Blog 6: Contracts and Legal Issues
Contracts are really critical in
running a design business. Many creative
people don’t use them, either because they are not familiar with how to create
one, they want to have a “hand shake” kind of business with clients, or they
believe attorneys are too expensive. This
is a huge mistake. Doing design work for
a client without a contract leaves the designer vulnerable to all kinds of
problems, including nonpayment, misunderstanding of terms initially agreed
upon, and serious liability and copyright issues.
Creating a client services
contract will protect the designer from nonpayment and liability issues. A good contract will clearly state the fees,
the timeframe of payments due, and will also ensure the designer gets paid if
the client terminates the agreement before completion. A contract should also explicitly state when
the client gets the rights to the work, which ideally is after full payment is
received by the designer. Liability
issues should also be addressed and define who is responsible in the event of a
problem, who is financially and legally liable.
Using an attorney to create
client services contracts is money well spent!
Like Mike Monteiro said in the video, a good lawyer will actually make
money for you, and protect you from substantial financial loss. In addition to protecting the designer from
nonpayment and liability issues, a contract also positions the designer as a
professional. And a professional
designer can command higher fees from clients than an amateur.
Contracts also serve as a way to
make sure both parties (designer and client) are on exactly the same page as
far as what’s expected and when. This
helps to reduce or eliminate any misunderstandings down the road when the work
has already started.
Contracts and legal issues are
not always pleasant things for a “creative” person to deal with. But if you choose to run a creative business,
it is critical to the “business” side of things. Otherwise, you have a design “hobby.”
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