Truth be told, creativity is the core of any entrepreneurial venture. As a matter of fact, it is through creativity that thousands if not millions of businesses have been established. However, it is also one of the entrepreneurial aspects that require ultimate keenness. It tends to be even more important among creative businesses, especially for sensitive processes such as drafting contracts for employees, clients, and partners.
A clearly drafted contract essentially ensures you are “on the same page” with the parties you are working for or with. It also helps to make sure that your creative business expectations are met efficiently. Most importantly, it helps keep things legal in the running of your business. On the flip side, a poorly drafted creative business contract can be a source of disappointment, losses, and eventual failure.
So, do you run or are you thinking of starting your own creative business but having no idea how to draft quality contracts? If yes is your answer, this piece is for you.
Here are some tips you could use to avoid poorly drafted contracts.
1. Define the Scope of Your Work Clearly
As a creative business owner, you need to state clearly and specifically every vital element surrounding the creative project you will be undertaking. For instance, it should include the project timelines, deliverables, and so on. Otherwise, wise you may get frustrated when your clients keep requesting frequent project adjustments. In such a scenario, you will just waste your significant chunks of time which could otherwise be used in other productive creative activities. With a clearly defined project scope, once the contract is signed, any additional changes should go along with additional cost implications.
2. Utilize Disclaimers to Prevent Liability
Like businesses in many other industries, creative businesses could attract certain liabilities. If you are promoting someone else’s work or product, for instance, you could easily attract lawsuits if it turns out that they are not the original owners of the work or product. As explained at BerkleySweetApple.com, disclaimers can help protect your business from civil liability in various ways. Some of these ways include:
- Providing notice of ownership for your intellectual property
- When promoting free products or at a fee
- Working in industries that need a practicing license
- When running advisory services on a website
3. Ensure You Are Clear On Who Will Own Your Creative Work
When it comes to contracts involving creative work, never forget to include a statement on the particular creative work ownership. For example, as a graphic designer, you may create logos, and as a writer, you may be requested to write a paid guest blog post. In such scenarios, it may be unclear who owns the particular creative work and the rights associated with the work. So, you may decide to assign ownership to the client or grant them a license with terms of usage. The license dictates terms such as how, where, and for how long a client should use your creative work, whether you will be receiving royalty payments upon use or sale of your creative work, etc.
4. Describe the Project Changes and the Associated Cost Implications
Most often, no matter how clear the project scope is, some clients will still want to do some changes here and there to the original project requirements. In fact, some will expect you to do additional work without any extra payments. In this kind of situation, clearly written and signed agreements come in handy. It should clearly stipulate what happens in case of added work or project changes, including costs and obligations.
5. Nail down Everything Concerning Money Matters
Let’s face it; most contracts related clashes are due to money matters. Therefore, it is essential to clearly specify all the details about your payments. In fact, just quoting your price isn’t enough, and invoices are not contracts either. You need to go ahead and clarify the terms of payments. For example, you may decide to either receive some portion of your fees upfront or get paid some set amounts after achieving specified project milestones. Other terms may include outlining how to get compensated in case a client cancels a project after you have already started working on it. Also, elaborate on whether you will be reimbursed for your incurred expenses. In a nutshell, you are just trying to establish a solid agreement with your client on money matters to avoid future money-related conflicts.
6. Specify the Process to Be Followed When Changing the Agreement
While a written contract is the final agreement with your clients, the reality of the matter is that the contract may still require some unavoidable changes. However, there should be a specified procedure to follow when undertaking this process. The process should be on fairgrounds for both parties. Most people may ask for the changes orally via phone calls, which is rarely a reliable approach. It may lead to arguments since there is no written record to validate the process.
Finally, you will also want to make it clear that the written agreement is final. When putting down a contract agreement, the goal is to identify things that could cause unnecessary misunderstanding and confusion with your client or the parties you work with. It also established laid-down guidelines to address disagreements that could crop up in the process of conducting business. This means that it should be professionally drafted. The above tips can help when running a creative business.