7 Items Every Contract Should Have

I’m not a lawyer and I don’t play one on TV. But over the course of the years at Firstborn I’ve had experience working on many client agreements with the help of our attorneys. What follows is a distillation of some of the items we always look for and while this is based on our work as a digital agency, most of these issues can apply to any company selling creative services.

As a rule, there are 2 types of contracts that we work with. A master services agreement (MSA) is what we usually sign when we’re an agency of record for a client or will be doing ongoing work with a particular company. We then sign off on individual statements of work (SOW’s) for each specific assignment that comes up and the terms of each SOW are governed by the MSA. For work that’s on a project by project basis, the terms and SOW are combined into one proposal document.

Scope of work
The SOW contains a detailed and unambiguous description of what it is we’re delivering to our client. The format may vary and could include a content outline, set of wireframes, creative brief, illustrations or a combination of the above. This is the road map that will guide our work and provide the reference point for both parties should any items fall outside of the initial scope. In some instances, defining the scope of work is part the assignment and in those cases, we charge a fee for an initial discovery phase, out of which a detailed scope, cost and timeline document is delivered.

Limit of Liability
We ask that there be a cap to the amount we’re liable for, usually the amount that we’re paid for the project. Having an open ended liability puts us at great risk, especially a relatively small company such as ours that can be put out of business by frivolous lawsuits.

Indemnification, Representations & Warranties
As a creative agency, Firstborn warrants that our work will be original. However, we need to be very specific about what exactly we’re liable for. In many cases we may be using materials ideas or product claims that are supplied to us by our clients and so we make sure there isn’t a broad representation that would include those materials we’re not responsible for.

Payment terms/schedule
The payment terms and schedule are clearly laid out in all our agreements. It’s Firstborn’s policy to receive 50% to start work and the rest paid out during various milestones in the production timeline.

Ownership
Since what we create for our clients is a work for hire, our clients own all the deliverables. We do, however, retain ownership of our source code, the reason being that we have a right to the methods and knowledge that we use in the production of work for all our other clients.

Termination
If the contract is cancelled for a reason other than our negligence or misconduct, it’s only fair that we be given reasonable notice so that we can re-assign the team that was allocated to the project.

Credits
The ability to showcase our work is very valuable to us and so we ask that we be able to publicize our participation in the project subject to, of course, our clients’ permissions.