New to agreement templates? Read our guide below.
As a freelancer, the best work you do is your creative work, whether that’s graphic design, writing, photography and more.
But among the most important work you do is creating an agreement with clients, one with clear terms that’s agreeable to both sides.
Agreements can be created for many different situations. Somewhat different than a contract, but with many similarities, agreements can serve important roles for freelancers. Here’s an example.
Clients sometimes ask freelancers to work together, like an agency would have teams working on projects together. Or maybe your workload has expanded to the point that you’re turning down work, or you want to bid on a job that needs a variety of skill sets. In these instances, a collaboration agreement would be important, so that each freelancer knows their roles and responsibilities.
That’s one instance where an agreement can be beneficial to landing work. And rather than creating an agreement each time you’re asked for one, having an agreement template can save you a lot of time and ensure you get it right. So let’s look at everything you need to know about agreement templates.
What is an agreement template?
Agreements are used in different situations, to detail a specific transaction, outline roles and responsibilities for a certain project, or provide specifics about work performed on a payment schedule.
Here are some examples:
- A collaboration agreement, in which you enter into an agreement with other freelancers to work on a project together.
- A consulting agreement that outlines consulting work, which helps to prevent scope creep.
- A non-disclosure agreement, in which two parties explore a potential business relationship.
In each of these examples, an agreement protects you and your client, and others that are party to the agreement. In the non-disclosure example, both parties can share resources or information without risk of disclosure. Once both parties sign off on the agreement, it becomes binding.
A retainer or service agreement will provide details on the rate of pay in exchange for the services you’ll provide to the client on a regular basis. This is much easier than having an agreement for each block of work to be done.
An agreement is a mutual understanding between yourself and the client, and it creates clarity and prevents disputes.
An agreement template, then, is a document that is created that can be used again and again. The content that can be reused is standardized, which means it can be used for any type of agreement. An example is instructions about an “out clause,” in which the agreement ends early. Then there are blank areas where client-specific, agreement-specific or project-specific information is inserted.
When you need to create a business agreement, you open your agreement template, make the changes necessary, and save it with a new name specific to its purpose. It can then be sent to the client or other parties to the agreement. Formats such as a secure PDF are easy to send, download and share, or print for paper filing.
Why use an agreement template?
An agreement template may take some time to set up, but it will save you time in the long run. That’s because you’ll be able to complete sections that are standard for any type of agreement, and then use them every time you enter into agreement with a client.
An agreement template will also protect you and your clients. By ensuring you get important terms correct, such as late payment terms, you won’t have to worry about the language each time you write an agreement. You should have a legal review of the template, but once that’s done, your terms will be airtight.
Then, whenever you take on a new client, or a new project, you use the agreement template as the basis for the deal, which is particularly helpful when you do a specific type of work for multiple clients.
But whatever type of work you perform, an agreement template means very little information is changed each time you need an agreement. There will be consistent information used each time, such as late payment terms, and then information that’s specific to the client or the project, which is what you will adapt in each circumstance.
You could even have different agreement templates for different situations. Perhaps you do project work on a regular basis, and you also work on a retainer basis with several clients. You could have an agreement template for each situation.
Types of agreement templates
Besides a generic agreement template that can be used for general situations, there are a few specific kinds of agreements:
Professional Services Agreement Template
When offering professional services to your clients, make sure to use an adequate agreement template for professional services. Protect your work!
Simple Agreement Template
For the most simple requirements, a simple agreement template is all that you need. It usually contains only the must have clauses, ensuring a seamless experience for your client.
Service Level Agreement Template
When establishing the service level with your new client, make sure to sue a service level agreement template in order to capture all of the relevant information and protect yourself.
Basic Agreement Template
A basic agreement template is flexible and usable for the most basic types of work. Quickly adjust it to your needs and send it for signature.
Blank Agreement Template
A blank agreement template is ready to be filled in with your details, the cliend details, work specifications and payment details.
