Interior Design Contracts: Everything You Need to Know
Utilizing interior design contracts is an effective way to grow your interior design business and protect you from disputes and potential lawsuits. 3 min read
2. How Interior Designs Charge for Their Work
3. Common Elements Clients Ask for in Contracts
Utilizing interior design contracts is an effective way to grow your interior design business and protect you from disputes and potential lawsuits. Learn important terms and how to write your own interior design contract.
How to Write Interior Design Contracts
Contracts need to spell out the details of services to be rendered, payment instructions, and how disputes and liability issues are to be handled. Some factors to keep in mind when drafting your contracts:
- Keep agreements simple. If you're a boutique interior design agency, skip the formal language like “hereto.”
- Detail what services you're providing and include due dates.
- Make sure everything is clearly spelled out so it reduces the risk of disputes. Be sure to include the spaces on which you are contracted to work.
- Detailing the scope of work is vital, especially if you aren't charging by the hour or the client intends to cap how many hours you're working.
- Spell out your design fees in great detail so there is no ambiguity. Most disputes center around design fees, so the more detailed you can be, the better protected you are.
- Discuss purchasing and procurement fees. Do you apply different mark-ups? All that should be detailed.
- What is your policy regarding cancellations and refunds?
- Consider adding cuttings for approval, or CFAs, which will allow your clients to sign proposals before you purchase.
- Include a “no price guarantee.” This protects you when clients take too long to sign a proposal and prices go up.
- Discuss what expenses are reimbursable.
- Spell out how and when you expect your client to pay. Include language about what happens in the event of non-payment.
- Include a section about drawings and how they are utilized.
- Research laws in your region about working as a contractor and/or consultant. Some states forbid designers to also act as contractors. Simple things like hiring an electrician can get you in trouble. This is why it's wise to consult with an attorney to clarify the local law.
- Ensure you discuss the process of obtaining proper permits.
- All parties need to obtain insurance.
- Discuss how photos and publicity are to be handled so you and the client are on the same page about you photographing their private space.
- Don't forget to include signatures.
- Include a section that answers all common questions and important information.
- Discuss termination options should the client need to get out of the contract.
- Include a clause that discusses limitations of liability — something to discuss with an attorney.
- Address dispute resolution options. Talk with local counsel who can advise what is right for your situation.
- Make sure additional contract terms are covered, such as revisions, hourly fee for employees, job site safety, site access and limitation, contract expiration, etc.
- Discuss intellectual property and ownership. The assumption is the designer will retain all rights and ownership, but make sure your work product is protected in the contract.
- Ensure your contract outlines everything related to what services are provided, the frequency and duration of meetings, etc. One suggestion is to break the project down in phases to make it easier to cover all the details.
- Prepare for “what ifs.” What is the procedure if the project runs longer, the budget changes, or the client wants to alter the program?
- Leverage terms, or enforcement terms, are included in a contract to keep everyone motivated and the project moving forward. These terms can be positive or negative. An example of negative enforcement is a stop work order.
How Interior Designs Charge for Their Work
There are several methods for how designers get paid for their work. The most common ones are as follows:
- Flat or Fixed Fee — a single fee based on entire cost/hours of project
- Square Feet — typical for large projects
- Hourly — designer sets hourly rate for piece work
- Cost-Plus — charge for materials, with an uplift for administrative fees and profit
Common Elements Clients Ask for in Contracts
Be on the lookout for elements clients want to be added in all contracts:
- Clients who use designers regularly typically have their own contracts they use. These are often one-sided, which is why you should have an attorney review it.
- Clients may include LEED certifications requirements because sustainability is an important buzzword right now.
- Some clients include “design-build” contracts, where contractors and designers work together under a single contract.
If you need help with interior design contracts, you can post your legal need on UpCounsel's marketplace. UpCounsel only accepts 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.