Clearly defined client agreements often make the difference between a smooth project and a stressful one. Without written terms, even simple work can lead to scope creep, late payments, or confusion about milestones, roles, and responsibilities.
However, client contracts don’t need to be long or packed with legal jargon in order to be effective. Simple agreements can streamline negotiations and onboarding with new clients while making existing business relationships much easier to handle.
This article talks about the process of creating a simple, effective client agreement. We’ll break down the key elements, explain how to write enforceable terms, and discuss how to automate business contracts with templates that save time and reduce risk.
Let’s jump in.
What is a client contract?
A client contract is a written agreement between a service provider and a client that outlines the terms of a professional relationship. This document (or documents) defines what work will be done, when it will be delivered, how much it will cost, and any other expectations tied to the project.
Most importantly, these agreements are contracts. In order to be legally binding, they’ll also need to include all required elements to make a contract valid.
These agreements can take many forms, including simple emails, legal documents, or standardized templates. In all cases, the goal is to create clarity and accountability for both parties.
Why are these contracts important?
A client agreement helps to prevent common problems like vague deliverables, delayed payments, or shifting expectations.
Notably, these issues happen at all levels of business, from independent contractors all the way to huge, enterprise organizations. In all scenarios, a well-drafted agreement or contract protects both parties and sets a professional tone from the start.
They can also serve as a reference point when confusion arises and help to reduce the chances that a disagreement or dispute will escalate into a legal issue. Without agreements in place, it’s easy for working relationships to deteriorate if one party feels like scope, quality, or timelines have slipped.
Because client relationships are always evolving, the agreements are important even in low-stakes or short-term engagements. Formalizing terms in writing shows attention to detail and demonstrates respect for the project from both parties.
Key elements of a strong client agreement
Like every contract, a client agreement needs specific elements in order to become enforceable.
Many of these elements aren’t just formalities. Instead, they can help to ensure that both sides are clear on what’s expected, how the work will unfold, and what happens if something goes wrong.
Depending on the complexity of the work, client agreements can be short and simple or long and complex. However, regardless of length or format, the best agreements will always cover the same core topics.
Here’s a list of what you should include in any agreement you create:
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Parties involved. Legal names and contact details are necessary for both the client and the service provider. If parties are representing business entities, client information should include the name and title of the person who is authorized to sign on behalf of the organization.
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Scope of work (Offer). This section should describe what services will be provided, what deliverables are expected, and project timelines for completion. Depending on the nature of the services rendered, this section may offer very open-ended workflows or very precise details with specific timeframes and due dates.
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Payment terms (Consideration). Within the contract, parties will need to determine overall pricing, payment schedules, payment methods, late fees and penalties, and similar topics. Milestones, hourly rates, retainers, and other methods are common for service agreements, but this varies between industries.
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Duration and termination clauses. This section can define a contract’s start and end date, as well as the terms related to renewal when work is ongoing. How parties choose to exit the contract, along with what that entails, also fits here.
- E-signature or agreement message (Intent). The agreement will also need a method by which both parties can demonstrate their intent to enter into a contract. This can be accomplished with an electronic signature block for more formalized documents, but something as simple as replying with, “I agree,” in an email may also be enough to create a legally binding agreement.
Keep in mind that this list represents the bare minimum required to form a legal contract. More specialized and specific clauses may be needed, depending on scope, roles, and responsibilities.
Below, you’ll find additional sections that you might want to consider when building a client agreement.
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Confidentiality and privacy. Language and sections that fall into this category can range from confidentiality clauses to non-disclosure agreements and other legal language centered around protecting sensitive information. This won’t be required for every contract, but it’s a common, upfront requirement in many industries.
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Revisions and change orders. This section covers how many revisions are allotted to a client project and how change orders impact the project scope. It’s especially common for contracts to cap the number of revisions, changes, or feedback rounds when working under milestones and systems where rates are predetermined to prevent nitpicking and scope creep, which carry major risks for contracted entities.
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Rights and ownership. If “work product” is being created on behalf of the client, contracts may also include designations about intellectual property rights, which rights are given to the client that commissioned the work, and what rights aren’t provided. For example, a graphic designer may give commercial usage and modification rights to a brand for a specific piece of art while reserving the right to feature the piece in her own portfolio without penalty from the organization.
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Dispute resolution. While everyone hopes that disputes never occur, clauses around dispute resolution set clear expectations for how those issues are resolved. Common approaches include mediation and arbitration. Usually, a contract also includes the governing laws or jurisdiction within which matters must be resolved, if legal action is taken.
- Legal boilerplate. An open-ended category, standard legal boilerplates include items like force majeure, indemnity, severability, and other sections. These are almost always included as catch-all exemption clauses to cover issues that aren’t covered by other clauses or to address problematic situations that arise through no fault of either party.
