How to Figure Out What Contracts You Need in Your Business

You know you need a 1:1 client contract... but is that it? How do you figure out what contracts you actually need? Tune in for my simple system to figure out if you actually need a contract for that.

Key Takeaways

• A contract is just a piece of paper that outlines the rules and boundaries of a relationship in writing so everyone is on the same page about what to expect
• Contracts don't have to be fancy - it can be a formal document signed by both parties on pen and paper, but it can also be a paragraph and checkbox at the bottom of a guest questionnaire or a policy posted on your site
• What contracts you need comes down to two things: your relationships and the value exchanged in the relationship. Is the relationship important to you? Is the value that's changing hands important to you? If yes, you need a contract.

Resources Mentioned

• Download the 9-Step Checklist
• Watch the free masterclass
• Follow Amy on Instagram @artfulcontracts

Next Steps

Thank you so much for listening! If you enjoyed this episode, please reach out and let me know by sending me a DM on Instagram @artfulcontracts

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Episode Transcript

Since you're here, you are probably already convinced that you need a one-on-one client contract. And that is great. That's fantastic. If you already have your one-on-one client contract, you're ahead of so many people. But there are gonna be a lot more contracts that you need in your business than just that. So this episode is about how to figure out what those contracts are and how to start getting them in place.

Hey, I'm Amy Nestheim, licensed attorney for online business owners and founder of my own business, Artful Contracts. You're listening to Legal Made Easy, the show that makes the legal aspects of online business easy to understand and implement so you can grow your business with confidence knowing you've got it all covered. Let's dive in.

The first thing that you need to know is what a contract is, and really it's just a piece of paper that has in writing the rules and boundaries of a relationship so that everyone is on the same page, so that there's no trying to remember what so-and-so promised or searching back through email threads to figure out what was happening, or even just those like unwritten, unspoken assumptions that can always happen in relationships where you have one side who thinks that something means something, means one thing, and the other person thinks it means something else, and you end up with crossed wires, and then everyone's upset.

A contract is designed to avoid all of those things because you just get down in writing everything that both sides expect that is going to happen in the relationship on paper, so you can refer back to it and you both sign it so that you're both saying, Yes, this is what I this is what I think our relationship looks like, and both people then agree that it looks the same way. That's all a contract is.

So if a contract is just defining the rules and boundaries of a relationship, then the simplest way to look at it is that you need a contract for every different relationship that you have in your business. That's how you figure it out at the very basic level.

And in business, we have a lot of those, right? We have our one-on-one clients, which is of course the place that people usually start with contracts with is which is great. But we also have other other relationships in business too. We have people who we invite on our podcast as guests, we have students who purchase our self-paced courses, we have website visitors. We might never interact with that person, but there is a relationship there. They're viewing our content, right? Or somebody who signs up for your email list and downloads your freebie, your affiliates who promote your products for you, a client who's in your group program, which might be different than your one-on-one program.

Maybe you participate in a summit or present in someone else's program. Relationships with other business owners count here too. So what I'm just trying to get at is that there are lots of types of relationships in our business, and we need to have contracts for all of them. Now, I know I'm gonna get a lot of pushback on that because it sounds scary, right? That sounds crazy. Like there's a million types of relationships. Do we really need contracts for all of them? Like, let's say a follower DMs you on Instagram. You're not gonna send over an NDA and say, no, you can't disclose the contents of this conversation. That would be nobody would want to talk to you. No, you wouldn't get any more DMs if you did that, right? So it's not gonna be every relationship ever.

So how do you figure out what those relationships are? Here's the question: Is something of value being exchanged? Is there some value that is going back and forth from one person to the other, and vice versa, that is valuable? Now, your Instagram followers might think that the content that you hand out in the DMs, the questions that they answer, you answer for them, that's valuable to them, right? But they're not giving you anything for that. That's really a that's pretty much a one-way exchange.

So what I'm talking about is is there value being exchanged on both sides? One side is giving, the other side is receiving, and vice versa. It's not always going to be money. There can be other types of value as well. Is there content being exchanged? Is there a promise being exchanged? Here's an example. As a new coach, a lot of coaches and service providers too get the advice of well, get some free clients. Sometimes you need this for a certification, get do some free coaching, get some sessions under your belt for free, uh, and get some testimonials.

