How the Right Agreement Protects Your Business

When running a design business, your skills and creativity are only part of the equation. One of the most powerful tools you can have in your arsenal is a solid design agreement. More than just a contract, the right agreement sets clear expectations, protects your time and profits, and helps you avoid costly misunderstandings.It’s your perfect design agreement.

In this post, we’ll explore some of the essential clauses that will not only protect your business but also ensure you are fairly compensated for the value you bring to each project.

Episode Timestamps

• (0:14) Introduction to the importance of a detailed design agreement.
• (5:22) Why you should always include an expiration date.
• (10:12) The importance of defining the project scope clearly.
• (16:00) How to protect your time with a procurement clause.
• (35:03) Why change orders are crucial for avoiding unpaid work.

Why Your Design Agreement Matters

Think of your agreement as a safety net—it keeps everything running smoothly, defines your boundaries, and clarifies the client’s responsibilities. Without an agreement that’s comprehensive and detailed, you risk misunderstandings, scope creep, and even unpaid work. Your perfect design agreement solves these problems. 

Now let’s get into the key clauses you should be including in your agreement.

Must-Have Clauses for Your Perfect Design Agreement

1. Expiration Date

Make sure your perfect design agreement includes an expiration date—typically 7-14 days—so clients make timely decisions. This prevents projects from getting stuck in limbo and gives you leverage to follow up if needed.

2. Scope of Work

Clearly define the project scope, including a room-by-room breakdown of what’s included. Use active verbs like “install,” “design,” and “layer” to convey authority. This helps ensure that there are no surprises about what the project includes.

3. Timeline & Milestones

It’s crucial to give clients an estimated timeline for project completion. Include milestones (e.g., “Phase 1: Space Planning – Week 2”) and build in buffer time to account for unexpected delays caused by contractors or suppliers.

4. Service Fees

Whether you charge by hourly rate, flat fee, or percentage of project cost, make sure your pricing structure is clear in your perfect design agreement. Include any additional fees, such as for extra revisions or changes that go beyond the agreed scope.

5. Payment Terms & Schedule

Detail your payment schedule and specify when each payment is due in your perfect design agreement. Whether you require an upfront deposit, progress payments, or final payment upon completion, make sure it’s outlined. Also, mention acceptable payment methods (such as ACH or bank transfer) to avoid credit card disputes.

6. Procurement Fees

For designers who handle procurement, your agreement should cover everything from generating purchase orders to managing deliveries. This is a time-consuming process, so list it as a separate service with its own fee.

7. Change Orders

This is non-negotiable. Any change to the original scope must go through a change order process, where the client submits and approves changes in writing—and pays for them—before any additional work is done.

8. Communication Protocols

Set boundaries around how and when clients can contact you. Include guidelines for email, text, and phone calls, and set specific times for responding (e.g., 9–10 a.m. and 4–5 p.m.). This protects your creative time and ensures clients aren’t constantly interrupting your workflow.

9. Product Pricing & Markups

If you’re purchasing items for a client, outline your markup policy in your perfect design agreement (e.g., “Designer net plus 25–60%”) and clarify that this is for the expertise and management of the procurement process. Be transparent but firm in protecting your profit margin.

10. Termination & Exit Clauses

Things don’t always go as planned. Include a termination clause that allows either party to end the agreement, along with any fees or penalties for doing so. This clause provides an escape route if the relationship becomes unworkable.

11. Reimbursables

If you expect to incur additional costs (such as for travel, shipping, or materials), list these under reimbursables. Make sure to outline what qualifies and when clients can expect to be billed for these extras.

12. Intellectual Property

You’ve spent years honing your design skills. Protect your intellectual property by specifying that any designs, drawings, or plans you create remain your property until full payment is made. This prevents clients from using your ideas without compensation.

13. Photography & Portfolio Rights

For designers, photos of finished projects are essential for marketing. Include a clause that grants you permission to photograph and showcase the project in your portfolio, on your website, and in marketing materials.Your perfect design agreement acts as a marketing document as well as protecting your profit and practice. 

14. Cancellation Penalties

Clients who cancel meetings or installations at the last minute can disrupt your entire workflow. Add a cancellation protocol for non-emergency cancellations made within 24 hours of an appointment.

15. Hidden Issues & Contingency

For remodels or new builds, there’s always the chance that hidden issues will arise, leading to additional costs. Advise clients to set aside a contingency fund of 15–20% for unforeseen circumstances.

16. Dispute Resolution

To avoid costly litigation, include a dispute resolution clause that requires any disagreements to go through arbitration before escalating to a lawsuit. This can save both you and the client time and money if issues arise.

17. Force Majeure

Include a force majeure clause to protect your business from events beyond your control, such as natural disasters, pandemics, or other disruptions that could delay project completion.

18. Completion Celebration

This is an effective way to capture quality referrals. Offer to host a  completion celebration where the client is the guest of honor in their home, and they provide a guest list for you to invite. You are there to  showcase the finished project. It’s a great way to turn clients into ambassadors for your business and generate referrals.

Key Takeaways

By ensuring that your perfect design agreement includes these key clauses, you not only protect your business but also create a more professional experience for your clients. They’ll appreciate the clarity, and you’ll enjoy the peace of mind that comes from knowing every base is covered.

A well-written agreement does more than shield you from potential problems—it sets the tone for a successful partnership with your clients.

When you’re ready to increase your interior design practice profits, work exclusively with ideal clients, and enjoy the time and resources for your extraordinary life, explore your coaching options. We’ve got your back in the business of interior design.