Essential Business Skills—Contracts for Designers

Let’s face it, contracts aren’t the most exciting part of your job—but they are necessary. And if you want to move up in your firm, knowing the ins and outs of contracts will position you as an asset.

Lucky for you, SEGD is hosting the 2018 SEGD Management for Designersevent later this month in Chicago. This one-day event will give you the tools you need to become a better manager, with topics like business planning, budgets, people skills, business development and even contracts.

Graphic designer, management consultant and educator Shel Perkinswill be leading two of the sessions at the event: Business Planning and Contracts for Designers. The revised and expanded third edition of his best-selling book, Talent Is Not Enough: Business Secrets For Designers,is available from New Riders. Here, Shel shares an excerpt from the book's chapter on how contracts work.

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It’s not unusual to hear a designer say “I don’t use contracts.” In most instances, what this really means is that he (or she) is not well informed about legal issues and is hesitant to even bring them up in discussions with clients. He starts a complex project based on nothing more than a handshake and then just hopes for the best.

Well, it’s quite likely that he does in fact have a contract in place—he’s just not aware of it. This chapter explains the key ingredients that create a binding legal agreement between a designer and a client, and it describes how a court might later interpret that contract in a lawsuit.

The essential elements

We need to start by defining the word “contract.” It’s an exchange of promises among two or more persons or entities (the “parties”), whereby each party agrees to do (or not to do) something.

In forming a contract, there are some limitations. The agreement cannot be for an illegal purpose—it must have a lawful objective. The parties involved must be competent persons who have “capacity,” which is the legal ability to enter into a binding contract. This means they must be of legal age (18 or 21, depending on the jurisdiction) and they must be of sound mind. In a business context, if an individual is representing a company, he or she must also have “authority,” which is legal permission to act on behalf of that company.

The contract comes into existence when one party accepts another’s offer, provided that there is “consideration.” Consideration is an important legal term. It means something of value that is provided by each party—for example, one provides services and the other pays. Consideration must have value that can be objectively determined. It cannot be something subjective, like love. If there is no consideration or if the consideration is not legally sufficient, you do not have a contract.

For designers, the process of forming a contract usually goes like this: You make an offer to the client (“I would love to design your brochure”), the two of you negotiate back and forth on the consideration (the exact scope of work that you will perform for the client and the fee that will be paid to you in return), and eventually the client accepts (“Yes, please do the work”). Offer plus acceptance plus consideration equals a contract.

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Want to know more about contracts? Join Shel at the 2018 SEGD Management for Designers event, April 27 in Chicago. Register now!

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