Disclaimer: I am neither a lawyer nor have I ever played one on TV. This article should not be taken as gospel nor should you rely upon the items in this article as an absolute way to protect yourself. ALWAYS have a lawyer review your client services agreement and all other documents. Ok – now on to the show.
I’ve been running my business full-time now for nearly 3.5 years and the one thing I’ve learned is this: put everything down in writing. This way there is no confusion about what’s to be expected. My contract is constantly evolving as I gain more and more experience (and learning lessons – often the hard way). Please note, I’m not giving you the actual legalese I use in my contract, I’m just giving you a description of each section. Here are the different sections I have in my contract:
Deliverables
Explain what you’re going to deliver to the client. Are you going to write five blog articles a month? Put it in the contract. Over the course of the contract, are you going to utilize microsites? Put it in the contract. Are you going to analyze 250 keywords? Put it in the contract. Give something measurable to the client so he feels comfortable writing you a check every month.
Billing term
What is the length of your contract? Is it a one-time project? A three-month trial period? For 12 months? Put a start date into the contract along with a tangible term to avoid confusion.
Basis for Early Cancellation
You always want a way to escape a bad situation – and the client wants the same. I had a nightmare client once that would call me every day (even on Thanksgiving Day) to ask why he wasn’t seeing dramatic improvement in his rankings yet. No matter how many times I told him that SEO wasn’t a quick fix and that it took time, he never listened. He’d continue to call day after day – usually taking 20-60 minutes of my time. This section gives both of us reasons to terminate our contact. My current “opt-out” clauses are:
-
Any reason with 60-day written notice. The “fee” to opt-out early is either three months of the monthly fee or payment for the remainder of the contract, whichever is less.
-
Mutual Termination. If both of us agree it isn’t a good fit we can each walk away without a penalty. I invoked this clause with my nightmare client and he was happy to oblige.
-
Failure on my part to fulfill the agreement. If I fail to uphold my end of the contract (mainly the deliverables) then the client can notify me in writing that he wishes to terminate the contract. I then have 30 days to remedy the situation. If I don’t, the contract is cancelled and no early termination fees are required.
-
Unauthorized Administrative Access. If an unauthorized person goes into the website and essentially “undoes” all that I’ve done, I can terminate the contract. The client is liable for the early termination fee.
-
Insolvency. If my company goes belly-up or if the client’s company goes belly-up, the contract is terminated and no fees are due.
- Default. If the client doesn’t pay then the contract is terminated. Later in the contract I break down what defines “default.”
Non-Disclosure by Both Parties
You’re going to get an intimate look at the client’s business and she’ll get an intimate look at yours too. Both of you agree to keep one another’s secrets secret.
Limited Liability Waiver
This one is really important if you’re working with big clients. This clause ensures you’re protected from all losses incurred by your client as a result of your work. The only thing she can recover is the money paid to you. If you stick with white hat techniques you should be fine. But would you want to be financially responsible if your client takes a hit like the one taken by JC Penny or Overstock.com?
Waiver Protection
Basically this section says that if one of us waives one section of this agreement during the course of our relationship it doesn’t waive the entire contract.
Severability
This says that if one section of this agreement is found to be unenforceable (due to changes in the law, different laws in different states or any other reason) then only that section is suspended. All others remain in place.
Force Majeure
This is also known as “The Act of God” clause. If something out of your control or out of your client’s control happens then you’ll suspend the contract for the duration of the event. An example of this is when your client’s office gets hit by lightening and they have to shut down for four weeks while they wait for repairs to be completed. You’ll simply suspend the contract and then restart once they’re back up and running. Another example, though not exactly “God,” is a piece of legislation. Let’s say your client was a manufacturer of incandescent light bulbs. Congress has said that these can no longer be manufactured and your client is now out of business due to government intervention. This clause allows them to suspend the contract indefinitely.
Miscellaneous
This is where I put everything else that doesn’t have a fancy legal term. In this section I have a “Good Faith” clause (we’ll both work with one another to find a good solution), “Governing Law” (I live and work in Colorado so Colorado law applies), “Right to Arbitration” (we’ll go to arbitration before going to court) and an “Email and Electronic Records Consent” (the client allows me to email documents to him and add him to my email list).
Mutual Linking
I only apply this for my web design clients. If I’ve designed their site then they’ll keep the link back to my website on their site.
Hours of Operation
List out your hours. You may work different ones but this spells out when the client should contact you.
Holiday Schedule
Let your clients know when you aren’t going to be around. I list mine out and even say, “Other holidays as determined by Webstore Solutions, LLC” in case I decide to do something wild and crazy on Arbor Day.
Hourly Rate for Work Outside of Business Hours
I’m willing to work on Christmas Day for a client if it’s an emergency but he’s going to make it worth it for me.
Pricing
Make it plain as day what price is.
Payment Terms
Make sure it’s clear if it’s one time, monthly, quarterly… whatever the case may be. Also, is payment due immediately? Net 15? Net 30? Make sure that is clear. I already have this in the contract but I spell it out again to make sure it’s clear. The penalties for late payment are also spelled out.
Automatic Renewal and Price Assurance
This is a clause that I’ve not added yet but I’m kicking the idea around. Basically if the client doesn’t cancel at the end of the term, the contract automatically renews for the same term. Pricing won’t be more than 10% higher than the previous contract. As my business has started to grow, I’ve started raising prices to get rid of the less profitable types of clients. I recently doubled the price of my entry-level SEO offering and lost some clients. This clause will, in theory, save me time from having to resell them, give me a revenue source for 12 more months, and give my clients a lower price even if the published rate increases.
Signature and Date
Make sure you have a spot for both parties.
Contract Version Number
This is at the footer of every page. Every time I make an update, I change the version number and save a copy of the old version. This way I know which client is on which version.
One final word of caution: courts favor the party who did not write the contract for any ambiguous phrasing or details. That’s why I stress the importance of hiring a lawyer to draft or review the contract you’ve written.
Good luck! Please leave your comments on any sections you have in your contract that aren’t addressed in mine. In the meantime, be sure to check out these past SEOmoz posts about contract clauses:
