10 Essentials for Every Client Contract

Many moving parts of a business require proper attention. Production, logistics, budgeting, training, and data management are some examples of the numerous interconnected parts that make your business work and require adequate attention.

Oftentimes creating client guidelines, also known as client contracts, that guide how you work with clients gets pushed down the list or placed on the back burner.

However, taking some time to write a client service agreement will set up your business for success and help your clients have expectations clarity.

But how can you write a solid client contract that stands as a solid foundation for a business relationship?

This article covers the 10 essential sections that a client contract should have. It also touches on 4 common mistakes that even the pros make when writing client guidelines and 8 ways to enhance your client contracts with Clinked.

Without any ado, let’s get into the topic!

What is A Client Contract?

A client contract is a written agreement detailing agreed services, payment details, timelines, and cancellation terms. This contract is also referred to as service agreements, client agreements, or service contracts.

A client service agreement is not just any written business document, it’s legally binding.

This legal document when properly created with the right elements sets the foundation of a strong working relationship with your clients. It also to an extent determines whether a customer will be satisfied.

A client service contract is not created the same, meaning the terms and conditions for every client that works with your business aren't going to be the same.

Key elements of a client service agreement as you’ll learn more about them in later sections, include project scope, deadlines, deliverables, revision policy, payment terms, and legal considerations.

Probably a simple and concise way to think of a client contract is as a written agreement that reinforces the duties and promises of each party involved in a business transaction. The legal nature of this document makes it a must for the business and client involved to not renege on their promises and commitments.

Important Elements in a Client Contract

Creating the right service contracts requires you to include the right information or else it might be difficult to enforce it when the need arises.

Keep in mind, however, that this guide is not created to give definitive legal advice. Rather, it's a resource recommending sections and elements to consider for inclusion when writing a service contract.

If you need to seek expert advice, please do. Perhaps this information will help you collaborate well with your legal counselor in creating that iron-clad client contract that sets your business and clients for success.

Here are some of the sections to include:

• Scope of Work
• Payment Terms
• Project Timeline and Milestones
• Termination Clause
• Revisions and Amendments
• Confidentiality and Non-disclosure
• Liability and Dispute Resolution
• Intellectual Property Rights
• Client Responsibilities
• Force Majeure

How to Write a Client Contract: 10 Key Tips

Getting a new prospect to want to work with your business feels good. But before you put the shovel to the ground, create a solid and detailed client contract. Here are in detail things to include in a service agreement.

1. Scope of Work

The scope of work section of a client service contract spells out the specific tasks, deliverables, activities, and timelines expected in a project.

Recommendations:

• The name and detailed description of the service to be offered to the client. A service can be website development for an insurance broker firm.
• Deliverables referring to the major outputs to expect from the service provider. Items to deliver may include a 5-page web design and mobile responsiveness.
• Delivery timeframe or schedule that shows when to expect milestones or the complete project.
• Exclusions as specific tasks or deliverables that are not part of the scope of work. Adding exclusions is especially important to avoid misunderstandings and disputes.

2. Payment Terms

The payment term section is all about the financial aspect of the service or project. It gives structure to costs and how payment is handled. So, what should be included?

Recommendations:

• Payment method outlines whether the payment would be made through traditional means such as wire transfer or electronically via online payment.
• Due dates for installments or the whole payment should be included in the payment terms section of a client service agreement. If a payment goes past its due date, there may be a room for a grace period before a late fee is required. To avoid default as much as possible, determine the frequency of invoicing and how soon clients get invoices, so they have enough time to complete payment.
• Are there any deposit requirements before the project commences? If any upfront fee is paid, when should the balance be made?

3. Project Timeline and Milestones

A project timeline is a visual representation of the major tasks that give form to a project. Completing all the tasks means service completion. Each major task also marks a milestone in the project schedule. 

For example, in a web development gig, the project timeline could look like this:

• Wireframing (1 week)
• UI design (2 weeks)
• UX design (1 week)
• Frontend development (2 weeks)

Recommendations:

• Set timelines for milestones so clients can know when to expect each deliverable (major task) or the completion of a project. Setting a realistic project duration shouldn't be a problem if you have done that type of service before or your homework.

