Don't Risk IT

Contracts to Start Your New Client Relationship off Right

Monday, March 24, 2014/Categories: hiring-and-human-resources

Congratulations! You’ve won the business with a new IT client and are ready to get to work. To start this new business relationship with clear expectations, it’s time to define your scope of work, set your payment and pricing terms to ensure you get paid fairly, and protect your business from any potential liability. You can accomplish all three with the right legal agreements.

The No. 1 IT contract for many consulting engagements is the consulting services agreement, a comprehensive legal document designed to govern the relationship between a consultant and a client. This type of technology agreement lets you detail, in writing, exactly what deliverables you will provide for your new client, at what cost, and in what timeframe, reducing the possibility of any future misunderstanding about what you were and weren’t supposed to do.

This part of the client agreement is sometimes called a “scope of work” or “statement of work,” and it lets you set your rights and responsibilities during the duration of your project. If your client wishes to expand the scope of work later, you can negotiate your price for those additional services at that time.

A consulting services contract also legally establishes your pricing and terms for getting paid, outlines how you’ll be reimbursed for expenses, protects your intellectual property and confidentiality rights, and limits any liability related to your work.

Deploying Your Employees

If you’re going to provide employees to your new client on an independent contractor basis, there are additional legal considerations to keep in mind. While a consulting services agreement can prohibit your client from hiring away key personnel, many IT businesses go a step further and also ask their clients to sign a staffing and placement agreement that establishes the relationship of their personnel with the client as independent contractors.

This type of client agreement typically includes a provision to prohibit your client from stealing your employees, and also defines who your employees will work for and where. Plus, it limits both the timeframe in which clients can seek remedies for alleged deficiencies in your employees’ work and the dollar amount of that liability.

Other IT Contracts You May Need

Depending on the type of work you’ll be doing, other technology agreements may come in handy as well. For example, if you’re developing, customizing or maintaining custom software for a client, you may wish to protect your intellectual property rights and other interests with a custom software development agreement, software customization agreement and/or a custom software maintenance and support agreement. A software copyright assignment agreement also lets you legally transfer your software copyright and can relieve you from the responsibility of providing ongoing training or instruction for the software you’ve created.

If you’re acting as an application service provider, an ASP agreement will allow you to set limitations on your client’s use of your software and application server. If you’re working on a client’s network, a network installation and maintenance agreement lets you set your price and payment terms, and specify what the client must do to ensure you can get the job done. You can also include disclaimers that state you do not warranty the stability of the network and are not responsible for any losses should the network fail. And if you’re a web developer or provide hosting services, separate website development agreements and website hosting agreements can limit your liability and help ensure you get paid appropriately.

For any type of business interaction, especially a new client relationship, a mutual non-disclosure agreement is a good way to ensure that all parties keep sensitive information confidential.

To view samples of ready-to-customize contract templates designed just for IT businesses, visit

Writtten by  - check her out at or Twitter

The Small Business
Insurance Leader
800.688.1984 | 8 am - 5:30 pm CST | M-F
Customer Rating 4.9 out of 5
Read Customer Reviews


The Small Business Insurance Leader