2 Learn How To Spot A Sketchy Client (Contract Template Included )

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Many things about our business make one glad to be creative; and there certainly are things that destroy the very soul and one’s will to carry on. Client interaction can either lead to strong relationships that last a lifetime or make you feel low and worthless.
We look at our designs as our own children, and why not? We create our work from our mind and very being. We have an emotional attachment to our work. But we also need to earn a living from that creativity, and there lies the door to our problems and aggravation.
The question arose on a blog about how to screen a client. Perhaps talking about it in terms of how to spot a sketchy client would be a bit much, but like any freelancer, I need to dump my anxieties on those who sign my paychecks. From corporate clients to the single-owner businesses, clients are our lifeblood… and they can be a cruel, cruel mistress. No wonder we drink.

How to Spot a Sketchy Client

The number one recommendation of many is to have a strong contract. True, this legal instrument can be easily ignored by clients, who know full well that you may never collect. The contract spells out the terms and rights — terms that will soon be tossed aside by the client (I swear, almost gleefully at times).
The contract is usually the deal-breaker for me. If they refuse a contract, you know you’ll have nothing but trouble ahead, particularly with regards to getting paid. Walking away, then, costs nothing and empowers you. Taking something from the client’s office as you exit makes you feel even better: a pen, a desk clock, the coat hanging on the door (as though you brought it). Call it “Travel and compensation for expenses.”
Let’s say you now have a draft contract. After many conversations, calls, emails, meetings and such, you send the contract to the client to sign, but they refuse to sign. You’ll hear so many reasons, and they are all entertaining. Here is a classic exchange of mine:

Me: Here’s my contract. Sign it and we’ll begin.
Them: We don’t need a contract. You can trust me.
Me: Oh, I do trust you. But if you get hit by a bus tomorrow, then I’ll need legal documentation to collect from the company.
Them: I won’t get hit by a bus.
Me: It could be a slip in the shower. That’s the number one kille…
Them: I don’t sign contracts!
Me: How did you get phone service or office space or equipment?
Them: I could hire an art student to do this with no contract and for less money!
Me: Then why did you contact me?

At this point, I’m usually told to get out.
One client agreed to a contract but wanted to tack on the phrase “… and anything else needed” to the end of a laundry list of services included in the quoted fee. I pictured myself sitting in a retirement home with the client still demanding design work and being unable to bill them until they had “anything else needed.” That, of course, went nowhere. All in all, a substantial waste of time.