Printable Agreement Template
If you need to hand sign your agreement, the best way to go is using a printable agreement template.
Personal Agreement Template
Having a personal agreement template ready for any type of work is usually a smart move. Fill in the details that are always needed and have it on hand.
Standard Agreement Template
A standard agreement template contains the clauses which you should not work without. Make sure you tweak it for your new project and get to work.
Agreement templates for various uses
Agreement templates vary by industry
7 common mistakes to avoid while using agreement templates
Agreement templates are useful, but there are still some pitfalls in using them, unless you’re aware and avoid making mistakes.
At Bonsai, we’ve worked with 150,000+ freelancers and most of them are in the top 1% category in terms of earnings. We asked them what their top mistakes were and how they would avoid each.
Here are the 7 mistakes to avoid when using agreement templates:
Not signing the agreement.
Your agreement template needs to have space for your signature and your client’s signature. Even in those instances where you may think your relationship is close enough that you don’t need sign-off, you do. Even simple agreements can go sideways, so in order to be legally binding, you must have signatures from yourself and any other party to the agreement.
If it’s a collaboration agreement, there should be signatures from every individual involved. If you think it’s too much hassle to get agreements signed and printed by everybody, explore an e-signature option. A legal battle will be a much bigger hassle than the signature process.
Not having a legal review completed.
Whether you’re working with a client for the first time, or you’ve worked together for many years; whether you’re simply in an “exploratory phase” or you’re starting a major project; whether you’re doing a one-time job or working on a retainer; you need to have legal review for any contract or agreement.
If you have an agreement template, it’s even more necessary, because you could reuse the same terms, only to find out too late that they’re faulty. Have your agreement template reviewed by a lawyer, who can ensure that all your legal terms are legitimate and binding. You’ll be protecting yourself and your client with good contract language.
Not having enough detail.
Even for a deal that seems simple, like a non-disclosure agreement, there must be enough detail to avoid confusion and ultimately disputes. In the case of a non-disclosure agreement, that includes definitions of terms such as “confidential information.”
In the case of a project contract, that includes details about the project deliverables, how changes or additions are made, roles and responsibilities of each party, and more. Without detail, there’s always room for interpretation, which can lead to scope creep, missed timelines, overrun budgets, and potential legal battles.
Using the client’s agreement.
As a freelancer, it’s important to keep your clients happy. However, you don’t want to risk your business in an effort to please others. Once you have created a solid agreement template or contract template, it’s important that you use them whenever you’re engaging in a new project or with a new client.
While your contract or agreement can be adapted for the situation, from short and straightforward to long and complex, it does need to include the relevant terms that are necessary for your business. Don’t compromise your hard work by accepting an agreement that’s missing what you need. If nothing else, make sure all the terms that are in your agreement template are included in any contract you may accept from a client.
Not having clear payment terms.
Even with clients that have hired you in the past, you must include clear payment terms in any agreement or contract in which you will be paid for your work. That could include a down payment, perhaps if you’re working with a first-time client. It should include milestones with a payment schedule for particularly long projects.
You don’t want to risk cash flow for a long project or work that drags on beyond what you anticipated. It should also be part of retainer agreements, so that you can be sure you’re getting paid on a regular basis for your regular work. Payment terms also need to provide a deadline for payment that’s clearly stated - such as “The Client has 15 days to pay invoices.” And, when payment is due, be sure to send your invoice on time.
Not including late payment charges.
While it might feel uncomfortable to add this type of clause, it’s essential that you include late payment charges as part of any contract or agreement. There are different ways to charge for late payment, from a percentage to a flat fee. A good way to do it is by stating a percentage for a late fee which is charged against the total amount due.
Late fees are generally between 2% and 10% a month, and are usually not compounding, meaning you would calculate the amount owed each month after the invoice’s due date. Failing to include late fees opens the door to not getting paid promptly, or not getting paid at all.
Not including an “out” clause.
