8 Points to Smarter Client Contracts

A friend and colleague recently asked me if I had a contract template that I used for clients. I said that I didn't because my contracts are generally heavily tailored to the specifics of an engagement. However, I was able to point to seven different clauses that I like to include to protect myself. Here they are, plus an eight that my publication and IP lawyer, Anthony Elia, had suggested for future use as I was suing an ex-client:

1. Whether a work-made-for-hire contract or not, no rights should transfer until you get the final payment for the job. If the assignment consists of multiple parts and the client pushes back, you might consider transferring rights to parts as payment for them is completed, if you can separate them out. But if a client balks completely on such an arrangement, I walk. If they're not willing to say that they can only use material if I'm completely paid, then they're saying that they're not interested in upholding their end of the deal. I have better ways to spend my time.
2. I charge late fees for payment in arrears. Again, this should be a non-negotiable. Companies want to charge me late fees if I don't pay on time, and I don't see why I should underwrite someone else's financing.
3. Have a clean definition of the work and then an hourly fee for requests beyond that definition. If the client cannot agree to a clear work specification, then it is going to ask for more and more to be done for the same fee, either trying to push the boundaries to get more for its money or because it is confused and inefficient. In neither case am I willing to give something away for nothing in return. That's not to say that I don't do favors for regular clients. I do. But that's with an ongoing relationship where I get plenty of return for my investment.
4. Give a hard deadline for reviews, with drafts past that date getting contractual automatic acceptance. Generally, payment in corporate assignments keys on acceptance of parts of a project. You do not want to be waiting for money because someone or other won't bother to look at what you've done. This protects you against that, largely by acting as a goad to get the client to do the reviews it owes you. Make the deadlines reasonable, but not too long. I find that two weeks max is a good timetable for getting a review done.
5. You are the service provider, so make sure that any legal disputes, whether state or federal court, are in your home jurisdiction. You don't want to go to another state to sue for money owed you. Similarly, get your state's laws as the ones governing the contract. If the client won't go for that, then eliminate the requirement completely. Don't allow them to insist that you agree to jurisdiction in their area, because, frankly speaking, if legal issues come up, you're most likely to be the plaintiff, not the defendant.
6. Explicitly address expenses and any other item that might reduce your income. Don't expect to work such things out after the fact.
7. Make deadlines offset from when you actually get the expected payments. So if the first should be in a month, make it a month after you have the signed contract and deposit. Before you've signed the contract is when you have maximum leverage in negotiation. Once you start work, your leverage decreases exponentially with the time you've put in.
8. The final point is to try to include a clause that has the loser in a legal action responsible for the legal costs of the winner. I had thought this a danger, but my lawyer pointed out that the chances were overwhelmingly likely that I'd be the one having to take action, and getting costs covered if you have a good case becomes a goad to getting people to settle