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The Business of Doing Business Podcast Episode 3: Client Contracts

In this episode, Yasmine dives into the nitty-gritty of contracts that’ll have you navigating client relationships like a pro. Communication is your lifeline in business, and Yasmine shares her golden guidelines for crystal-clear relationships.

Yasmine breaks down her top tips for a successful client relationship & a rock-solid contract, ways to avoid sticky situations & awkward conversations with clients, and some of her best practices for collecting a digital signature with no issues!

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Episode Transcript

As with possibly all things in life good communication will take you far the source of a lot of disputes is miscommunication or lack of communication. You know, I really want to emphasize that clause around communication and upholding those policies. You’ll be glad that you did. Welcome to The Business of Doing Business podcast with Yasmine Salem Hamdan. What’s going on y’all welcome back to The Business of Doing Business podcast.

That’s not our jingle. And if we had a jingle I would not be the one singing it but I don’t know what just got into me it felt right in the moment. Welcome back to the Business of Doing Business podcast, I am your host, Yasmine Salem Hamdan, we are talking contracts today, which is one of my favorite things to talk about, it’s probably I would venture to guess that it’s not one of your favorite topics. And that’s totally okay. I don’t take that personally, I actually don’t blame you one bit, because you’ve got your own stuff that you love to do, and love to focus on. And the contract is just the foundation of that work.

And so it is relevant, which is why we’re having this conversation today. But it’s not, you know, your primary focus, but I want you to know that it can support you, and a good contract should support you and support your client and support your relationship together. So today, we’re gonna get into the nitty gritty of a client contract, working with a client one on one, maybe you’re working with this client in a coaching relationship, maybe you’re working with them as a freelancer, either way, you are committing to providing a service to this client, and the client is committing to holding up their end of the deal to their end of the deal probably includes some form of payment.

It also might include some participation, maybe sharing information or resources, with you. Maybe providing you with some sort of initial deliverable that you use or initial resource that you use in order to produce your final deliverable. So whatever that might look like, if you’re working with a client one on one, you know, you need a contract, you know, you need to have it in writing. And so we’re going to talk about that today. And the kinds of clauses and the kinds of policies that you might want to consider including in your client contracts in order to set yourself up and your client up and your business up for success.

So we’ll start with the written agreement. So maybe we’ll talk about delivering a contract first, before we get into the clauses and the different things that you should include in the contract. How in what form can you deliver a contract, I don’t remember the last time I signed a contract for services in person, like a handwritten signature, which of course, was the way that it was always done prior to the digital age. And so today, we can send contracts electronically, you can send contracts for signature through different CRM platforms like Dubsado, HoneyBook, and Paper Bow.

You can also use different document signing tools that are exclusively for document signing, like Ever Sign or Hello Sign. I’ve used Ever Sign for years before I started using a CRM, because I just needed to send a PDF with my client contract and get signature. That was in the very early days, I didn’t have, you know, a roster of clients and multiple projects that I was managing, or I hadn’t developed my business to the point where I had really clear processes and emails that I was sending as part of a sequence throughout the client project. And so once you are at that point, you will likely want to use a CRM tool like the ones I described. But having a PDF signature software that you send the client contract often is plenty sufficient for purposes of securing a client signature.

So having the contract tailored to your business and have your specific offer included and the client’s name, etc, sending it to the client and securing their electronic signature Some people ask, and it’s a common question that I ask is, do I have to have their actual signature? Like, do they have to write their name? Or can they just check a box at checkout? And is that sufficient? Under the law? Yes, it is sufficient as long as they are affirmatively taking action and clicking that themselves. It’s not something that’s like pre-checked.

And this is key that they’re able to view the terms of the contract. So they have to be able to view them right then. I prefer for the contract terms to be on that same page as the box, not them having to click on a separate link and going to the contract terms. But you know, arguably, that’s fine, too. But my preference is just to make sure they’re really clear on the terms that they’re agreeing to, because get this, this might come as a shocker to some but to others. It’s probably like, Duh, you don’t want your client signing something that they’re not aware they’re signing, you know, you don’t it’s not a secret the terms that they’re agreeing to.