While every relationship with a client starts out rosy, there are always instances when that changes. Or, situations change and the work no longer needs to be completed, or can’t be finished. It’s good to include some kind of “out clause,” which provides for a payment if the contract or agreement is ended early.
You can choose the type of payment option, depending on the nature of the work, the size of the budget and other factors. A flat fee is one option, or you can charge a prorated amount based on the amount of work that was completed. Once again, it may seem awkward to include, but you’re running a business, and you need to protect that business.
We’ve baked in a lot of the best practices mentioned in these tips in our own agreements tool called Bonsai. It costs $19 per month and is used by 150,000 freelancers. Give it a try with a 14 day free trial.
What should a good agreement template include?
While there will always be sections of agreements and contracts that are specific to a project or a client, there are components that need to be part of every agreement template.
Using a freelance contract software like Bonsai will ensure you get access to the best templates, with all the correct terms, and protect yourself and your clients.
Let’s look at what a good agreement template should include, using one generated by Bonsai, in this instance a Non-Disclosure Agreement.
Here’s what it has that makes it an excellent agreement template:
- Terms and language are clear, including any necessary definitions. In this example, “Confidential Information” is clearly defined, along with other relevant terms, avoiding any kind of ambiguity.
- Contracts are customizable based on your needs. Edits are easy to make.
- Scope of work is drafted for you, which is easy to edit, and you can attach a statement of work.
- Bonsai agreements and contracts have been reviewed by top contract lawyers.
- Bonsai contracts can be used for any type of company, including sole proprietorships, corporations and more.
- Templates include the ability for you and the client to add an e-signature which is legally binding.
- Contracts have clear payment terms and the ability to add late payment charges.
- The templates have an “out clause” if the agreement ends early.
- Contracts are connected to invoicing, helping ensure you get paid on time.
For these and other reasons, Bonsai has everything you need for effective freelance contracts, agreements and more.
When to use an agreement template?
You can use an agreement template in basically every situation. Here are a few examples:
- A non-disclosure agreement if you’re exploring work with a client and you both want protection.
- A contract to begin work on a specific project.
- A retainer agreement whereby you will perform specific work for a client on a regular basis, in exchange for regular payment.
You can even have several different types of agreement templates to cover different situations, or the different types of work you do. Your template can be simple or complex, and you should be able to customize it to suit your needs.
As a freelancer, having solid agreement templates and contract templates will save you time while protecting you and your client.
A note on paper vs electronic agreement templates
As a freelancer, you want to show your clients that you’re leading edge, offering them the latest innovations in your field. Whether you’re a designer, a writer or a consultant, a paper agreement template shows the client just the opposite. Paper adds time and money, and it’s bad for the environment. Instead, having legal documents such as agreements and contracts in a digital format makes everyone’s life easier.
Freelancers often work remotely, and sometimes never meet their clients in person. In fact, they often work with clients all over the world. The laws have kept up by allowing for digital business transactions such as e-signatures. So it’s best to use an electronic agreement template, to increase efficiency and make it easier to do business.
Advantages of agreement templates
Once an agreement template is done properly, there are many advantages to having one. Here are a few:
Reduced time and cost
Let’s say you bid on requests for proposals, or tenders for work, on a regular basis. Having an agreement template that’s almost ready to go can save time and allow you to bid quickly and win more jobs. In the long run, that also saves you money because you’re not spending valuable hours creating a new agreement for every new RFP, tender, client or project.
Confidence in the terms
An agreement template that has had a thorough legal review will give you the peace of mind that your business is protected every time you engage with a client. It also makes you familiar with all the terms contained in the agreement template, so you can easily answer any of the client’s questions or concerns. Finally, it provides your client with the reassurance that your contract or agreement is solid.
It projects a professional image of your business
Your clients will appreciate the fact that you run a professional business. Even a one-person freelance company is still a business, so you should use documents such as proposals, contracts and agreements that prove it to your clients.
It provides consistency
An agreement template that describes a process, for instance how a designer would undertake creation of a new logo, means your work description is clear and consistent. That means less room for deviation from the work details, and less scope creep. It also makes for a clear understanding between you and your client.
