4 Red flags to watch out for in client contracts

red flags in contracts
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We all know by now that it’s important to have a contract, and to use it. Everybody should have one to make sure they don’t get taken advantage of. That doesn’t just apply to freelancers. Guess who else should, and often does use contracts?

Clients!

That’s right. Some clients, especially bigger ones, may have terms they want added to your contract as a freelancer.

They may even have a contract of their very own that they want you to sign.

They are, after all, forking over their money in exchange for your services. They should have some assurance they are going to get what they want out of the deal.

When a client hands you a contract to sign it might seem easier to just sign it, rather than get bogged down in the legal jargon and try and work out the details for yourself. Reading them can be painful and understanding them even more so.

The best thing to do is without question to have a legal professional look over the contract and explain the ins and outs for you. However, if you are able to recognize some of the red flags in client contracts, it will help you deal with a lot of the issues yourself before you even have to get a lawyer involved.

Let’s have a look at a few of the most common terms and legal mechanisms that are usually bad news. (You can also download our full Right-brainer’s legal glossary as part of the Contracts for Creatives ebook bundle.)

1. Work for hire

Work for hire sounds harmless enough, doesn’t it? Just another way to say you will be working for them, right? You might be surprised to find out what this seemingly innocuous little term actually means. With this in the contract the employer or client automatically becomes the legal author of anything you make. That can mean trouble.

2. Integrity and Paternity

A lot of people might skim over this one without really knowing what it involves. Waiving rights to Integrity (no one can make changes to your work without your permission) or Paternity ( the right to receive credit for your work ) aren’t necessarily deal breakers, but you should know when you are doing it and how you are being compensated for waiving those rights.

3. Payment upon publishing of work

This doesn’t seem so bad does it? You design a website for your client and they pay you once it goes live. The problem is, what if you do the work and the client, for whatever reason, doesn’t publish the work. You still did the work and have the right to be paid for it. Unless of course you signed that right away in the clients contract!

4. Spec work

This is when a client asks you to complete work, either in part or in full, before they will agree to hire and pay you. Working for free should be saved for charities and friends. If your new client is asking for spec work, I would think twice about signing an agreement with them.

Remember, contracts are meant to be negotiated, not just signed or walked away from. If you don’t like something in a contract, let the client know and suggest another option, or make a counter offer.

Have any of you guys run into other contract red flags before? Let me know in the comments what you look out for in client agreements.

About Ben Brush

Ben Brush is a graphic designer working and living in Nova Scotia. You can view his work on his website. Find more posts by Ben on his graphic design blog Design Puffin or connect with him on twitter.

Comments

  1. I haven’t been freelancing for very long and am a recent college graduate. My first job offer out of college was to design signs for a park restoration. Obviously I was excited because it was my first big job and would be a great opportunity. After giving them an estimate, they accepted and sent me a contract to sign. I had a friend of mine (who is familiar with writing contracts) review the contract before a I signed. The company had slipped a clause in that said if the state didn’t pay them on time for the restoration, that my payment would be deferred indefinitely. AKA, they never had to pay me. Needless to say, I countered them with a contract amendment to take that part out and they actually got mad at me, and sent me a nasty email back. I didn’t move forward with the project and although I was disappointed, I’m glad I didn’t. Now, anytime a client becomes agitated or avoids talking about payment, I red flag them immediately because they probably don’t have the money or they don’t value you the $$$ of design!

    • Christine.

      I’m so glad things turned out alright for you and you caught that clause before things progressed too far. Thanks for sharing your story!

  2. Interesting article, but feels more like a teaser. Would be great if it were more in depth.

    Ie; 1. “Work for hire…. This can mean trouble.”

    But why, specifically?

    Thanks for raising the flag, but tell us why you raised it. I want more :)

    Cheers!

    • Thanks for the feedback Matt.

      I would love to dive into these ideas further. I’m glad people are interested and looking for more.

      Hopefully it’s something we can follow up on soon and expand on the idea..

  3. Yvonne Hsu says:

    I walked away from a project that sounded really good but was a sham/scam. I met this guy who was starting a T-shirt business and we talked about getting a group of people to design, market and do paperwork for his company. We discussed rates for simple and complex T-shirt designs. Also, he emphasized on us all working together for the common good of the company.

    He gave me a contract to sign and I noticed that it said the designer will receive five cents for every T-shirt that is sold. It sounded like a nice little bonus in addition to being paid, but that was the pay!!! After all that discussion about rates! I objected, and he repeated his statement about everyone working together, blah, blah, blah.

    There are a lot of startup projects listed on Craig’s List.com. While I do support the idea of startups, it’s hard to tell which projects are decently paid and which ones are not. People like this will never get their companies started. Nor should they.

    • Yvonne,

      Thanks so much for sharing your story. These specific first hand accounts are going to be invaluably helpful to anyone who reads them.

      Really appreciate these comments

  4. Great advice, particularly good for early adopters. I think that these days there are certain ways of making sure that we’re working for the right people, for the right amount of money.

  5. Thank you for bringing up this VERY important item! This clause strips a designer/artist of ANY claim of “Creation” or “Right to display” a design or piece of art. Most newer design professionals have no awareness of this game-altering issue.

    In 1979, the Graphic Artists Guild began a long-term campaign to stop work-for-hire contracts, where the art buyer assumes control (complete authorship) over a freelance artist’s work.

    Artists / Designers: Many Freelance agencies will also ask you to sign a “Work-For-Hire”. Please educate yourselves. Work Smart. Your actions affect the entire Design Community.

    …read more below:

    The Graphic Artists Guild:
    https://graphicartistsguild.org/tools_resources/contract-glossary

    http://en.wikipedia.org/wiki/Graphic_Artists_Guild

    Work For Hire: For copyright purposes, “work for hire” or similar expressions such as “done-for-hire” or “for-hire” signify that the commissioning party is the owner of the copyright of the artwork as if the commissioning party has, in fact, been the artist. Work for hire strips you not only of the rights but of authorship; the buyer is the author under the law. See discussion in “All Rights” above. The Graphic Artists Guild is unalterably opposed to work for hire contracts.

  6. I refuse to work for anyone who wants me sign their contract on top of my contract, or those who try to alter my contract by negotiating their way through it. My work as a service provider is to be in business with my own company and provide honest results for my most valued clients; simple as that. My company makes the rules for its contracts and agreements and those rules are in place so others don’t take advantage of my services for their own selfish and cheap reasons. I would recommend others to be strict with your contracts and don’t bend over backwards to do questionable work because if something doesn’t smell right, it probably is bad for you.

    • Ben,

      I agree that we all should be very cautious when signing a client’s contract or when a client wants to negotiate ours. However, outright refusing seems a little harsh. In my experience, at least hearing out the client (to the point you start getting bad vibes or a warning gut feeling) can be worth it.

      Example: Often when working with governments, bureaucracy rules and they’ve established a contract that all contractors must sign. The agencies within that hierarchy really have no choice but to get the signature or work with someone else – there is no negotiation. So as long as the government’s contract is acceptable to you, there’s no reason not to go ahead with the project.

      Example 2: Subcontracting — almost all clients who are hiring you as a subcontractor (if they’re doing their due diligence and protecting themselves) will require your signature on their contract. This covers your relationship as a subcontractor and is not related to the specific project (usually).

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