So do a beta launch or get some testimonials so that you can sell it later or something like that. So there's no money changing hands, you're just offering coaching and they are giving you a testimonial. That is value on both sides, even though there's no money changing hands, you are giving them coaching, you're giving them your systems, you're giving them insight into your processes and your brain and your coaching ability and all of that. And they are promising a testimonial in exchange for that free coaching. So there's something of values changing hands on both sides. If you want to be able to hold them to that promise of a testimonial, then you need a contract for that.

Now, just a quick note on that: legally, you're not allowed to force them to give you a positive review. Their review has to be honest. So you can you can do an exchange for feedback. You cannot do an exchange for positive feedback, just to clarify on that.

Now, let's do another example. Let's say you have a group coaching program or a course, a big course that has calls, something like that. And you want to have experts come in and do presentations for your clients inside of your group program. The expert comes in and presents a live class to your students, let's say over Zoom, you record it and then you post that recording inside of your group portal so that your students can watch it if they couldn't show up live and your future students get the benefit of that too. You aren't paying the guest, but they get the benefit of being exposed to your students. Maybe your students will hire them at some point, or maybe they just like the value of practicing their presentations in front of new students if they are new. So there is some value to them, right? Even if you're not paying them.

Now let's say later on, a few months go by and you decide to offer a new self-paced course and you loved this guest presentation and you have the recording inside of your group coaching program. So you decide to offer the recording of that guest presentation as a bonus inside of your new self-paced course and you use it in your marketing. Are you actually allowed to do that? If the expert notices that you're doing that, can they stop you? Do you have permission to do that? These are the kinds of things that a guest presentation release or guest contract would cover because there is value being exchanged when they do the presentation for your group. You have the recording. You need a contract to put rules around that exchange.

And you might think, well, I have the recording, so I can do whatever I want with it, but the presenter is the one who owns that material. They own that content because they created it and they presented it to you. And they might have had the assumption or belief that you were only going to use it inside of this one program that you invited them to present in and that they weren't giving you permission to use this recording however you wanted.

I mean, let's take it another step further. Let's say that you're not just putting it inside of your paid content. What if you're just posting it on your social media and saying, look, this is the type of guest who my students get access to? Then this person's content is just out there for free. Is that really what they signed up for when they presented inside of your closed paid program? And you know what? If you do that and then they notice it and they come back to you, that guest can then say, Nope, I want you to take all of my content down. I don't want you to have access to it anymore because you took advantage of my generosity giving you this content. So you have to take it all down.

And if you don't have a contract that says that you have the right to have that in your program, then they can do that. They have control over their own content, even though they presented it to you. If there's nothing in writing, they can come back and do that. And that's true, even if you even if you didn't put it somewhere where it didn't belong, even if you kept it only the way that you said you were gonna do it, kept it inside of your paid group program, they can still come back and say, you know what, I've changed business models. I'm not comfortable with having this type of content out there anymore because I don't teach it anymore. Please take it down.

And again, if you don't have anything in writing that says that you have either ownership of that presentation or a license to use that presentation, then you have to take it down because you don't own it.

Let's do one more example. Let's say you have for your lead magnet, you have available a free download of a bundle of templates. There's no money being exchanged because somebody can just hop on your site, put in their email address, they get these templates. The value that's being exchanged is you get their email address, you get the right to send them marketing messages in the future, and they get this free bundle of templates. There's value being exchanged, even though it's not money. If you don't have a contract in place, and in this case, if they're going to your website downloading a free thing, this would be, you know, a couple paragraphs inside of your website terms and conditions about free content. That's the contract in this case.

So contracts don't just have to be something that, you know, you hand over and somebody signs, puts an electronic signature on it. It might be a checkbox or terms posted on your site, right? So for a freebie, it's gonna be a couple paragraphs inside of your terms and conditions for your website. And that's gonna make it clear what this person is allowed to do with the content that they downloaded from your site.