Together, these elements create a contract that is legally valid, practical, and easy to reference during the course of a project.
Although the number of sections can seem complicated, it’s still possible to create simple agreements that work for everyone. This can be done by using clear, simple language and avoiding convoluted legalese when designing a written contract.
How to write a client contract
A well-written client agreement doesn’t need to be overly complicated, and it doesn’t have to sound like a terms and conditions agreement. As a contract, it needs to reflect the scope of the project, the expectations of both parties, and the terms under which the work will be completed.
In the steps below, we’ve outlined what you’ll need to build a strong client agreement from scratch. Keep in mind that, if you’re working with PandaDoc, you can also start from a pre-made agreement template and go from there.
1. Gather information
Before you start creating your contract, collect all the relevant details for the agreement. That should include each of the following:
- Full name (all parties)
- Contact information (all parties)
- A description of the work to be completed
- Payment information, including rates, terms, and due dates
- Project delivery timelines
- Any client-specific preferences or requirements
Often, it’s best to get everything in writing. Informal notes or email threads are great for this, but a formal proposal is often better. All of the listed details are captured in a proposal process, allowing customers to review the information and tentatively agree before a contract is ever created.
PandaDoc’s free proposal templates can help you collect this information with minimal hassle while providing the tools you need to help prospective customers understand details around pricing, cost, and project execution.
2. Outline the agreement
Once you’ve gathered all the information, begin mapping out the structure of the contract. A standardized contract template can act as a shortcut through this process, as the framework is already built, but it’s also possible to build from scratch within the PandaDoc drag-and-drop editor.
When building your contract, use the major elements discussed in the previous section to create a flexible framework. Make sure to include the following sections:
- Introduction
- Parties involved
- Scope of work
- Payment details and terms
- Duration and termination
- Signoff and final agreement
You may also want to add additional sections based on your business model and the client relationship you’re trying to acquire.
For example, a freelance writer might include a kill fee within the terms of the contract to ensure that a client can’t cancel an active project as a means to avoid payment. Similarly, a client may insist on payment penalties if work isn’t delivered on time.
Once this basic structure is in place, it’s much easier to create a contract that makes sense for both parties. Lastly, if you’re using PandaDoc or a similar tool, be sure to include an e-signature block within your document layout.
Note: Looking for more information? Check out this comprehensive breakdown on how to write a contract.
3. Use clear, simple language
When creating simple agreements, the goal is to use plain language that both parties can easily understand.
While legal terminology has its place, it can slow the process down, as clients have additional questions or need clarification from their legal department on how best to proceed. This is especially true for small business owners, who may not have an in-house legal team and may be relying on external legal support when handling contracts.
Here are a few quick tips:
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Avoid legal jargon and large words like “heretofore” or “hereinafter” that readers are less likely to understand.
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Use shorter sentences, and stick to one idea per sentence when possible.
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Clearly define important terms like “Services” or “Deliverables” early in the contract to avoid later confusion.
- Be specific and offer clear timelines with exact numbers, dates, and conditions.
Keeping the language simple and easy to understand allows business to move faster and removes the need for either side to seek legal advice in order to understand the contract as a whole.
Clear contracts are faster to review, easier to parse, and far less likely to cause problems down the road. This is especially true if a client lacks the legal support or background to handle long-form, convoluted agreements.
4. Review for completeness and accuracy
Small mistakes can lead to big problems later on, especially where contracts are concerned. Punctuation is especially important, as something as simple as a missing comma can cost a company millions.
Take the time to read through your draft carefully, or consider working with a professional writer or editor to ensure that no details are missed. Double-check every section. Make sure that names, dates, deliverables, pricing, and payment schedules are correct.
While building a new agreement, it’s common to copy/paste blocks and language from one contract to the next. If you’ve done this, make sure that the language from one document still applies to the current project. You might also consider transforming commonly used snippets into standardized language and placing them in a shared content library for easier access.
5. Get legal input, if needed
While you won’t always need a lawyer to write a client contract, it can be worth the cost for projects that involve significant financial investment, sensitive data, or long-term commitments.
If you’re ever unsure about how to phrase something correctly or are worried about legal ramifications that you haven’t considered (state or local laws, industry-specific regulations, etc.), then seeking a legal document review might be the best option.
Even a brief review can help to ensure that your terms are enforceable, that your liabilities are limited, and that your contract complies with necessary regulations.
6. Send for review and signature
Once the contract is complete, send it to the client for review. Give them time to read through the terms and suggest any changes. If edits are made, track them clearly so that both parties can agree to a finalized version.