4. Termination Clause

Sometimes it might be best or necessary to end a service agreement. A termination clause allows either party to legally walk away from a contract if certain conditions are met.

Legit reasons could be a lack of results even after true efforts, change in circumstances, mutual agreement, violation of terms, or other factors beyond the control of either party.

Recommendations:

• Include in the clause legit reasons or grounds for termination.
• Add the required notification timeframe and what channel should written notice be submitted.
• Any termination fees or charges required for termination should be included.
• The time frame for dispute resolution can also be part of the termination clause.

5. Revisions and Amendments

If the service requires modifications, such as web development, you can include in the client service agreement the maximum number of times specific tasks or sections can revised.

Regarding the overall contract, circumstances do change, needing to amend the contract. Contract amendment is the process of making changes to, correcting, or deleting from an existing contract after signing it.

Note, however, that an amendment doesn't render invalid the original contract; it just makes changes to parts of it.

Recommendations:

• The number of edits allowed for project variables to avoid endless edits
• Grounds for amendments
• Notice requirements for any proposed amendments

6. Confidentiality and Non-disclosure

A confidentiality agreement or non-disclosure agreement (NDA) legally binds all parties involved to not reveal certain information to third parties. These two documents help protect such information as financial data, client lists, and trade secrets.

Confidentiality agreements are typically used in personal or employment situations. NDAs mostly found use in legal and business settings. 

Recommendations:

• Identification of parties to the agreement
• Definition of terms to avoid ambiguities and misconceptions
• Obligations and consequences of breaching the agreement
• The time frame for which the confidentiality or non-disclosure agreement is valid
• Exclusions to information that must be kept confidential

7. Liability and Dispute Resolution

Liability and dispute resolution clauses should also be part of contracts for clients so both parties can review the terms and determine if they want to proceed or adjust the terms therein.

Recommendations:

• The liability section of client service agreements should state indemnification. This refers to compensation requirements from one party to another in cases of damages, etc. It should also set limits to liability.
• As for the dispute resolution part, it states terms for resolving disputes, using a mediator, engaging an arbitrator, and seeking litigations in a court of law.

It's crucial to establish a clear framework of how issues will be handled. For client contracts where these clauses are particularly required, it may be best to consult with a legal counsel.

8. Intellectual Property Rights

Intellectual property (IP) such as copyrights, trademarks, trade secrets, and patents are intangible assets of a business or company. Just like the physical, tangible assets must be protected.

Recommendations:

• State how assets such as trademarks and brand names can be used throughout a service agreement.
• Specify who owns a specific piece of work once it's been completed. Does an independent contractor get the copyright to the work or transfer the exclusive right to use, reproduce, or modify the work to the business?
• Moral rights in the case of attribution should also be given consideration.

9. Client Responsibilities

The client responsibilities section of a service contract clearly outlines the things required of a client throughout the project or service.

Recommendations:

• Add all necessary information needed by the service provider from the client to complete tasks. 
• Access to materials, facilities, and other client resources.
• Feedback and approval timelines after delivering variables or before proceeding to the next milestone.
• Communication requirements throughout the project.

10. Force Majeure

Life happens not only to human beings but also to service agreements. Force majeure is a clause that removes liability for unavoidable and unforeseeable events such as pandemics, natural disasters, terrorism, and industrial strikes.

Recommendations:

• Include all possible events that qualify as a force majeure event.
• An event or circumstance must be unforeseeable to be classified as a force majeure.
• The severity of an event that would make it impossible for a party to fulfill their contractual obligations.
• The event must be a force outside of the contracted parties.

Common Mistakes in Client Contracts

If a client refuses to pay you for the work done, the client contract agreement is there to protect you and the service provider-client relationship. Now imagine making some mistakes in the contract in the first place. This could create complications in efforts to get payments due to you.

Let's consider some of the mistakes and errors that even professionals make when drafting contracts for clients and how to avoid them.

1. Not Putting Everything in Writing

Failing to set out contract terms clearly in writing can create ambiguities that either party can explore to their undue advantage.

When specific parts or sections of the document are not clear or open to more than one interpretation, you are in effect asking a judge to decide on the version of events they prefer instead of letting the document do its job.

