Contracts 101

DISCLAIMER: This is not legal advice. The information presented is solely for information purposes and it is your responsibility to seek advice from a licensed professional.

Contracts are the least sexy topics to discuss but are one of the most important aspects of your business that you may overlook, especially in the beginning.

Just because you’re a newbie or not bringing in boatloads of money doesn’t mean you shouldn’t put contracts in place now (or at least start flexing the muscle).

Thankfully, I had a ton of experience with contracts throughout my professional career (thank u, Corporate XOXO), but for those who haven’t, this newsletter should help explain the basics and cover your a$$.

Also - if we gonna get wild and woo up in this b*tch - how could you possibly be ready to accept the 5-figure brand deal or client you’ve been wanting if you don’t have the foundation in place or the systems ready to go?

You can’t - so do it now and manifest that sh*t like it’s already happening.

WHY CONTRACTS ARE IMPORTANT

Contracts are crucial because they define terms, obligations, and rights, which reduces the risk of disputes and legal issues.

Basically, it creates trust and accountability between you and another person or company to do what they said they would.

KINDS OF CONTRACTS

There are a ton, but here are 4 types of contracts you may engage in during your journey as a creator (C), freelancer (F), or influencer(I):

Sales Agreements: Govern the sale of products and services, covering pricing, payment terms, and delivery (C/F/I)

Non-Disclosure Agreements (NDAs): Protect sensitive information in various business relationships (F/I)

Professional Service Agreements: Include fixed-price, time and materials, and retainer-based contracts for service delivery (F/I)

Adhesion Contracts “Take It or Leave It”: Standardized, non-negotiable agreements often used in software and online services - think of any products that have a “check here to agree to the terms & conditions" (C)

READING CONTRACTS

Contracts are actually easy to read… if you can understand their fancy lingo. This isn’t something you’re going to learn overnight, but practice makes perfect.

When reviewing any contract, firstly, focus on the obligations and rights of each party, ensuring you understand your responsibilities and what you are entitled to receive (basically, what you’re doing in exchange for money, product, etc)

Next, you’ll want to look out for clauses related to termination, dispute resolution, and penalties for breaches (basically, what happens if things end early or a contract is not upheld).

If you’re too overwhelmed or literally can’t understand it (they be out here wildin’ with this language sometimes), use ChatGPT and other AI tools to help.

You can either upload the document directly into ChatGPT or copy and paste each contract section and have it analyze it and tell you in basic terms what it covers and what to consider for review or revision.

If you want ChatGPT legal prompts + basic contract templates, download our FREE Contract Pack 💜

Influencer Contracts

Having engaged in a ton of brand deals, I know Influencer contracts like the back of my hand… but mostly because I f*cked up a lot in the beginning 😬

You can imagine my surprise when one day I was scrolling on Facebook and saw my own damn self plastered on an Ad that I had no idea about.

The first brand deal that I ever engaged in was with Fishbowl (great company and mission).

They paid me $2,560 for 4 videos and we were under contract for 4 months (1 video/month).

I was so sh*t-my-pants excited about it that I didn’t read the contract fully, so I overlooked the section on Usage Rights.

Usage rights for influencers specify how, where, and for how long a brand can use the content created by the influencer.

Under this contract, I DID agree that they could use my content… I just didn’t know to look for it 🤷🏻‍♀️

After this experience, I now take my time and do my due diligence.

And, If I sign a Partnership Agreement that exceeds 6 months, requires my participation in larger projects versus just creating content, and/or will be over $10k in total revenue, I’ll hire a lawyer (there’s a ton of creator-focused lawyers out there, but I used one of my podcast guests, Jay).

WHAT TO LOOK OUT FOR

Usage Rights: Ensure the contract specifies how long and in what ways the brand can use your content, including any additional costs for extended or different usage.

Exclusivity Rights: Look for clauses that limit your ability to work with competing brands, and understand the scope and duration of these restrictions.