In fact, you want it to be very clear. And we’re both on the same page, both literally and figuratively, as far as what it is that we’re agreeing to. So I’m not here for the fine print. I’m not here for hiding the terms in the contract. You want it to be out in the open and very clear like these are the policies. These are the terms and we’re on the same page. We’re in agreement. So you can send that to them in a PDF format, ask them to sign it that can be through a CRM that could be through an electronic signature software that could even be like an attachment to an email and ask them to just sign it in Adobe, or print it out and sign it and then send it back to you.

Although I wouldn’t recommend that it’s not ideal for either party. But technically, it’s sufficient to secure a signature. And then also, if you decide that you want to, I know some people have, you know, different funnel setup and sales pages where clients can just go directly to the page, agree to the terms, submit their payment and kick off the onboarding process. But like I said, make sure that you have some sort of function where they have to affirmatively agree to the terms and select that they agreed to the terms and that the terms are viewable by them.

And that way, you actually have a binding legal agreement. So that’s that on that, let’s talk about what to include in your client contract. So first and foremost, of course, you know, with a contract, the basic fundamentals is that you’re providing something to the client in exchange for something that they’re providing you and typically that services in exchange for payment. So in your client contract, arguably one of the most important parts is the scope of services section. So in your scope of services section, you want to be really clear as to what it is that you’re agreeing to provide to the client within the scope of this contract.

This is important because you want to make sure that this contract, one, is enforceable, some jurisdictions, if you’re not clear as to what the specific services are, that you’re agreeing to provide, you aren’t able to enforce this contract. So you don’t want to be generic, you know, you don’t want to just say like, generally, I agree to provide you with coaching services for 30 days, or generally, I agree to provide you with marketing services for six months, like let’s get specific as to what are the deliverables of the services, how many calls and sessions like how much support is actually included? Is there any access to other content or other resources that perhaps is included as a part of your package, if that is a part of the included in the contract, put that in writing.

On that note, does that mean you have to include every single teeny tiny detail of what you’re going to deliver to the client, if you want to delight your client with surprises, maybe a gift, maybe some sort of bonus that you want to exercise at your own discretion, generally, you don’t have to put that in the contract. Otherwise, you could be bound to providing that as a part of the service. And so I’m here for the surprise and delight the client, I love to do that, as a service provider, I enjoy being on the receiving end of that as a client.

So I’m here for all of that, as far as your contract goes, just know that you don’t necessarily have to put that in writing. It’s not wrong. If you do just be aware that if you do that, then you are obligated to deliver on that as a part of the scope of the services in this agreement. So be really clear as to what it is that you’re agreeing to in your client contract. And that’s in your best interest from an enforceability standpoint.

And then also, from a practical standpoint, as far as did I deliver on what I agreed I would be delivering on and if you need to present that evidence to a client or you know, God forbid, in a court of law, then you want to be able to point to a clear contract that states you agreed to provide the services of XYZ and then you could present evidence of actually delivering on that service. Now, in addition to the scope of services, of course, the other key component is compensation. So how is that other party going to compensate you? What is it that you’re agreeing to?

Typically it’s money, typically, it’s a payment, it might be on an hourly basis, it might be on a flat fee basis. Either way, specify that in the contract. And then there are some key terms around payment that you want to be sure that you’re including. So that might be a payment plan. If you’re offering them a payment plan be really clear as to what that payment schedule looks like.

Don’t beat around the bush, don’t leave any room for confusion or negotiation around when payment is due be really clear as to what they owe and when. And when a payment is considered late. On that note, you will probably want to include a late payment policy if you are working with clients on an ongoing basis where if you’ve offered them a payment plan, include a late payment policy so that it’s really clear as to what happens if a payment is late because I mentioned this in the last episode, if you don’t specify a policy a what if policy, for example, like what if a payment is late, you’re gonna have to negotiate that in real-time.

