How to Prepare an Interior Design Contract?
Before starting your daily activities in interior designing it is important to cushion yourself from uncertainties. We do not live in a perfect world and sometimes it’s scary to trust people with your expertise and skills in exchange for a few bucks. In this article, I have got you covered on all that is essential in an interior design contract. However, I am not a lawyer, I am an interior designer and knowledgeable on legal documents. So, what is required in a legal interior design contract?
The contract is a formal agreement between you and your clients. So, providing a detailed scope of work, pricing, payment terms, mark-ups, and insurance policy is necessary. A good interior design contract will shield you from misunderstandings and chaos. Provided that both parties have signed the legal contract, all should be well. It is wise to have your lawyer review the document just to confirm that the essentials are covered.
See also – Interior Design Questionnaire
Image Credit: altaisystems.com
Steps in Preparing the Interior Design Contract
1. Include your name or business name, address, telephone number, and license number if it is available.
2. List all the works to be done or rater the scope of work. Let it be as detailed as possible. For example, how much do interior designers charge? Is it a fixed fee or hourly payments? Mention everything that you charge. Remember to state that you do not charge services like plumbing, ventilation, or electrical services.
3. As an interior designer, state clearly your design fees. Write how you will charge your clients whether it is by hourly fees or fixed fees. Include your going rate, if it is hourly indicate that every time spent on the site will be considered as part of design fees. The additional terms may include answering client’s calls and emails, purchasing items, researching, modifying plans and drawings. If it is a fixed rate indicate that payments will be made in increments and paid after receiving the invoices. State the duration for the reimbursable invoices.
4. It should be clearly written that you will not purchase items until a deposit is paid. The interior design contract should be flexible and clearly laid out that the client will pay the vendor for purchases if they choose to do so.
5. Clearly state that once furnishings and decors are purchased, they are non-refundable especially if they are custom made. It should be clear that you will not reimburse the client when there is no refund from the vendor or for order cancellation.
6. Clearly state that you are not responsible for the services offered by contractors or consultants. So, you are not eligible to offer the client any warranty pertaining to the contractors or consultants. State that the client should sign a separate agreement with the contractor. The only aspect that you can assist the client as an interior designer, is on checking on the work being done to ascertain that the designs are properly laid. This should also be noted down.
7. Indicate a clause that states that the client will reimburse you for any out-of-pocket expenses such as postage, storage, and travel costs.
8. State the time frame and the terms of payments. For example, you can state that you will be invoicing your clients after 10 days and they can pay within 20 days and fail to that, no work will continue with your interior design services or you can include hourly rate fees for late fee payments.
9. A clause on insurance coverage should be included. The client is expected to have insurance coverage for all furnishings and materials to cover during handling, movements, and installation.
10. Ensure that the client agrees you take photos of their homes before and after the interior design works. Approval should be by the client’s signature. A clause indicating that the photos can be used for your interior design business purposes like building your portfolio on your design projects should be included. However, the location, address of the client’s house, and the client’s name should not be disclosed unless they agree to it.
11. A clause indicating that does not guarantee the prices of goods or other services if the client is hiring contractors should be included. The goods prices change with time and can be beyond your control. It is, therefore, wise to safeguard yourself.
12. Specifications of all works must be included as they appear on the plan and 3D drawings. The specifications can include color schemes, fabric choice, proposed lightings, furniture, furnishings, and other interior design construction works.
13. Detailed blueprints have to be attached to the interior design contract. The blueprints have to specify that they are conceptual and that the client cannot use it for any other purpose. The design’s purpose must also be specified and conditions of how they can and cannot be used have to be clearly laid out.
14. In this COVID-19 pandemic period it is important to have a clause indicating your requirements for proper safety and health measures. Make sure that you are transparent on that.
15. A clause indicating that the client can terminate the contract at any time should be included. However, it should be clearly stated that the client will be responsible for all the outstanding fees and charges.
Additional Steps in Creating an Interior Design Contract
1. State the processes involved in the project’s phases. Design phases such as pre-design, design development, contract drawings, construction supervision, project close-out, and any other depending on the complexity of the work. Remember to include all the services that are performed in each stage of the project in detail. You should also include the expected periods of completion for each stage and the fee structure. There should also be discussions with the client after completion in each stage whereby you will present the deliverables to the client, state the needed period of approval, or request for changes by the client.
2. Be clear on which party will own the intellectual property including the copyright of the drawings. Copyright ownership usually goes to the designer or the design firm as they are the creators of the works. The other parties such as the client will require a license to use the drawings. However, there should be limitations on the licenses regarding to how the drawings will be used. If building information modeling technology will be used(BIM), including the BIM protocol section that clarifies if the client or contractors acting on behalf of the client will be allowed to use it. If they will be allowed to use and you have never crafted one, have a consultant to help you out.
