Make the Most of a Retainer Agreement Template for Contractors
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Many working arrangements fall somewhere between traditional employment and one-time services. These work-for-hire situations call for extra legal protection, which can be provided by way of a retainer agreement.
A template can be a great solution for completing a retainer agreement, but the process can still be confusing for both the client and the service provider. To help, we've compiled a guide that breaks down the most confusing components of these documents — and we also explain why a retainer agreement is so helpful.
In this guide, we will cover the following:
- Basics to Include In a Retainer Agreement for Contractors
- Extra Clauses That a Retainer Agreement Might Need
- Common Problems Worth Avoiding
Basics to Include In a Retainer Agreement for Contractors
As a work-for-hire contract, a retainer agreement should explain which services are expected, how compensation works, and when the job should be completed. These key elements are described in detail below:
- Scope of services. This may be included directly in the contract or as an exhibit provided alongside the agreement. Either way, it should involve a detailed list of the services that the contractor is expected to provide. Don't assume that the contractor will complete any tasks that are not listed in this section.
- Compensation. The retainer agreement should explain that, if the requested services are completed to the client's satisfaction, compensation will be provided as outlined in the contract. This reminder should be followed by a specific description of the compensation and how it will be handled. Don't forget to include details about invoicing, such as when invoices should be sent and whether any penalties will be assessed if payments are not made on time.
- Extra expenses. If the contractor's work calls for additional expenses, a dedicated clause in the retainer agreement should explain procedures for invoicing and itemizing these costs. Be sure to mention whether written consent is required for expenses above a certain dollar amount.
- When services should be completed. Each retainer agreement should clearly state the deadline for the referenced services, as well as a reminder that time is of the essence.
Extra Clauses That a Retainer Agreement Might Need
While the basics highlighted above provide practical information to ensure that the contractor and client are on the same page, extra protection can be obtained with help from these valuable clauses:
- Independent contractor relationship. Without this clause, it's possible for service providers to misconstrue their work as involving an employer-employee relationship. Instead, make it abundantly clear that the provider will act exclusively as an independent contractor.
- Confidentiality. Service providers often require access to protected information. A confidentiality clause can prevent providers from disclosing anything that is intended to remain private. This clause may also instruct the provider to return confidential materials upon completing the agreed-upon services.
- Dispute resolution. On occasion, even a thorough retainer agreement will fail to prevent disputes from arising. As such, it's prudent to include a clause that outlines how potential disputes will be handled.
Common Problems Worth Avoiding
Be sure to avoid these common mistakes as you customize your retainer agreement template and move forward with getting it signed:
- Agreeing to anything verbally. Any agreements between clients and contractors should be made in writing. Keep in mind that statements that seem casual can sometimes be regarded as verbal contracts.
- Neglecting the potential for amendment. Over the course of the work-for-hire process, new information or circumstances may require the contract to be amended. This possibility should be accounted for in the original agreement, along with the need for written permission prior to amending the document.
- Not mentioning all expected services. Contractors should never be surprised to discover that a specific service or task is expected if it wasn't already mentioned in the retainer agreement.
Security For Signing Retainer Agreements
A detailed retainer agreement template can provide helpful guidance, but nothing offers peace of mind quite like a secure eSign process. That's exactly what Nitro Sign provides. Sign up for our free trial to learn more about the many benefits this solution can provide.