And you don’t want to have to do that you want to be able to look at the contract and say, Okay, well, we already agreed that if a payment is late, this is a late fee that applies or after X amount of days, a payment is considered late as opposed to having to negotiate with the client, the clients like well, you know, technically, it’s within this amount of time and you didn’t say anything about late payments. So you know, you can’t assess a late fee at that stage.

And so it doesn’t support the relationship from that aspect, so you really want to protect your business and yourself from payment issues. And a way that you can do that is by getting really clear as to what is owed when it’s to be paid. What constitutes a late payment? And then, of course, a policy on refunds. refund policies can be tricky. I think we’ll do a whole episode on refund policies and different ways that you can approach refund policies in the future.

But you know, everybody has a perspective on what is fair, when it comes to refunds. In my opinion, I think it’s plenty fair to have a No refunds policy for services that you’re rendering. That being said, if you have a client that’s unhappy about services that they’ve received, do your best to make it right, do your best to have open communication with the client to see okay, what was it that you were dissatisfied about? And is there a way I can make this right?

Is there a way I can resolve this so that we can salvage the client relationship and also protects your reputation because your reputation is at stake if you have an unhappy client or dissatisfied client, and they you know, publish a negative review or share that negative experience online or with others, you stand to be harmed as the business owner, so salvaging the client relationship and making it right if they are unhappy, in my opinion, is the best route from a business standpoint, and I think it’s just the right thing to do. If I’m being honest.

So do your best to do right by your clients. You know, I’m not here for the like you like it you like if you don’t get by you and your business could potentially be harmed by that course of action. So I would avoid that if you can. Another policy around payment. This is the final one that I’m going to mention before we move on is around chargebacks. So chargebacks is a concept that is I would say like relatively new.

I mean, it’s been around for a while, but more and more entrepreneurs are facing that kind of situation where the client is disputing the charge with their financial institution, either their bank or their credit card company. And so you can include policies in your contract around you know how to resolve if they are dissatisfied with the service. Or if they have an issue with billing, how you can avoid a chargeback situation because chargebacks when a chargeback is filed through a credit card company, the client’s credit card company or bank that goes to your payment processor and your payment processor, you can bet that they are keeping track of that because that is a liability for them.

And that puts a red flag on your account as their client, what I’ve seen in the past is if you are receiving a lot of chargebacks, that these payment processors will flag your account, they will require a hold of a certain amount of money before they can process a payout or maybe for a certain period of time. So like that is not something that you want to be dealing with. I will say this, if you are receiving a lot of chargebacks, there’s probably something that you need to take a look at in your process.

Maybe you need to do a better job of vetting your clients and not just letting anybody purchase a service from you or a product from you. Or maybe you need to get really clear on the promise that you’re making to prospective buyers. Because clearly they’re not satisfied with something. So it’s certainly an opportunity to look inward and see, okay, what is going on in my business that is causing these, whether it’s refund requests or chargebacks. Okay, so another important clause to include in your contract is around communication.

So what are your communication policies? Get really clear as to how clients should communicate with you as it relates to your work together, where they should communicate with you. So like, is there a specific platform that you prefer? Is social media, okay, it’s probably not. So you want to be clear that social media is not an effective way of communication? Where should they communicate with you? And when? And how soon can they expect a response from you?

As with possibly all things in life, good communication will take you far. And the source of a lot of disputes is miscommunication or lack of communication. So, you know, I really want to emphasize that clause around communication and upholding those policies, you’ll be glad that you did. Alright, so let’s talk about rescheduling. Because when you offer services, a lot of the time you might have repeated calls with clients. So if you find yourself, you know, facing a lot of rescheduling situations where clients are rescheduling without notice, or maybe they’re rescheduling and want to reschedule for, like weeks out, you can create policies around that and build in some boundaries.

