How to Write a Contract Between Your Agency and a Client

Contracts are the backbone of all business endeavors and form the boundaries of business relationships. Having a solid contract between your agency and a client is imperative to managing the expectations of each party.

Contracts are binding agreements that establish the terms agreed on by your agency and the client, but they do not have to be excessively long, complex documents that only an attorney could understand. Depending on the laws of your state, simple contracts that use plain English to spell out the terms of the agreement between an agency and a client are often sufficient.

The first step in writing contracts that lead to success is having a sound system of contract management. So what is contract management? Contract management is how an organization, business, firm, or agency keep their contracts organized. Depending on the size of your business, and the number of contracts you deal with, there are numerous options for contract management.

How to manage contracts

  • Contract management software—contract management software is usually a cloud-based storage solution for contracts. The basic contract management software requires users to tag the documents and manually enter dates, terms, and other relevant information. The contracts are then accessible online and searchable by keywords or phrases. Most contract management software allows you to set alerts for approaching deadlines manually.
  • AI-driven contract management software—the more sophisticated version of contract management software can do everything the standard versions do, but machine learning allows the software to extract all relevant information. Artificial intelligence vastly reduces the amount of data that is manually entered and reduces the risk of human error. AI-driven contract management software comes with pre-designed templates and also allows users to create their own templates for contracts.
  • In-house or outside counsel—many businesses still prefer to let their attorneys deal with all contracts. Having an attorney draft, review, and manage each contract can be a costly way to manage contracts.

How to write a contract

How to Write a Contract Between Your Agency and a Client

Most agencies prefer to manage their contracts in-house and rely on standard templates to create a contract. The problem with standard templates is that the laws that govern contracts are continually changing. If you are not careful, your contracts can be out-dated or filled with loopholes that can create problems.

To effectively write contracts that are legally binding, the necessary knowledge and tools include:

  • Know the applicable laws that govern the contracts you deal with and make sure to keep abreast of changes
  • Use a contract management software that suits the needs of your agency
  • Check to ensure that the templates offered by your contract management software are routinely updated
  • Make sure that the information in your contracts is secure, whether stored online or in a filing cabinet

Contracts, no matter how much legalese they contain, consists of several essential components. To write effective agreements between your agency and clients, make sure they include:

  1. An overview—the overview establishes the parties involved in the contract and summarizes the objective of the agreement. An overview should also clearly state the start and end date of the contract, with relevant dates and deadlines throughout the life of the agreement.
  2. Responsibilities—describe what each party agrees to do throughout the lifecycle of the contract.
  3. Scope—the scope is the meat of the contract that lays out the details of the project deliverables. The scope should clearly explain what the client can expect from the agency and what the agency will receive from the client.

The scope should be written with careful clarity to make sure it includes specific information about the terms all parties will be working under throughout the length of the contract. In addition to ensuring that the scope covers everything certain proprietary rights included, this is also where you will want to outline what is not included. The scope of a contract is where the expectations from all parties are clearly managed.

  1. Ownership—ownership establishes what happens after the contract. Will the agency retain, or will those be transferred to the client? The ownership clause controls whatever goods, services, or intellectual property the agreement governs.
  2. Monetary exchanges—whether it is fees, payment for goods, payment plans, or refunds, there should be a clear section of the contract that deals strictly with the money exchanged throughout the contract.
  3. Termination—this portion of the contractual document should clearly state the terms under which the contract can be canceled. If the agency or client does not fulfill the contractual obligations, the other party has the right to terminate the contract. The termination clause should also include any additional terms or violations that can result in termination of the contract.
  4. Signatures—in all states, excluding verbal contracts, a contract must be signed by both parties to be binding.


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