Disadvantages of agreement templates
By the same token, an agreement template that isn’t done properly can cause issues, either with the first client or first time you use it, or with subsequent clients. Here are a few disadvantages of using agreement templates:
Poor language gets used time and again
If your template has improper language, or legal loopholes, there’s a risk that a legal dispute can be repeated every time you take on a project or work with a client. Each word, phrase or term that can be disputed, or even misunderstood, can cause you repeating issues. If it doesn’t happen immediately, it’s bound to happen eventually, and you could have the same dispute occur repeatedly.
Not having the correct terms
Besides using incorrect or unclear language, if you create your own template, there’s a risk you will leave out important terms and conditions. Examples of those include an “out clause,” in the event the agreement ends early. Another example is forgetting to include late payment terms. It only takes one incident to highlight a glaring error in an agreement template, and by that time, it may be too late.
While an agreement template is designed to help you save time, it needs to be done properly the first time. Otherwise, you could spend time creating a template and having it go through legal review, only to find out with subsequent projects or clients that the terms are too restrictive, or too open-ended, or not adaptable to the different types of work you do. If customization is limited, it restricts what you can do without undergoing another full legal review. You’ll have to make edits and modifications to the agreement template and then put it through another legal review, as well as clearing it with the client, before you can actually use it for a specific job.
Damage to your business
If you keep using a poor agreement template, you could run into issues with multiple clients. Besides the damage to the reputation of your business, there could be non-payment issues that lead to cash flow problems. Your dissatisfied customers could turn into legal adversaries. That’s a risk you don’t want to take, which could hurt your business and cost you money in legal bills.
Take a look at the following examples, which is when agreement templates can cause problems, by being misinterpreted, or even disputed. It’s important to use a high quality agreement template the first time and every time you work with a client.
Why are Bonsai’s automatically generated agreement templates better?
We’ve been through some of the reasons that a Bonsai agreement template is better than trying to create your own, using a generic template, or building an agreement each time you work with a client. Reasons like legal review, e-signature included, ability to customize, and more.
Bonsai’s templates are also part of their integrated freelance system, meaning you can use Bonsai for a number of vital administrative tasks that are important but time-consuming. You can use Bonsai to write effective proposals, which can then be connected to contracts, which are then integrated with invoicing. You can manage an entire project from start to finish, or set up recurring invoices for a retainer agreement.
You can do time tracking, accounting, and document expenses.
So when it comes to creating an agreement template, it’s better to use Bonsai’s automatically generated template system, rather than risk improper wording or even legal disputes. Give yourself and your clients the assurance that your agreements are solid and legally airtight. At the same time, you can take advantage of the many other aspects of the Bonsai integrated freelance system.
How to create agreement templates using Bonsai?
It’s easy to use Bonsai to create agreements, including custom agreement templates that you can use each time you need an agreement, so you don’t need to start from scratch every time.
Create an account
First, set up a Bonsai account. The only information you need to enter is your name and email address.
Click on "create contract"
Once signed into Bonsai, you can jump right into creating an agreement by going to your Dashboard, where there are two options for starting the process. The first is by choosing Create a contract using the button on the right hand side. That takes you directly to the creation process.
Choose agreement type
That takes you right to the first step in creating a contract or agreement template, and in our example, we’re going to select Non-Disclosure Agreement from the drop-down menu under Template Type.
Fill in the project details
For the purposes of our example, we will use a sample client, create a new project, and call it NDA. Then select Create Contract and you’re on the way to building your agreement template.
Start editing the agreement
The Non-Disclosure Agreement is provided for you, with the ability to edit the text. In fact, all the text is editable until you sign it. And there’s an easy e-signing option that is legally binding for you and the client. You also have the option to add your business logo if you want.
Explore more options
Once you’re done editing, you can choose the More Options button for a drop-down menu that allows you to duplicate your work, edit the title, save it as a template, or delete it. You can also download it as a PDF. Finally, you can view the project dashboard where there could be other material related to this specific piece of work.
