Format of Retainership Contract: Everything You Need to Know
The format of a retainership contract is important, as it should be formatted to ensure full understanding by both parties. 3 min read
The format of a retainership contract is important, as it should be formatted to ensure full understanding by both parties. Specifically, a retainer contract is entered into when a client agrees to pay a freelance professional a fee for ongoing work. Generally, the first payment is made in advance of the work being performed. However, depending on the language in the contract, the client might pay the freelance professional on a weekly, monthly, or bi-weekly basis. Such agreements are common for larger projects, ongoing engagements, or smaller projects that are conducted frequently for the client.
The retainer agreement will also identify what type of work is to be performed, along with deadlines and scope of the work. It will include how and when payment will be made, along with grounds for withdrawal and other information relating to the work being performed.
Advantages of a Retainer Agreement
There are many advantages to entering into a retainer agreement, including the following:
1.It can protect both parties against potential legal disputes
2.It provides a regular and stable source of income for the freelance professional
3.It can enhance the relationship between the client and freelancer
4.Reduces payment issues
5.It will identify deliverables to reduce any uncertainties
6.It will include contingencies for unforeseen circumstances
7.It will help keep accurate tax records
A properly drafted retainer agreement can prevent potential legal disputes. In fact, attorneys entering into retainer agreements with their clients are required to draft a written agreement before providing legal services for a client. Without it, some bar associations won’t let the attorney collect the retainer fee.
The retainer agreement is a good source of income for any freelance professional, particularly if you are engaged in an ongoing retainer agreement with the client. The agreement could last for years if you and the client have a positive relationship with one another and the work is expected to continue for the foreseeable future.
The retainer agreement can enhance the relationship between the client and freelance professional. It can help establish a long-lasting relationship between the parties, as parties are more apt to enter into contracts when there is a written agreement.
The retainer agreement will reduce any issues when it comes to payment. The contract will specifically identify the payment terms, and how/when payment should be made. This is important so that both parties will understand the full payment terms of the retainer contract.
The retainer agreement will also provide information on the scope of the work to be done, thereby reducing any uncertainties on the part of both parties. Essentially, the contract will indicate what type of work is to be done, the complexities of such work, and how it should be completed. This will mitigate the uncertainties; furthermore, if any uncertainties still exist, the parties should communicate as such to one another and ensure that all items are mentioned in the retainer agreement.
In any contract, unforeseen circumstances might arise that would render performance under the contract impossible. Some examples could be unforeseen weather events, such as hurricanes, fires, tornadoes, etc.
It is important to have a written retainer agreement for tax purposes. You can rely on digital invoices and receipts; however, the contract itself is a legally binding agreement. Therefore, if either party breaches the agreement, a breach of contract claim might arise. However, if you and the client fail to provide a written retainer agreement, it’s a he said/he said argument, and the court must determine if the purpose of the parties was really to enter into a retainer agreement.
Entering into a retainer agreement can provide discounts for the client, as the freelancer might provide services at a discounted rate, especially if the client has an ongoing retainer agreement with the freelancer. Additionally, the freelancer might be willing to provide additional work that is not identified in the retainer agreement.
The relationship between the client and freelancer ensures consistency in terms of the services performed by the freelancer. The client can expect services that exceed his/her expectations; the reason for this is because the freelancer might have done work for the client in the past, and might be very familiar with the client’s needs, along with the client’s systems.
If you need help learning more about the format of a retainer contract, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.