In PandaDoc, most of this work can be done with redlining and commenting tools within a shared document space. This approach keeps an always-updated version of the contract ready for review and prevents the need to email multiple versions of a document back and forth.
After negotiations are complete, it’s time to sign the contract. If you added an e-signature block to your contract, clients can simply sign within the document to initiate the countersign process and finalize the deal.
7. Convert to a template
If you’re expecting to use this type of contract again, we recommend taking the time to convert the final version of your document into a reusable template.
Most contract management platforms allow users to save templates and quickly swap out key details like names, dates, and rates. PandaDoc, along with similar platforms, typically use variables for this. These are merge fields designed to save time by allowing users to auto-fill unique information within a document template.
When creating a template, you’ll need to remove all unique information and replace it with a placeholder or variable, then save the agreement in that format. The next time you need the template, you can duplicate it, swap out the variables for a new set of client information, and send the contract in a matter of minutes.
Expedite contract creation with PandaDoc
Writing contracts from scratch can be a time-consuming process, especially if you’re juggling multiple clients and projects.
That’s where PandaDoc can make a huge difference. By using a platform built for contract creation and management, sales teams can speed up document workflows, reduce manual errors, and support a greater number of customers.
As a platform, PandaDoc offers a wide selection of features that make client agreements easier to draft, customer, and deliver. Start with one of our free contract templates, then tailor it to your project using a drag-and-drop editor and built-in variables that automatically populate names, dates, pricing, and other critical information.
It’s a faster, smarter way to build contracts and other business documents.
Want to give PandaDoc a try? Sign up for a free 14-day trial or get in touch with a product specialist for a personalized demo to learn how PandaDoc can accelerate your sales process.
FAQ
What makes a client contract legally binding?
A contract becomes legally binding when it includes an offer, acceptance, and consideration (something of value exchanged).
Both parties must also intend to enter into a legal agreement, and the contract’s terms must be lawful and clear. In most business contexts, mutual intent is assumed once both parties sign or otherwise agree to contracted terms.
Learn more about contract validity right here.
Can I write a client agreement without a lawyer?
Yes. Many freelancers, agencies, and small business owners write their own contracts, especially if projects are straightforward.
As long as the key elements of a valid contract are present, the agreement is still enforceable. That said, it’s a good idea to get legal input if a project involves high risk, sensitive information, or complex obligations.
It’s also worth noting that contracts sent without a legal review may fall apart in the event of a dispute or disagreement. While this rarely happens, contracts that fall outside of legal bounds may be found unenforceable by a court, meaning that certain provisions (or even the entire contract) could be rendered invalid.
Is an email agreement enough?
In some cases, yes. If the email contains clear terms and both parties confirm agreement (even informally), it may qualify as a binding contract.
However, terms generated in this way are generally harder to enforce and easier to misinterpret. Especially if the offer is very informal, it may be easy for one party to argue a lack of intent.
A structured, formal agreement is more reliable and offers both distinct terms and a clear understanding of intent when paired with e-signing tools.
How do I amend a client contract after signing?
This depends on where you are in the agreement process.
Most e-signing and contract management solutions won’t allow either party to edit a document after one party signs, but it may be possible to withdraw a signature or cancel the signing flow before the other party countersigns. In PandaDoc, senders can do this by switching a contract to the “Expired” status, preventing signers from accessing the document. After that, users could send a new contract with the updated terms.
If the contract has already been signed, both parties must agree to the new terms in order to make a change. This is usually done through a contract amendment, a short document that outlines the changes and is signed by both parties.
Because this process can get confusing, it’s best to avoid contractual changes, when possible.
What’s the difference between a proposal and a contract?
While similar, proposals and contracts serve functionally different purposes within an organization.
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A proposal is a document that outlines a product, service, or solution that a business sells, typically customized to suit the needs of a particular client or project.
- A contract is an open-ended type of document that details an agreement between two or more parties and where goods or services are exchanged.
It’s possible for a signed proposal to become a contract if it includes all the required elements of a legal agreement (offer, acceptance, consideration, intent). Without them, a proposal won’t be enforceable on its own.
Are electronic signatures legally binding?
In most jurisdictions, electronic signatures are legally valid and enforceable, so long as both parties consent to using them and they comply with regional laws.
Many countries around the world, including the US (under the ESIGN Act) and members of the EU (under eIDAS) recognize e-signatures as legally equivalent to handwritten signatures.
However, note that e-signatures must be utilized in a certain way to retain legal validity. For the e-signature to become enforceable, parties must be able to prove that the signer is authentic.
PandaDoc takes steps to capture identifying information (unique signing links, IP address logging, time/date stamps, optional identity verification, etc.) so that it’s more difficult for parties to dispute the legitimacy of the signature during legal proceedings.