Sign the agreement
By typing in your name, a signature is generated that’s legally binding once you select Confirm Signature.
Bonsai always gives you the option to get help, with a “Contact Support” button. With Bonsai’s support system, you can:
- choose chat support to ask for help
- access the knowledge base to find the answer yourself
- see a list of the latest changes to Bonsai
- request and vote on features, where you can provide feedback or request the addition of a specific function
Bonsai is so easy to use for those administrative tasks that are vital to your freelance business, and yet time-consuming if you try to do it all yourself. Having the ability to create legally solid agreement templates, contracts, and a fully integrated program that connects to proposals and invoicing, there’s no reason to put off joining the Bonsai community any longer.
Bonsai vs generic agreement templates
You can find generic agreement templates online, and many are free to download and use, or you could create your own agreement template. But there are a few cautions if you choose these routes.
First, you can’t be certain that the online source has been vetted by legal experts. The terms may be flawed and put you in jeopardy. That could be particularly dangerous if you keep using the same flawed contract terms.
It can be time-consuming to make your own agreement template, particularly if you don’t have access to a lawyer, to e-signature technology, and more.
Instead, get your money’s worth when using Bonsai to handle your agreement templates, along with your other administrative duties like proposals and invoicing. You can take your freelancing business to the next level with the integrated Bonsai system, which will connect proposals to contracts to invoicing, and more.
Here’s what you get for spending $19 / month on Bonsai:
Create, customize and send professional agreements quickly
Create agreements for special situations and ones specific to your industry.
All the important and relevant terms are included, like payment terms and an out clause.
You can easily edit terms, client names, payment schedules, business types, dates and locations, and more.
All the Bonsai agreements and contracts have been reviewed by lawyers.
You and the client can agree online with a legally binding signature format - no need for printing and signing or for finding a separate online solution.
Do the work once and save it as a template to use time and again.
Bonsai’s system can create invoices connected to any agreement or contract, which can also be integrated with proposals and other project details. Make your administrative headaches go away.
At Bonsai, we recommend ALL freelancers to protect their time like it’s the most important thing in the world. Otherwise, it’ll consume you.
E-signature for agreement templates
Even for what seems like a simple non-disclosure agreement, it’s imperative that you and the client sign the document to make it official. But what if you work remotely and your client is in another location? While an electronic agreement template saves you time, there’s still the issue of getting it signed to make it a legally binding document.
First, be sure to include a section for signatures on the agreement template. Make it easy to expand to include more than two signatures, in the example of a collaboration agreement.
You could still print and sign the page, then send it to the client by scanning, faxing or even mailing it, and ask the client to sign and send it back. But that’s a hassle, and you can imagine the amount of time it would take in that collaboration agreement example!
There’s a better way to do it, and that’s using an electronic signature or e-signature. That’s when an image of your signature is overlaid on a PDF document, which can be done using several different apps, and on different platforms, depending on the technology you use.
If you’re wondering if an e-signature is legally binding and sufficient for you and your clients, it certainly is, thanks to the “E-Sign” Act (Electronic Signatures In Global And National Commerce Act) of 2000. It provides a “general rule of validity for electronic records and signatures,” making e-signature ideal for the purposes of a freelance agreement or contract.
You’ll have to figure out the best way to accomplish an e-signature, depending on your technology, because there are steps for Windows versus Apple computers, and for iPhones, iPads and Android products.
Then an e-signature can be the final step in completing an agreement with a client, who should be familiar with and use e-signatures. Or, the client can follow the steps of printing and signing the document.
And then there are systems that include an e-signature as part of an agreement template, such as the Bonsai suite of freelance services.
Other agreement template categories
Now you know about agreements and agreement templates, which help make the task easy, convenient and efficient. You can also consider the option of the integrated tools available to you as part of Bonsai’s freelance suite by signing up for a free trial now.