What to include in a contract

Designers ask me about my contract. It’s a hybrid of the AIGA, GAG and common sense changes for the sake of digital-signature contracts. Tad Crawford, the well-known attorney for artists’ rights, has a book with form and contract templates, which I highly recommend.
When a client and I have agreed to a creative brief, I tell the client that I’ll send confirmation. Semantics seem to alleviate the fear of the word “contract.” Quite simply, the contract, as stated, is deemed to have been accepted once the job commences (I email to confirm that they have received the “confirmation,” and I keep all emails pertaining to the contract and to the client confirming their acceptance), and it is legally considered a digital signature when the client responds in the affirmative to begin the project.
Client: ________________
Primary Contact: ________________
Project: _______________
Date of Project: _________
Project Deadline: ________
Purchase Order #: _______
Your Name: _____________
Invoice #: _____
Creative brief: [Include the approved creative brief that you wrote. This is an important part of the contract!]
Fee: [This is where you lay out all terms of the sale, even if it is repeated in the contract terms below: how much, how many hours, what rights are sold or transferred, how many revisions, the hourly rate for those revisions, etc. It doesn’t have to be in legalese, just as complete as possible so that you don't have to sue to get paid for something you didn’t have in writing.]
1. Payment
All invoices are payable within 21 business days of receipt. A $50 service charge is payable on all overdue balances for reissuing each invoice at 45, 60, 75 and 90 days from the date of original invoice. The grant of any license or right of copyright is conditioned on receipt of full payment.
2. Default in payment
The Client shall assume responsibility for cost outlays by designer in all collections of unpaid fees and of legal fees necessitated by default in payment. Invoices in default will include but are not limited to fees for collection and legal costs.
3. Estimates
The fees and expenses shown are minimum estimates only unless an hourly fee has been agreed upon. That fee will be ________ per hour and the designer shall keep the client apprised of a tally of hours within a reasonable period of time. Final fees and expenses shall be shown when invoice is rendered. The fees and expenses shown are minimum estimates only unless the quote and/or invoice is clearly marked Firm Quote, otherwise the below stated hourly fee will be payable on all time over that which was quoted with a minimum in 30 minute increments.
4. Changes
The Client must assume that all additions, alterations, changes in content, layout or process changes requested by the customer will alter the time and cost. The Client shall offer the Designer the first opportunity to make any changes.
5. Expenses
The Client shall reimburse the Designer for all expenses arising from this assignment, including the payment of any sales taxes due on this assignment, and shall advance the Designer for payment of said expenses, including but not limited to Stock Photography, Artwork and/or material needed for the project.
6. Cancellation
In the event of cancellation of this assignment, ownership of all copyrights and the original artwork shall be retained by the Designer, and a cancellation fee for work completed, and expenses already incurred, shall be paid by the Client. Cancellation fee is based on the hours submitted, if the project is on an hourly basis or a percentage based on the time estimate for the entire job. A 100% cancellation fee is due once the project has been finished, whether delivered to the client or not. If the project is on an hourly basis and the project is canceled by the client, the client agrees to pay no less than 100% of the hours already billed for the project at the time of cancellation plus a flat fee of $250 or 50% of the remaining hours that were expected to be completed on the project, whichever is greater.
7. Ownership and return of artwork
The Designer retains ownership of all original artwork, whether preliminary or final, and the Client shall return such artwork within 30 days of use unless indicated otherwise below. If transfer of ownership of all rights is desired, the rates may be increased. If the Client wishes the ownership of the rights to a specific design or concept, these may be purchased at any time for a recalculation of the hourly rate on the time billed or the entire project cost.
8. Credit Lines
The Designer and any other creators shall receive a credit line with any editorial usage. If similar credit lines are to be given with other types of usage, it must be so indicated here.
9. Releases
The Client shall indemnify the Designer against all claims and expenses, including attorney’s fees, due to the uses for which no release was requested in writing or for uses that exceed authority granted by a release.
10. Modifications
Modifications of the terms of this contract must be written and authorized by both parties, involving the implementation of a new version of the contract as a whole following standard procedures of documentation and approval.
11. Uniform commercial code
The above terms incorporate Article 2 of the Uniform Commercial Code.
12. Code of fair practice
The Client and the Designer agree to comply with the provisions of the Code of Fair Practice (which is in the Ethical Standards section of chapter 1, Professional Relationships).
13. Code of fair practice
The Designer warrants and represents that, to the best of his/her knowledge, the work assigned hereunder is original and has not been previously published, or that consent to use has been obtained on an unlimited basis; that all work or portions thereof obtained through the undersigned form third parties is original or, if previously published, that consent to use has been obtained on an unlimited basis; that the Designer has full authority to make this agreement; and that the work prepared by the Designer does not contain any scandalous, libelous, or unlawful matter. This warranty does not extend to any uses that the Client or others may make of the Designer’s product that may infringe on the rights of others. Client expressly agrees that it will hold the Designer harmless for all liability caused by the Client’s use of the Designer’s product to the extent such use infringes on the rights of others.
14. Limitation of liability
Client agrees that it shall not hold the Designer or his/her agents or employees liable for any incidental or consequential damages that arise from the Designer’s failure to perform any aspect of the project in a timely manner, regardless of whether such failure was caused by intentional or negligent acts or omissions of the Designer or Client, any client representatives or employees, or a third party.
15. Dispute Resolution
Any disputes in excess of the maximum limit for small-claims court arising out of this Agreement shall be submitted to binding arbitration before a mutually agreed-upon arbitrator pursuant to the rules of the American Arbitration Association. The Arbitrator’s award shall be final, and judgment may be entered in any court having jurisdiction thereof. The client shall pay all arbitration and court cost, reasonable attorney’s fees, and legal interest on any award of judgment in favor of the Designer. All actions, whether brought by client or by designer will be filed in the designer’s state/county of business/residence.
16. Acceptance of terms
The signature of both parties shall evidence acceptance of these terms.
Designer: __________________
Date: _____________________
Client: _____________________
Date: ______________________
16a. Acceptance of terms
The action of the sending and receipt of this agreement via electronic method will hold both parties in acceptance of these terms. The Designer as sender and the client as recipient will acknowledge acceptance of these terms either through an e-mail noting acceptance or acceptance is acknowledged at the beginning of any work on said project. Electronic signatures shall be considered legal and binding.
This contract is held accountable to the legal system of [country] and any applicable statutes held therein.
Disclaimer: the inclusion of this template does not imply any legalities or responsibility on the part of the writer or Smashing Magazine. It is included solely for information purposes as an example of one professional’s contract. The laws in your state/country/dictatorship may differ. Check the Web for more information on your local laws.