Deliverables: Clearly define what content you’re expected to create, including the type, quantity, and quality of deliverables required.

Timeline: Check the deadlines for your deliverables and the schedule for when you will receive payments to avoid any surprises.

Intellectual Property: Review who owns the rights to the content you create and if you’re able to use it for your own promotion or portfolio.

Contract Do’s & Don’ts

 💜 DO: Negotiate payment & get creative with it

💜 DO: Review usage & exclusivity rights + payment terms

💜 DO: Charge more for rushed timelines on deliverables

💜 DO: Send a W9 in advance with your biz info

PS - Sign up for Novo to get a FREE LLC with Legal Zoom 👇

💔 DON’T: Be afraid to push back on terms & payment

💔 DON’T: Give usage or exclusivity rights without additional $$$

💔 DON’T: Feel obligated to sign with a brand for clout/reach

💔 DON’T: Discount the hard work you’ve put in to create a fan base

Freelancer Contracts

Freelance work kind of fell into my lap, so I was a bit late to the contract game when it came to client work.

THANKFULLY, I’ve never really had an issue with any of my clients (literally so grateful), and on the rare occasions that I had clients pay late, it was always immediately paid once I reminded them (we’re all human after all).

BUT, I have heard horror stories from some of my colleagues who had to chase down 5-figures worth of late payments, or didn’t get paid at all, and having a tight contract (and doing a gut check) can help on most occasions to prevent this from happening.

WHAT TO LOOK OUT FOR IN CLIENTS

I need to talk about this before we get into contracts because even the best contracts can’t weed out the bad clients. Some things to look out for:

Unclear Expectations: If a client is vague about their needs and goals, it can lead to misunderstandings and dissatisfaction.

Unrealistic Demands: Requests for excessive revisions or work beyond the agreed scope may signal a client who is difficult to manage.

Unreasonable Deadlines: Pressuring you to complete tasks in an unrealistic timeframe can lead to stress and compromised quality.

Unwillingness to Pay: Hesitation or refusal to agree to fair payment terms or delaying payments can be a red flag for financial instability or exploitation. Also, discounts should be avoided at all costs. I know you wanna get your bag (especially in the beginning if you’re making nothing) but almost always, my discounted clients have always been the biggest pain in my a$$.

Disrespectful Behavior: A client who is rude, dismissive, or unprofessional in their interactions indicates a toxic working relationship (girl bye).

WHAT TO LOOK OUT FOR IN CONTRACTS

Scope of Work: Define precisely what tasks are included to avoid scope creep and ensure both parties are on the same page (I personally struggle with this).

Payment Terms: Clarify how much you will be paid, when you will be paid, and the method of payment to prevent misunderstandings (I use Novo for my invoices 💜).

Deadlines: Establish clear deadlines for project milestones and final deliverables to keep the project on track.

Revisions: Outline how many revisions are included and any extra costs for additional changes to manage client expectations (I SHOULD have done this).

Intellectual Property Rights: Specify who owns the work once completed and if you retain any rights for personal use or portfolio.

Termination Clause: Include terms for how either party can end the agreement if things aren’t working out, including any notice periods.

Client Responsibilities: Specify what you need from the client (e.g., access to materials, feedback) to ensure you have everything necessary for the project’s success. You can’t do your job if they don’t give you what you need, and that’s not your fault.

Contract Do’s & Don’ts

 💜 DO: Add specifics about refunds (if/when)

💜 DO: Add a flat hourly rate for additional projects

💜 DO: Add a clause about late payments or failure to pay

💜 DO: Add a 30-day notice when ending a contract

💔 DON’T: (or try not to) Sign month-to-month contracts

💔 DON’T: Feel bad when poking a client about being late on payment

💔 DON’T: Do all the work without at least 50% upfront payment

💔 DON’T: Barter or discount your services & your skills

Creator Contracts

As a Creator, there’s a lot you’ll create that doesn’t need a contract, but there are some things that you should have just in case.

