design competitions, future publications on design, educational purposes, marketing materials and portfolio. Where applicable, the client will be given any necessary credit for usage of the project elements. Any trade-sensitive information, such as product pricing or customer data, shall be redacted by the designer prior to use.

Whether you retain ownership of the files or you transfer that ownership to your client is your decision to make. It should be decided on a case-by-case basis. Here, you can transfer all rights in exchange for full payment, while retaining the right to use the material for promotional purposes. If you want to retain the rights and the native files, you must make that clear because most clients do not understand that is not what they’re contracting for.

7. Production schedule/delivery of project

You can include all these specification but clearly layout so your client understand    

8. Third-party shipping


You can include any third party shipping disclaimer   

9. Claims period

refund period for any defective work and process for refund or credit note to be issues clearly defined the claim period. In the UK it is 14 days the legal margin.

10. Proofing of final project

Proofing of the work and your scope of responsibility including all corrective work you will be undertaking.

11. Cancellation

Your cancellation condition after the legal right of cancellation which in the UK is 14 days.

12. Confidentiality

All correspondence and documents provided will be treated as confidential between the client and the business, unless consent has been granted by both parties involved.

13. Acceptance of Agreement

acceptance of the document to be valid it must be signed and dated and return to the business.

        Signature:             Date:             Please print your name here:

Conclusion this article is useful for small business or sole traders who think they do not need a contract and that can put off the customers well let me informed you of something all unsavoury, or dubious person would not want to sign a contract with you that mean they are not genuine people and are more likely to conned you or rob you. I am not saying a contract will protect you from these horrible people but you have more chance to recover your money in a small court if you have a legitimate comprehensive contract in place.

A contract should be simple, clear, understandable and can be amendment by both party. also it is recommended to do yearly renewable contract than lengthy 5 to 10 years or more as people will be put off, however, it all depends on the type of business you run too. A contract should not include any small print if you encounter contract like this make sure you have it viewed by a reputable lawyer and always read the small print as this mean the company hiding something.

If you like this blog post, share it with your peers and I hope you start using simple agreement in your business as it clearly outline the work you intend to provide to your client and your fee for the work. A contract should have the date it start and when it ends usually when you finished the work and all payment received. A contract can be terminated by both party if any conditions has been breached.

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