3. In your terms of the interior design contract, you should have your lawyer confirm your choice of law, arbitration, termination, modification, integration, and nonpayment. Remember that this is dependent on the laws of your jurisdiction, a good lawyer should be able to draft all that is needed.
See also – Types of Commercial Leases
Importance of Legal Interior Design Contracts
Both parties (the designer and the client) need the legal agreement that binds them. As a design professional, you will require the agreement to run the project smoothly to completion. While the client will require it to know all the details in regards to what they should expect, managed, the terms, conditions, and the whole design concept.
Force majeure which relates to exceptional unforeseen events or circumstances that are beyond reasonable control and they affect the performance of the project. You should include them in the interior design contract to be safe. The events that can constitute to classification as force majeure include unforeseen changes in legislation, wars, and hostilities such as terrorism, exceptional adverse weather conditions, natural catastrophes like earthquakes, volcanoes, and floods, civil unrests such as riots and revolutions, strikes other than by contractors or sub-contractors and epidemics or pandemics. However, force majeure will only be applicable if a designer states it in the contract and does not continue working during the period of the occurrence. It allows a designer to claim for an extension of the working period.
Issues may arise where the client believes that the designer is claiming force majeure for commercial gains and the situations could have been avoided or mitigated. There are common disputed claims on adverse weather conditions because the terms are not well defined. In situations where contractual obligation becomes difficult to perform, it can be classified as a frustrating event. In a frustrating event, the contract can be terminated and no party will be considered to have breached the contract.
Indemnity clauses allocate claims for risks or damage between parties of the contract. They are primary obligations even when the contract is set aside. You may include clauses to indemnify the client against losses, claims, or personal injury if it arises from the interior design works. As a design professional, you will also need to indemnify the client against breaching the contract through the lack of paying the statutory fees. You will also need to indemnify for claims of breach of professional duty. It is a requirement for all professional designers to hold professional indemnity insurance to cover liabilities.
However, consequences that may arise from an indemnity clause are dependent on the wordings of the clause. Examples of such clauses can be, a clause that requires indemnity only for losses that are caused by the indemnifying party and they exclude negligence or it covers for losses regardless of how they were caused.
Most professional indemnity insurances do not rely on allocating blames to the indemnifier. Therefore, to accurately determine the extent of the losses caused, the indemnity clauses need to be precise yet detailed due to complex laws. The parties are thus, required to read carefully and understand the indemnity clauses before signing the interior design contracts.
During remediation, there is a defects liability period which begins immediately from the certification of practical completion and may last in a period of half or a full year. The client is supposed to report any defects that may arise to the contract administrator who checks and determines if they are defects or only maintenance issues. When it is confirmed that they are defects, the general contractor is given the notice to make corrections within a specified period.
Among the contractors’ roles are to identify and correct the defects. However, if a client reports a defect to the contractor, it is their mandate to make it clear that it is not comprehensive to be termed as a defect. The contract administrator will then prepare a certificate of correcting defects after all the items in the schedule of defects have been rectified. It will assist in releasing any retention and will result in the issue of the final certificate.
Remember that the defect liability period is not a time to correct defects presented at practical completion. It is a period where the contractor may be recalled to make corrections if they are found. If there are defects before practical completion, they should be corrected before the issue of a certificate of practical completion is done.
It can however put the contract administrator in a compromising position as both the client and the contractor may prompt the certificate to be issued in order to handover the building with defects. This may in turn affect the contract administrator when it comes to calculating liquidated damages.
If the contract administrator is pressured to certify practical completion yet the works are incomplete, they might inform the client in writing the potential problems of doing so and obtaining written consent from the client to certify practical completion. The contract administrator should also obtain an agreement from the contractor and subcontractors stating that they will complete the works and rectify any defects. However, if the contract administrator is not comfortable with the idea, they can write a disclaimer and advise the client to seek legal advice or to take legal action.
See also – Best Interior Design Software
How Creations can be Used in Marketing?
1. Create a niche as it will enable you to focus on what you are good at such as creating family-friendly interiors or creating designs for home offices.
2. Optimize your Facebook business page and other social media pages. Get a Facebook banner design, updating everything and frequently on your about us page. Then create an attractive business description and update it once in a while, including photos, videos, and reviews. Remember to update photos of your work to build on your portfolio, and also upload videos on how to if you have created them.
3. Set up a WordPress website with a blog. It is valuable to update your website by yourself and there are more youtube tutorials to guide you when you are stuck. It comes with in-built blogs by default that is editable saving you the pressure of creating one and also you are able to get rankings on google much faster with word press.
4. Develop a functional email by picking the right domain that will make your business more legitimate to your prospectus. They will pay more attention and accord you the seriousness that your business deserves.