Here is an OpenOffice document with the sample contract (.zip).

What Does Your Time and Effort Cost?

But why let it get to that point? Drafting a creative brief and adjusting a contract take a good amount of time and effort. What is most often ignored is the process long before the contract/argument/threats stage. There are red flags and tell-tale signs to look out for when discussing a job with the client. (Just as when you are being interviewed for a full-time position, you are also interviewing them.) How do they communicate? Do they constantly interrupt you and boast? That kind of personality will tend to micro-manage and belittle you, after which they will try to cut your bill in half because they “did all the creative work.”
Red flags are those little bells that go off in your head, or the saliva you produce as you get ready to vomit. One red flag I like is pulling up to a prospective client’s business address and finding that the building doubles as a crack house. Not getting out of the car at all saves me a great deal of time and effort.
If you make it to the reception area, look around. Any awards, plaques or licenses? The tell-tale sign of a summons from the courts pasted across the door? Are the people who walk in and out smiling or bleeding? Unhappy employees mean you will not enjoy working for the client either. If you see a pile of mail on the reception desk, are there envelopes marked “Final notice”? Is everyone well mannered and respectful? Were you kept waiting more than 15 minutes after your appointment time? Is the office neat and clean? If it’s disorganized and filthy, that’s how they will treat you.
The quiet shy client will ask 200 or more people (and animals) for their input on the design and then request all of those things from you. Charge hourly and you’ll be able to retire on the change this client rolls up… if you get paid, that is.
The overexcited type wants to be your friend and hang out at a bar during meetings. Because they are also a raging alcoholic, they won’t remember what they approved or what they asked you or what you told them. If you have a contract, they won’t remember it and will argue that it doesn’t count.
The person who flips through your portfolio like a Las Vegas card dealer is looking to hire a pair of hands to execute their ideas. Go hourly, and make sure to keep the client informed of the hours as you go along, so that they understand why they have a $20,000 letterhead after you’ve had seven sleepless weeks of work.
The corporate art director will be easy-going and have a contract all ready for you. After you’ve signed away all rights and future children, and you’ve delivered the job, they will be as helpless as you to see through a timely payment, so why bother mentioning it? The invoice is passing through layers, and when it reaches the accounting department, you must bear the corporate-mandated pecking order of payment. Freelancer rates just below cockroach exterminator on the list of payees.
I’ve gone through all of these episodes. We all have. So, what do you do? The saving grace is the comfort I get when a client smiles, tells me they love my work and want me to do “something different,” when they do everything on the level and pays me a fair rate in a reasonable time. It happens enough to keep me from quitting the business some days, but the other personality types sure do test my patience the other days.

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