I was recently contacted by an agency I’ve worked with on numerous projects. Their client disappeared mid-project and had been in touch to ask about some tweaks on their new site.
Confused, the agency checked out the client’s site. The client had outsourced the completion of the work elsewhere, ripping off the design we had created. Not only this, but the client didn’t want to pay for the work as they hadn’t used it.
Without getting into the rights or wrongs of the client’s behaviour, it surprised me that the agency’s contract didn’t include clauses that protected them. The contract I use, based on Andy Clarke’s Contract Killer, has a couple of sections that would have strengthened their position.
Let’s look at the two clauses that could have prevented this happening.
The ‘Kill Fee’
“If, after project commencement, you stop communicating with me for a period of 180 days, the project can be cancelled, in writing by me, and ownership of all copyrights shall be retained by me. In this scenario, I reserve the right to charge a cancellation fee for the work completed, with the fee based on the stage of project completion. The fee will not exceed 110% of the total project cost.”
This affectionately-labelled cancellation clause protects you from a client disappearing mid-project and puts the onus on them to remain in regular communication.
It has helped me on a couple of occasions, including some situations I hadn’t anticipated. One particular project stalled after kick-off and the client went silent for nine months. My schedule was then too busy to accommodate the project’s completion and this clause ensured I was paid for the work completed.
Intellectual Property
“I’ll own any intellectual property rights I’ve developed prior to, or developed separately from this project and not paid for by you. I’ll own the unique combination of these elements that constitute a complete design and I’ll license its use to you, exclusively and in perpetuity for this project only, unless I agree otherwise.”
This would have prevented the agency’s predicament and is a must-have for any creative work.
The clause states that:
- The client doesn’t own (and can’t use) the design until it’s paid for
- The design can’t be replicated to create new sites with the same design
In our scenario only the first sentence is relevant, but the second is a valuable consideration for anyone working in design.
Strengthening your position
Without these clauses, the client-supplier relationship is too heavily weighted in the client’s favour. At any point, the client can disappear, ask their nephew who builds websites to ‘finish’ your work or replicate your design across their company’s network.
Understandably, my colleague was upset by the way their client had treated them, not least as they would not break even on the work completed.
Their contract has now been amended to include these clauses. If yours doesn’t include them, I’d suggest you do the same.
Top comments (14)
Forget clauses about copyright and IP, nobody really understands these and the ambiguity it brings can worry clients.
I really prefer your specific and actionable clauses. This is great.
Definitely something for me to think about. Funnily enough, the rest of the contract is in plain-English – maybe this bit should be, too. 🙌
Thanks for sharing this story - and the page with the contract. I never really had a case when the client disappeared like that, as most of my work has been either recurring work with people I trusted, done via referrals or (a long time ago) via freelancing platforms.
But that's something to always have in mind when providing services to clients.
Yes, definitely. This was the first time I’d experienced it, too. I was really surprised it wasn’t in their contract, but now it is – lesson learned!
I think it's like insurance. You hope you never need it, you think it can't really happen to you. But you're grateful to have it when the manure hits the fan.
Absolutely – it’s the same with professional indemnity insurance.
This is great insight, thank you! A real shame to hear about your colleague's experience, though :(
As someone looking to do more freelance work, I'm going to make sure I have a clear, concise contract that includes these clauses!
Yes, definitely! Ultimately, the client paid up, but it was difficult for my colleague and these clauses would have made those conversations much easier. :)
Damn.
Ha, yeah! I’d only heard about this happening before. Horrible!
Wow this is eye opening 😳. Thanks Smyth
Thanks, Adrian. Glad it was useful. 🙌
Nice post. The part about ownership of IP is really important. I think many new freelancers don't realize they can still own some IP even if they doing the work for someone.
Thanks, Jen. Yes – I hadn’t thought about it until I saw this contract, and I didn’t really understand the point of the IP licensing until it was explained to me in the terms of a graphic designer licensing an image for certain usages. A really useful clause to have in any freelance contract.