A couple weeks ago, Karol wrote a great post about not getting cheated by your design clients.
In that post, we recommended (as we always do) that you have a signed contract with most of your clients.
Would emails and all other correspondence between client and designer not act as some sort of contract?
I found Ranjit’s question extremely important and intriguing so I did a little digging, and here’s what I found:
Are client emails binding contracts?
The short answer?
The long answer?
If you have an email exchange with a client that clearly outlines the terms of a project (we’re talking timeline, scope, deadlines, deliverables, etc.) and your client responds to that email clearly accepting your offer, you may have entered into somewhat of a contract.
Even if you haven’t signed anything, you’ve agreed together as two parties on one thing (or a list of things).
As an examples, think for a moment about when you use a social media site like Facebook or Twitter.
Do you sign anything before you start using their service?
Of course not.
If you’re anything like me, you sign up for all sorts of new software services all the time, so signing a contract for each one could get out of hand really quickly.
Plus, imagine the amount of work it would take for Twitter of Facebook with their billions of users to have a signed contract on file with each of us.
But, when you sign up for any kind of service and check that little box that says something like “I’ve read and agree to the Terms of Service,” you’re entering into somewhat of a contract.
Twitter outlines the rules and agreements (just like you would in an email to a client) and you clearly accept.
And that holds up in court (usually).
But those are FREE services. What about when a client is paying?
Another way to look at it is to think through the kinds of services you use that require some sort of money to change hands.
You might pay a few percentage points to PayPal in exchange for their money management software.
Or you might pay a monthly fee to Treehouse, Lynda, Fizzle or some other learning web site.
In both cases, the essential steps listed above have taken place:
- The service-provider offered a service based on certain terms.
- The user/client accepted those terms (and, in some cases, paid a fee for that service.)
The same thing can happen via email
You’re the service provider.
You offer a service based on certain terms (timely payment, your particular hourly rate, etc.)
And when a client accepts those terms and you begin a project together, those emails begin to take on a more serious role.
Depending on which country you live in, they can even function as a binding contract in some courts.
So contracts are useless?
So what’s the takeaway today? That you should stop drafting contracts with your clients and rely solely on email in the case of a legal dispute.
Uh, no. Probably not.
Email is a good route for fast, low-income jobs (if you’re still doing those) since it may take longer to draft the contract than to just finish the project.
But for larger projects with lots of deadlines and money involved, better to get it in writing.
Here are a few reasons:
Why you should still use a contract on most projects
1. A contract is more official than an email. While an email will hold up in some courts, they are easy to fabricate, easy to misunderstand, and hard to interpret.
The goal of an official contract is to make sure you’re both speaking the same language (that terribly hard-to-understand legal jargon) and you’re both on the same page.
2. A contract adds more weight to your relationship. If for nothing else, a contract is useful for helping both you and your client feel the weight of the project you’re working on.
We exchange hundreds of emails a day sometimes. So it’s easy to discount an email, skim the details of an email, or take an email lightly.
But when you’ve got a signed contract you’ve both negotiated, something feels a little more serious. It feels a bit more important. It adds more weight to what you’re doing together.
3. A contract may be more permanent. Depending on your email client, you could have emails automatically archived or deleted which could pose a huge problem if you need to refer to them later.
When you have a signed physical and digital copy of your contract readily available, you don’t have to worry about misplacing that important information.
4. Contracts are harder to change on a whim. If all you’re using as a binding agreement is email, it may be harder to nail down scope, terms, etc. and stick to them.
Your client could email “new terms” when a problem arises (think, running out of money), or could cancel the project out of the blue via email and you’d have little to fall back on.
So what’s the verdict?
Keep in mind that email can be a binding agreement. So it’s important to keep track of what you agree to via email.
But when you’re working on high-profile, high-paying clients, we stick with our usual mantra which is: “always use a contract.”
We hope that answers your question, Ranjit!
Best of luck to all of you as you discover what works best for your business when it comes to contracts.