For example, some, you know, a minimum notice if they are canceling. And so maybe you provide them, you know with a requirement of a 24-hour notice if they need to cancel a call. And if they provide the 24-hour notice, then you can reschedule it, but if it’s less then they forfeit the call, and that doesn’t necessarily mean you have to enforce that. But it gives you the discretion to do so that way you can make the call which in my opinion is one of the best parts of having a great contract is that you give yourself options that way if I’m the service provider, and the client gives me like you know, 30 minutes notice, but it’s because they have an emergency, I can exercise my discretion and so I will gladly you know, reschedule.

Even though it’s less than 24-hour notice, because this client, you know, they’ve never done this before, they don’t have a wreck history of this, I enjoy working with them, whatever your reasons might be, you get to decide like, okay, I’m fine with it, I’ll exercise my discretion. Same goes around policies with like roll calls rolling over, if you’re working with a client month after month after month, and you have a set number of calls every month, and they cancel some calls, you can include in your contract that calls do not roll over to the following month, each month calls must be used within that month.

And if they’re not used within that month, then you know, they do not roll over. And that’s an option. If you provide your clients with affiliate links, you can include that in your contract, for example, you might provide them with other affiliate links and resources. And you can include something of a disclaimer in your contract around, you know, you’re not able to guarantee the quality of the service that these referrals are these affiliate links provide, because they’re run by third parties, and you are not responsible for or able to oversee the delivery of that service.

And that’s just another layer of layer of protection for you. So one other thing, as far as calls go, that I’m thinking of now is consent to record. So in some states, and you might not know this, but in some jurisdictions, you are required to have the consent of the other party, if you’re recording your phone call with that, and your phone call, or your Zoom call, or your conference call, or whatever it might look like. So if you have a client call, and you’re recording all of them, either for your own purposes, or for purposes of sharing it with your client, regardless of what it is, you need to make sure that you’re securing their consent.

And so I like to do is get that consent upfront when you sign them as a client. And that way, you’re not having to get their consent on an ongoing basis, because honestly, it’s not practical, you might have noticed that Zoom now has a pop-up when you sign on. And the host is recording the call, they secure your consent right then and there. And so I wouldn’t rely on that as the business owner, I would have that in my contract. And just make it clear, we record the calls. This applies for, you know, one-on-one clients, and especially group programs, if you’re working in a group setting, making sure that everybody has consented to being recorded on the call.

Okay, so another clause and thing that you want to consider in your client contracts is around intellectual property. So ownership of IP, there are a couple of different things to consider here. So one is if you are working with your client to create content or create intellectual property if you’re helping them develop their brand, or create marketing collateral, produce any type of work, visual work, and audio work or written work in that contract should be very clear language around who owns the content and when.

So quick content Crash Course is an IP Crash Course is if you are creating content, and you are creating it as a contractor, so let’s say somebody hires me to create content for them, I own that content unless I expressly transfer ownership of it to the other person in writing. If I’m an employee of that person, then everything that I create is automatically owned by the company. But if I am an independent contractor, then I have to make sure that I am putting that in writing and transferring ownership of it to them unless I don’t want to. It’s not a requirement.

But it’s likely that if you’re the client, you probably want to own the content. So in your contract, if you’re the one creating the content or supporting in the content creation, you can include language around who owns the content. And when and I suggest including some language around transfer of that content takes place after payment is complete. So after we’re good on the payment, and final payment is remitted, then at that point ownership of the copyright and any content is transferred.

Another consideration here is if you’re providing access to any of your intellectual property. So if you’re providing access to course content, or resources or tools, or any IP that you’ve developed, and you’re providing access to that, then you can include that in the contract that you’re providing them with a license to use it and let them know to what extent they can use it.

Some people provide access to resources for their clients for their client to repurpose it or reuse it in their own business. Or maybe you’re just providing it to them to consume themselves and not for them to republish it or sell it. There’s no right or wrong answer here. It just depends on what your preference is and what your intentions are. And putting that in writing very clearly for the client.

I want to talk about protecting yourself from liability. So you can include different clauses in your contracts around liability and the different guarantees or no guarantees that you’re providing to your clients. And then specifically the scope of the service that you’re providing. I know we talked about scope of services earlier, what all is included in your services. But here I’m talking about what all is not included in your services. So specifically, I’m talking about people who are providing a service that is somewhat personal to the client.