2. Verbal Agreements

Another area related to putting things in writing is oral contracts. While in some cases verbal agreements are enforceable just as written client contracts, relying on oral contracts could create complications.

Someone could deny the meaning of what they say or claim they use the wrong language or terminology.

So even if there's an urgency to get started on a project or you have a long-standing personal or business relationship with a client, try to get down in writing everything that will guide the working relationship.

3. Be Unique

While the internet and many other tools are readily available to help speed up the creation of client service agreements, ensure you’re not just adding stuff to fill up the pages. Give special consideration to how a contract might come to an end earlier than envisioned.

Always refer to the below two questions as you add sections and details to your client contract:

1. What are those specific things or actions a client would do or take to necessitate your rights to terminate or suspend a contract?
2. What do you need to be careful about and avoid so your client doesn’t have the right to terminate early?

4. Don’t Oversell

There's nothing bad in putting your best foot forward, but be careful that you’re not overstating your capabilities or deliberately lying. 

A lie could invalidate your contract-backed insurance, while the inability to deliver on your promises could lead to earlier contract termination. Both scenarios can constitute serious grounds for your client to take legal action.

You also don't want to oversell yourself or your skillset by doing things that are not included in the agreement just to impress or anything like that. Giving an inch to clients might make them ask for a mile. If you must include extra service, add a note for why you do it so you don’t create an entitled service beneficiary.

8 Top Ways a Client Portal Like Clinked Enhances Contract Management

Especially when you or your business deals with multiple clients at the same time, creating and managing service contracts can become messy and inefficient when using manual methods or the wrong tools.

A lot of businesses are using client portal solutions to streamline the steps and tasks involved in creating contracts for clients.

Clinked, as a leader client portal provider, offers features that enhance contract management. Let’s look at the top 8 of these offerings.

1. Streamlining Contract Storage and Access

One of the top key considerations when creating a client service agreement is a centralized repository. Having a centralized platform where contracts can be stored and managed, helps eliminate lots of inefficiencies associated with paper-based contracts and other inefficient contract management practices.

Clinked offers a secure location storage for sensitive files, including client contracts. First, the platform uses a bank-grade security system to ensure maximum protection against threats from external forces. 

When it comes to document access, authorized personnel from both parties can access files based on permissions and roles. Control-based access provides many benefits when you consider the implications of a sensitive file such as a trade secret getting into the wrong hands.

The platform also provides version control for tracking different document versions. You can use this feature to review sections added to earlier contract versions and ensure you're working with the most up-to-date contract.

A platform like Clinked also comes with a keyword search feature that allows you to quickly find client-specific contracts. This way, you don't have to manually scroll through documents and files you have on a client’s record.

2. Centralized Client Communication

When adjusting drafts of a client contract, communication is paramount. Through messaging, you can discuss the details of a particular section of the contract before effecting the change on the contract document itself. This way, there wouldn’t be a need for as many edits as when there’s no clear communication channel.

A messaging feature is provided in many client portal solutions. Clinked specifically has a dedicated instant messaging channel through which appointed personnel from both sides can discuss contract terms and revision requirements before putting it into writing.

Also, a project task can be created and dedicated to “contract finetuning.” All communications about contract terms, provisions, and approvals can then be discussed through this channel. Use also the @mention feature to notify and get the attention of anyone who’s part of the contract workflow.

The complementary Clinked mobile app means anyone can receive and send instant messages on the go from anywhere as long as they have internet communication.

3. Automated Workflows and Approvals

Adding signatures and approving tasks are some parts of client contract management procedures that can and should be automated for process efficiency.

Clinked's Adobe Acrobat Sign Integration

Clinked comes with both out-of-the-box features and external integration capabilities. With both functions, you can automate the signature and approval parts of your contract management.

Use the built-in E-signature to digitally sign. This way, you don't have to first download the contract file to your local computer, scan it, sign, rescan, and then upload the contract file back to Clinked. This just described manual process is inefficient and can cause document mishandling leading to data breaches.

Notifications can also be automated for adding signatures or milestone completion alerts.

Also know that through integration tools like Zapier, Clinked can connect with popular CRM and productivity apps for automated and seamless data transfer.