So if it's templates and you don't have any terms, there's nothing stopping them from going and selling those, going and tweaking them a little bit, selling them as their own, or offering it as their own freebie on their site, right? If you don't put rules around what they're allowed to do with that, then they just have it and they can do whatever they want. Yes, just by creating it, you do own the copyright in it, in that bundle of templates, but by handing it over without any rules around it, it's not clear exactly what you're handing over. So it could be that you're giving them ownership of it. It could be that you're just letting them use it however they want. But if you want to put limitations on how they can use it, whether they can use it with clients, whether it's just inside of their business, then that's what the contract is for.

So what I'm trying to get at here is that whenever there is value being exchanged, when you're giving something of value or receiving something of value, it is important to have a contract because it puts rules around that exchange of value. And it does so in writing in a way that everyone can look back at and refer to later to figure out what are the boundaries around what I'm allowed to do with this, how can I use it, who actually owns it, that type of thing.

All right, so let's pull it back a little bit. What does all that mean for your business? What do you actually have to do? So if contracts define the rules of relationship and put boundaries around the exchange of value, then what we need to do is identify the relationships and identify the value being exchanged.

So step number one, make a list of all the different types of relationships that you have in your business. These are all the relationships you will probably need contracts for. And then you look at those relationships and you figure out what is the value that's changing hands and is it important to you? Is it important enough that you want to have a contract around it? And again, a contract doesn't necessarily mean something that it's all written up with their name on it and you send it over and they have to sign it. It might be a checkbox, a paragraph with a checkbox. It might be terms posted on your site, it might be something that shows up at checkout. It could be a paragraph that is embedded in a submission form.

Like for a podcast guest, for example, you might have a guest form, and at the bottom there is a little paragraph that's a podcast guest release that says what you're allowed to do with the content that they give to you. It doesn't have to be super complicated.

So identify all the relationships you have, figure out what value is changing hands, and decide if that value is such that you want to protect it and create terms around it, and create rules for how the other person can use it or how you can use it if you're receiving the value, like with that guest example. And there's your list of contracts, or at a minimum, a list of things that you need to put rules in writing around, which we know that's just what a contract is, right?

Now, one more thing I want to add on here. You might need to have multiple different types of contracts with the same person because someone can go through a journey with you in your business. The same person might download your freebie and then sign up for your self-paced course and then become a one-on-one client. And so the contracts you have with them at any given time is going to depend on the value that's being exchanged during that phase of the relationship.

And you might even, let's say they book your small one-on-one service, maybe your VIP day service, and then later they go on and have you, you have them as a retainer client. That's different value being exchanged. So those contracts are gonna be different, and you need to have different contracts for each type of relationship and depending on the value that's changing hands.

So this is not about the individual person necessarily because the relationship and the value with each individual person is gonna change over time. And so you might need different contracts with them. You might need multiple contracts with them at any one time, because what matters is not the relationship with the individual, but the relationship in terms of what value is being exchanged.

All right, here's your list of contracts. List out all the types of relationships you have: your website visitor, your freebie seekers, your podcast guests, your one-on-one clients, your group program clients, your self-paced course students, people who purchase from your digital product shop, guests inside your programs, your participation in other people's programs, all of that. And then identify what of what of those are important to you that are protected, what kind of value is changing hands that you want to make sure that there are rules and clear expectations around. And that creates your list of contracts. And this is going to be an iterative process. It's going to change over time because the relationships you have in business are gonna change over time.

So anytime you create a new offer, anytime you are creating new value that you're giving to someone or receiving new value from someone else, you're gonna have to think about this. Do I need a contract for that? Do I value this exchange such that I want it to be clear what the rules are around it? If there's money changing hands, it should always have a contract. If there's content changing hands that you want to make sure that you can use or that you can control how someone else uses it, you should have a contract.

All right, that's it for this episode. If you're enjoying the content of the podcast, I would love if you would please leave us a review on Apple Podcasts. It's so helpful as we just get started. And if you haven't already, go check out episodes two, three, and four.

There is a really helpful series on the nine steps to get your business started legally. And we have a free checklist that goes along with that that you can download so you don't have to take notes, but you can get the content in two formats. You can listen to it on the podcast and then have it in writing so you can actually walk through it all. Thanks so much for listening, and I'll see you next week.