A good rule of thumb is always to have a contract, disclaimers, or a checkbox of “accepting the terms and conditions” to cover yourself just because generally, people can suck lol.

Often, a lot of us Creators are teaching or creating content about subjects that can, if not followed properly, create a negative impact on someone.

For example, a baking Creator might release a paid course on comfort cooking, and someone who has Celiac disease may claim that they bought it and had a serious reaction to the food they made from said Creator… Even if that Creator never claimed that their food was fit for Celiacs.

It would be a far stretch for that customer to sue or hurt that Creator through defamation, but people are bored and crazy, and it can happen.

Again, rule of thumb: always cover your a$$.

When I first started Corporate Quitter, I got a lot of angry comments and DM’s from people saying “You made me quit my job and now I can’t make rent”

Even though I had never spoken or worked with literally ALL of these people who were finger-pointing, and I certainly didn’t make them do anything, I still covered myself in any way that I could 👇

DOWNLOADABLES & DIGITALS

Your contractual obligation won’t be as high when you’re not physically involved and subject to error, BUT you still need to put fail-safes in place, especially as the price point and risk go up.

Most digital products or content will not need contracts, but you should have disclaimers everywhere at a minimum so you are not liable (i.e. “this is not legal advice”).

If you’re talking about particularly touchy subjects like money, health, etc. you can add Adhesion Contracts (“take it or leave it”) before people access anything.

Rule of thumb: be truthful, be honest, be transparent.

You can never get in trouble if all you did was tell the truth, try your absolute hardest to give the most value, and/or have the best of intentions.

COACHING & 1:1 WORK

When your 1:1 energy is involved, more risk is involved because it leaves more room for error and liability.

Plus, dishonest and sh*tty coaches have been running rampant in the world and have tarnished the reputation of the industry as a whole, but remember this doesn’t reflect poorly on YOU.

This is partially the reason I’ve been hesitant for years to work with people in this capacity, and only this past December did I start opening up my energy to allow new connections or strangers to step in.

Contracts are DEFINITELY a requirement (in my opinion).

Coaching Goals: Clearly define the objectives of the coaching sessions and the outcomes expected from the client’s participation.

Session Details: Specify the frequency, duration, and format of coaching sessions to set clear expectations for both parties.

Cancellation Policy: Include terms for missed sessions, rescheduling, and cancellations to manage scheduling conflicts and respect for time.

Payment & Refunds: Detail the costs of coaching services, payment schedules, and methods to avoid any disputes over financial arrangements.

Boundaries and Ethics: Outline professional boundaries and ethical guidelines to maintain a respectful and effective coaching relationship.

Liability Waiver: Include a disclaimer to limit your liability for outcomes from the coaching sessions, clarifying that results are not guaranteed.

Commitment Terms: Define the length of the coaching agreement and any terms for extending or ending the coaching relationship.

Conflict Resolution: Establish a process for addressing and resolving any disputes or issues that arise during the coaching relationship.

Contract Do’s & Don’ts

 💜 DO: Set clear expectations

💜 DO: Always, always add disclaimers

💜 DO: Protect your Intellectual Property

💜 DO: Regularly request feedback and create a safe space to share

💔 DON’T: Take your customer or client’s lack of effort personally (they have to care about the transformation more than you do)

💔 DON’T: Overpromise and underdeliver

💔 DON’T: Overextend yourself to the point of resentment

💔 DON’T: Undercharge and undervalue your work and knowledge

Push or Pull Back?

It seems like many of us are under a pressure cooker right now (at least that’s what I’ve gathered from what my clients and followers have shared with me).

Is this pressure cooker moment a time for you to ramp it up and go full force… or is it a time to take a pause, do an audit, and reel back just a bit?

Find out in our latest episode of Corporate Quitter, where I share some key indicators for identifying when it's time to push forward or scale back in your business 💜

Episode 152. Ask Gabby: When To Push Forward or Pull Back In Business