All these functionalities help automate workflows and approvals, helping save time and reduce errors in client service agreements.

4. Enhanced Collaboration Features

Proper collaboration is required when negotiating and amending clauses before they become a final enforceable contract. A client document management tool should help simplify these parts of a customer contract.

Clinked comes with a task management module that you can use to manage tasks related to contracts. This may include negotiating terms, amending contract details, tracking versions, and commenting on parts of a contract file, to mention a few.

5. Security and Compliance

What's a contract management platform that's not secured? It’s as good as not having one! Considering the nature of the correspondences and files shared during contract writing, the portal infrastructure must be secured against all forces that could potentially compromise the activities taking place with the environment.

Clinked is built around robust security measures. Infrastructure elements such as bank-grade security and encrypted backups ensure the security and safety of client information and data. Clinked uses TLS 1.2 standards for all communications.

Measures on the user’s side include complex passwords, two-factor authentication, controlled permissions, and audit trails, all of which male for well-rounded protection.

As part of its commitment to security, Clinked takes serious periodic software updates that cater to product improvements while patching glitches and errors.

All robust security measures help ensure the confidentiality and legal compliance of client contract management.

6. Client Onboarding Made Easy

Getting to know the interface of a client contract management platform is paramount. As mentioned at the start of this article, several parts of a business require attention.

Giving adequate attention to the other moving parts of your operations already takes time. So, it helps if your team can quickly familiarize themselves with a portal solution you’re using for client service agreements.

Clinked makes client onboarding easy with its intuitive interface and help guides. You can easily invite your clients to join you on the platform, share files, and collaborate on files.

Also, you've got digital forms and electronic signatures that make collaboration on contract files rapid. There's no need to download files before commenting or signing on them.

Use these functionalities and many more features to manage your client expectations from the start.

7. E-Signature Integration

Clinked comes with an out-of-the-box electronic signature capability. This makes electronic signing possible within the walls of the platform without the need for an external tool.

First, this feature is a quick and efficient alternative to the traditional method of downloading, signing, scanning, and reuploading a document back to an online contract management platform.

Also, the possibility of the contract file getting into the wrong hands through local computer storage is eliminated.

If you need to use an external tool like Adobe Acrobat Sign or DocuSign for any reason, Clinked has integration support for both document signing tools and similar ones through Zapier.

8. Tracking Deliverables and Milestones

Aside from managing contracts for clients, a client portal tool should have what it takes for project management. Such capability makes for a centralized solution for both client contract management and project management.

Clinked gives you a project management module for each client you onboard on the platform. What this means is you can create unlimited tasks for each project you create, with every task catering to each deliverable.

Say a UX/UX design development stage of a web design project will last for 2 weeks. Just create a task for that milestone. Then use all features and functions provided to manage client contributions and the progress of your team.

The @mention features let you call on the personnel from the client side asking for necessary resources that keep the web development going. Use it also to notify a development team member about an update that just dropped.

Clinked also comes with a time-tracking functionality that helps you know the amount of time going into every part of a project. Use insights from the time feature to plan further resource allocation and use.

All project and task management features provided by Clinked are designed to help you and your clients stay in tune with terms already agreed on in your contract.

Wrapping Up

Client contracts are designed to protect you or your business and clients when it comes to work relationships. Outlining the terms governing your work arrangements, a client contract takes lots of misconceptions, ambiguities, and headaches out of the equation. 

When created the right way, service contrasts become that solid foundation on which successful business relationships are built.

Do not forget to take into consideration the elements of a client service agreement discussed in this resource. Whether you have an in-house legal team or will be contracting an external legal counselor, being armed with these recommendations will help you be part of the client contract process not just a spectator.

Are you a freelancer, small business owner, independent contractor, or a service professional in any of the service-based industries? If yes, apart from knowing what to put in a client project agreement, it's also essential to use a tool that’ll help you take out inefficiencies and errors associated with traditional customer contract management tools.

While you have several options out there to adopt in your process, we specifically made Clinked infrastructure to handle anything related to client management, including contract workflow management.

So be sure to check out Clinked. If you'd like to have a virtual tour of the platform, a representative will be glad to show you around. Contact us today for a product demonstration and see how Clinked can help streamline your client contract management.