As a small business lawyer, I’ve seen firsthand the importance of having contracts in place when working with clients in the digital marketing industry. The world of digital marketing is full of constant change, and it can be tempting to rely on informal agreements and handshake deals. However, this can lead to costly misunderstandings and disputes down the road. In this blog post, I’ll discuss why having a contract is crucial for digital marketers and highlight five key areas to cover in any contract with clients.
First, let’s start with why contracts are essential in the first place. In short, a contract is a legal document that sets out the terms of the agreement between two parties. It establishes expectations, responsibilities, and obligations and can help prevent misunderstandings and disputes. When it comes to digital marketing, an effective contract can protect both you and your client by outlining what services you will provide, what the client will pay, and what will happen if either party breaches the agreement.
Now, let’s turn to the five crucial areas that I recommend you cover in any contract with clients in the digital marketing industry:
Scope of work
The scope of work is a critical component of any contract. It sets out precisely what services you will provide and what is expected of the client. This section should be as detailed as possible and include timelines, deliverables, and any specific requirements or expectations. It’s also a good idea to include a provision allowing changes to the scope of work, with clear guidelines for how those changes will be requested and approved.
Linked to the scope of work are the disclaimers required to manage clients’ expectations about the results of any proposed digital marketing campaign. For example, clients expect a return on their investment when they spend on ads in addition to your digital marketing service fees. A professionally drafted disclaimer will manage client expectations so refund requests are minimised and managed.
TIP: This is where you use your contract to limit scope creep. If you tend to say “yes” to every client request, whether part of your arrangement or not, this clause is for you.
The payment terms section outlines how much the client will pay for your services and when those payments are due.
Your contract should also be clear about payment for digital advertising costs, for example, Google Ads and Facebook advertising. Who is responsible for these payments, and how are these payments to be managed?
It’s important to be clear about payment terms from the outset to avoid any misunderstandings or delays in payment. This section should also address what will happen in the event of late payment, including whether any interest or penalties will apply. Check out my tips for managing late payments here.
TIP: This section could also include who pays for advertising spend, for example.
Digital marketing often involves the creation of intellectual property, such as website designs, marketing materials, and social media content. The intellectual property section of the contract should address who will own any intellectual property created during the engagement and what rights the client will have to use that property. It’s also a good idea to include provisions regarding confidentiality and non-disclosure of proprietary information. My blog post about Protecting Your Ideas is also worth a 5-minute read.
TIP: Be sure to understand what obligations and ownership rights you have over the resources you use for your clients too.
Liability and indemnification
The liability and indemnification section of the contract addresses what will happen in the event of a dispute or legal claim. This section should outline the limits of your liability and any indemnification provisions that require the client to defend and hold you harmless in the event of a claim. Again, it’s essential to consult with a lawyer when drafting this section to ensure that it is comprehensive and protective.
Termination and cancellation
Finally, the contract should address what will happen if either party decides to terminate the engagement before its completion. This section should outline the circumstances under which either party may terminate the agreement and what will happen to any work or payments already made. It’s also a good idea to include provisions for how the parties will handle any transition or wind-down of the engagement.
In addition to these five key areas, other provisions may be relevant depending on the specifics of the engagement. For example, if you are working with a client in a highly regulated industry, you may need to include provisions related to compliance with applicable laws and regulations. Or, if you are working with a client in a foreign country, you may need to address jurisdiction and governing law issues. Again, it’s best practice to define this regardless of your client’s location.
Having a contract in place is critical for digital marketers working with clients. A well-drafted contract can protect both you and your client by setting clear expectations and obligations and can help prevent misunderstandings and disputes.
I can draft your legally robust Digital Marketing Service contract customised specifically for YOUR digital marketing service the way YOU run it, and that speaks to the clients you love working with.
A customised drafting service comes with an intensive coaching session about your current business processes, the legal framework you need to operate in and advice about any other legal or business issues you may have.
For a short time, the Custom Draft (Digital Marketing Service) Contract service is available for $1650, including GST – payment plans are available on request. (Price valid until May 31 2023). Book a complimentary chat to get started.