💡Key Insight
- A client agreement should include a clear description of services that spells out exactly what services or deliverables your business will provide to the client, helping prevent disputes over scope or performance.
- Payment details are essential in a client agreement and must outline how much is owed, when payments are due, and the method of payment so your business secures agreed compensation without ambiguity.
- Including a liability limitation clause in your client agreement helps protect your business by defining the extent of your responsibilities and reducing exposure to legal claims for damages beyond agreed limits.
- A termination clause in a client agreement specifies the conditions under which the contract can end and any financial or practical consequences, ensuring both parties understand how to exit the relationship appropriately
A client agreement is essentially a service agreement, generally outlining the terms and conditions of the relationship. If the client hires the employer after the agreement has been sent, it is assumed that the client agrees to all the terms and conditions. Whilst each client agreement is unique, there are important clauses to include across all forms of agreements and clients.
Description of services
Describing the service to be provided is a crucial part of any client agreement. Without it, there is no clear outline of the service you are offering in exchange for compensation. Further, this can lead to your client attempting to dispute that you did not fulfil your promise. Having a clear description of services is integral in your client agreement.
Details of payment
To ensure you’re paid your worth, the payment terms need to be clear. These details should include how much money is owed, when it is due and how to deliver it. Having clear payment details is critical to ensuring you’re paid.
Liability limitation
As a business owner, it is critical to always limit your liability as much as possible. Outlining this in the client agreement is important, as it firmly outlines the responsibilities. In contrast, not including liability limitations may leave the company at risk of lawsuits, even if not at fault.
Termination of agreement
Eventually, all business relationships end. However, it’s important to ensure that your company receives as little damage as possible when this happens. Outlining conditions as to when the agreement ends, and what happens with it is critical. For example, if a client attempts to leave a relationship early, this section may contain the requirement of full payment. Phone and gym plans are common examples. You want to ensure your business leaves the agreement in the best possible situation.
Final thoughts
Drafting a client agreement can be a complicated process. However, no matter the relationship or client, it is important to include the mentioned clauses to ensure your business succeeds. For further enquiries, a contract lawyer may be able to assist.