So maybe this is related to finance, maybe this is related to health or wellness, something that’s personal and really I think it extends to any and all personal services if you’re working with a client one-on-one. So getting really clear on okay, this is not legal advice or financial advice or mental health therapy or medical advice or a medical diagnosis or a replacement for medical treatment, like, depending on what it is that you provide, be really clear as to okay, this is where the line is drawn. And I’m not providing XYZ, because that’s beyond the scope of the services that I’m providing, and put that in writing so that it’s very clear.

And in the event that you have to refer to that and show like, Okay, well, I actually did not lead the client to believe that I explicitly said in the contract that that’s beyond the scope of the services that we’re providing. And that can be another layer of protection for you. Okay, including language around changing the terms of the contract specifying that both parties would have to agree to any changes that are made, which you think, you know, goes without saying, but it’s worth including so that both parties are very clear that the contract cannot be modified unless we’re both in agreement.

And we both sign a new agreement or an addendum. And then governing law. So what law applies in the contract, you as the business owner have the opportunity to have something that I call home court advantage. But when you have a contract as a business owner, that you present to your clients, you have the opportunity to specify what the jurisdiction is that governs the contract.

So I’m in Texas, I would state my county of wherever it is that my business is located or that I’m located, and that that county and that state’s laws are the ones that apply and govern this agreement. And that means that if there is a dispute, and if somebody wants to pursue legal action against the other, it would have to be brought in the jurisdiction that is mentioned in the contract, and the laws of that state would apply. So sometimes this can act as a deterrent for people that might otherwise pursue legal action against you.

This can act as a deterrent, leading them to believe, okay, well, that just it’s way too much hassle for me to hire an attorney there or for me to have to travel there and and to pursue legal action against them. I will say this, you also have the opportunity in your contract to specify how you’re going to resolve disputes my preference. And what I like to do, and this might not work for everybody, is to include a clause requiring mediation before any type of lawsuit is brought. And that’s a way that you can reduce the likelihood of a lawsuit being brought against you or your company by requiring that mediation is attempted first to resolve any dispute between the parties.

Finally, signature, we talked a little bit about signature at the beginning of this episode, and securing signature from the client. Of course, you want to mention who the parties to the agreement are, it should be your company, do not name yourself as an individual name your company as a party to the agreement, you are just an agent or representative of the company. And that’s a way you can shield yourself from personal liability. And then your client, you should name them in the contract as well.

You could name them if they have a business entity and they prefer for their business to be named, you could name the business entity, and then they the individual as a representative, or if they do not represent a company and they’re just an individual, you can name them individually as a party. So be sure to name the two parties that are involved in the contract and then have a place for signature at the end of the contract.

Okay, so I hope this episode was helpful and clarifying for you when it comes to your client contracts. I would love to hear from you if you have some follow-up questions. Or if there’s a specific type of contract or specific type of service that you want me to talk about on this podcast. I welcome your submissions and questions. You can submit them through our Ask Yaz form that is a segment that we’re going to be doing on future episodes. Please feel free to visit TBODB or thebusinessofdoingbusiness.com.

Find the link in the show notes of this episode and submit your question, let us know what it is that you want us to talk about on this show. Or if you need some advice as it relates to a specific business situation. I welcome your questions, and I will see you and/or talk to you in the next episode, peace!

Hey, friend. Thanks for listening to this episode of the Business of Doing Business podcast powered by coachesandcompany.com. If you enjoyed what you heard, please share it with a friend or to your social media and tag us at coachesandcompany.

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Also, you can find more tips and resources for your business by visiting coachesandcompany.com and by following us on Instagram at Yasmine Salem Hamdan, and at Coaches & Company if you have any questions or comments, any topic requests or future episodes, or maybe you want to be a guest on our show, you can reach me directly by emailing Hello@coachesandcompany.com.

Thanks again for listening and I’ll see you next time!

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