What should be in a client contract

When emailed quotes and goodwill are all you have

You send a quote by email, the client replies "great, go ahead", and you start work. It has been fine so far, which is the only reason it still feels fine. The first time a client pays 60 days late, changes the job halfway through, or says they never agreed to that price, you will find out how much a thread of emails can actually hold up.

A client contract is a written agreement that says what you will do, what the client will pay, and what happens when something goes differently from plan. Its main job is to make the awkward conversations short, because the answer is already written down.

A quick note before the detail. This is general information for Australian small businesses, not legal advice. Where a lawyer is worth paying, I say so.

The method: write down your answers to ten questions

A good contract is mostly your own answers to plain questions, in order. You do not need legal phrasing to get it started. Work through these, writing a sentence or two for each.

1. Who is agreeing to this? Use full legal names and ABNs (Australian Business Numbers) for both sides. "Dale" is not a party to a contract. "Dale Smith trading as Dale's Mobile Mechanics, ABN [xxxx]" is.
2. What exactly will you do? Describe the work, the finish line, and the things you are not including. Leaving out what is excluded is where most disputes start.
3. What will it cost, and when is it due? State the price, whether GST is included, when you invoice, and how many days the client has to pay.
4. What happens if they pay late? Decide whether you will charge interest, pause work, or both, and say so.
5. What happens if the job changes? Say that extra work is quoted and agreed in writing before you start it.
6. What does the client need to provide? Access, information, approvals, and a reasonable turnaround time. Delays on their side should not become your cost.
7. What if either side cancels? Set out notice periods and what is still payable for work already done.
8. Who owns what you produce? This matters most for creative and digital work. Say when ownership passes, which is commonly on full payment.
9. What are you responsible for if something goes wrong? Say what you will fix, and for how long.
10. How are disagreements handled? A simple step of "raise it in writing, we talk within 14 days" resolves more than you would expect.

A worked example

This is a made-up example, not a real client. Say a mobile mechanic, Dale, services vans for small tradie businesses. His emailed quote reads "Service and brake pads, $640, done Thursday." Here is how the ten questions change that.

• Scope: "Logbook service and front brake pad replacement on one vehicle at the client's site. Rotors, fluids beyond the standard service and any other repairs are excluded."
• Price: "$640 including GST. Invoice on completion, payable within 14 days."
• Late payment: "Overdue invoices may be charged interest at [xx]% per year, and no further bookings will be taken until the account is current."
• Changes: "If the mechanic finds additional faults, he will phone or message a quote first. Nothing extra is done without a yes in writing."
• Client's part: "The vehicle will be accessible and on level ground at the agreed time. If access is not available, a call-out fee of $[xx] applies."
• Cancellation: "Cancel with at least 24 hours' notice at no charge. After that, the call-out fee applies."
• Responsibility: "Workmanship is guaranteed for [xx] months. Parts carry the manufacturer's warranty."

That is under a page. The quote still reads like a quote, but every clause answers an argument Dale has had, or could have, with a customer.

What good looks like versus what most people produce

Most small businesses end up with one of two things. The first is a template downloaded from the internet, full of phrases the owner does not understand and clauses for situations that will never happen. The second is a single line at the bottom of an invoice saying "payment due in 14 days", which is a start but covers about a tenth of what goes wrong.

A good contract is short, specific to your work, and readable by the client without help. Each clause should trace back to something that has gone wrong for you, or could. Dates and dollar amounts should be written out. Where you have a choice, such as late fees, make the choice rather than leaving a blank.

Plain language also helps you legally. Australia's unfair contract terms rules can apply to standard form contracts (the take-it-or-leave-it kind you give every client) with small businesses, and a term that is very one-sided can be struck out. The Australian Competition and Consumer Commission publishes guidance on this. A fair, clearly written contract is easier to defend than an aggressive one.

Three mistakes that make the exercise useless

1. Writing it for the client you have, not the one you might get

If you only picture your friendliest regular, you will leave out the clause you need for the one who disappears with an unpaid invoice. Write it for the worst realistic client. The good ones will not mind.

2. Being vague about scope

"Website help" or "general bookkeeping" can mean anything, and the client will assume it means more than you do. Name the deliverables, the number of revisions, the frequency, and the exclusions.

3. Copying clauses you do not understand

If a template says you "indemnify" the client (promise to cover their losses) and you never worked out what that means, you may have just agreed to pay for things well beyond the value of the job. Delete anything you cannot explain to a friend in a sentence, or have it checked.

Where a lawyer is worth paying

You can write the basics yourself. A lawyer earns their fee in a few specific places:

• Limiting your liability. Capping what you could owe if something goes wrong is valuable, but the wording matters and some rights cannot legally be removed. Australian Consumer Law guarantees apply regardless of what a contract says.
• Intellectual property. If you create things of real value, such as designs, software or written work, ownership and licensing wording is worth getting right.
• Large or long jobs. If one client represents a big share of your income, or the contract runs for years, pay for a review.
• A client who sends their own contract. Bigger organisations often do. Read it closely and have a lawyer look at anything involving indemnities, liability, or exclusivity.
• Personal information, staff or subcontractors. Privacy obligations and employment rules have their own requirements.

A sensible approach is to draft it yourself first. A lawyer reviewing a clear draft usually takes less time than one starting from nothing, so it costs less.

What to do with it once it is written

This is the step most articles skip, and it decides whether the document is worth anything.

1. Attach it to every quote. Put a line in your quote template: "By accepting this quote you agree to the attached terms." Do it every time, including for regulars.
2. Get a clear yes. A reply of "Agreed" by email, or a signature through a free e-signing tool, is enough for most small jobs. Save that reply.
3. Introduce it to existing clients gently. Tell them you are putting terms in writing for all clients from a certain date, and that it protects them as well. Most will not blink.
4. Keep one master copy and a folder of signed ones. Name them by client and date so you can find them in a minute, not an hour.
5. Use it. When an invoice goes overdue, quote the clause. When the scope grows, point to the change clause and send a revised quote. A contract you never refer to teaches clients it does not matter.
6. Review it twice a year. Each time something goes wrong, add or tighten the relevant clause. After a year it will fit your business closely.

Doing this properly takes an afternoon. If you would rather have it done for you, a Contracts & Agreements built from your own answers is $99. Either way, the most useful thing is to have the terms written down before the next job starts.