I know I’ve mentioned this in a variety of content, but when I started freelancing my contracts didn’t just SUCK, they were NON-EXISTENT! I would literally just give my client a single page PDF with a list of “things” I would do for them next to a price. It was more reminiscent of a Walmart receipt than it was a contract for work.
Well, it didn’t take long for me to get into some bad deals with that approach. No scope detail. No terms. So much room for “assumptions” and no way to get out of the project if things went south with the client.
Eventually, things went south and I found myself losing money in a contentious client relationship with a project that had no end in sight. That was enough contract pain for me and I began my quest to create the most bulletproof contracts in the history of the creative industry. Among the many clauses I put in my contracts was an emergency exit from a project in the form of a cancellation clause.
A cancellation clause empowers one or both parties to terminate a contract before all of the work detailed in the contract is complete. And believe me, if you ever find yourself in a miserable client relationship or a massively upside down project, this clause is your saving grace.
In my “greatest contracts in the world” quest, I hired an attorney to create the standard terms for our client agreements and project contracts. Here is the “cancellation clause” our attorney provided us and we successfully used for many years at my agency.
Your New Cancellation Clause
CANCELLATION: Either party may terminate this assignment by providing not less than five (5) days written notice to the other party. In the event of cancellation of this assignment, ownership of all copyrights and the original artwork shall be transferred to Client for any work completed up to the date of cancellation. Client shall pay for all work and expenses based on the contract price and expenses already incurred up to the date of cancellation.
In layman’s terms, here is what the clause means.
- Either you or your client can terminate the project before it is fully complete.
- The cancelling party must give five days notice.
- The notice must be in writing.
- The client will be required to pay for all work up to the date of cancellation.
- After the client has made payment, you will give the client the work they have paid for and transfer ownership rights to the client.
Simple. Straightforward. Clear. The only sticky point here, for some of you, might be the ownership rights. If you license artwork etc. to your clients you may need a different clause than this one (but I’m not going to address that in this lesson).
Next, let’s look how this clause works in the real world.
How to Use the Cancellation Clause
- First things first, put the clause in your contract and make sure your client signs the contract!
- The next time a project becomes miserable, decide to execute the cancellation clause.
- Send this email to your client. (If you cancel the project in person, be sure to send a follow up email. send it in an email so you have it in writing), “Clearly this project is not working out for either of us. We have decided to terminate the project in accordance with the cancellation clause in our contract. As per the agreement, five days from now, our contract will be terminated. However, we will discontinue work immediately so as not to incur further costs. During the next five days, we will send you a final invoice for the work completed up to the time of this email. After we receive final payment, we will deliver all project files to you as they now stand and copyright ownership will transfer to your business. We wish you success as you move forward with another designer. Thank you.”
- Within the next five day window you will invoice the client, collect the money, deliver the files, and then move on with your life.
Life is too short for miserable clients. Your time is too valuable to muddle through an awful project experience. Some projects need to be cancelled! Some clients need to be fired!
