"Christina, I was recommending your contracts to a friend this week and they asked me how the templates comply with various state laws. Apparently here in --------, independent contractor laws are complicated (per my friend, who is not a lawyer but was consulting with one). I didn't know the answer."
True story, this email ends up in my inbox every few months, and it's about time I got around to answering it here on the blog.
Can you use a contract template in your state?
This is going to sound like weak sauce for a sec but hear me out!
Having something (and a very well-drafted, peer-reviewed, used-by-many something at that) is better than nothing.
Getting your contract template reviewed by an attorney in your area is a good idea, but starting with one of our templates will save you a ton of money because if you didn’t notice, attorneys are expensive. And they don’t usually care whether you get a hot meal at a wedding.
They probably also don't understand that your calligraphy clients NEVER approve their proofs on time or that the mother-of-the-bride will blame YOU if the U.S. Postal Service destroys her only daughter's custom-designed wedding invitations.
Now, for the Long Answer:
As far as state specific laws go — the templates aren’t perfect but they get you about 95% of the way there. That being said, they’re beneficial in three ways:
1. At least 95% of our templates apply to you.
Pretend like we’re in a relay race—our templates here at The Contract Shop® have run 9/10ths of the race for you, and it’s up to you to finish out that last tenth of a mile.
If you poop out now and kinda jog to the finish, you still win because you finished the race. If you sprint ahead with one last lawyerly review in your jurisdiction, you win, just ahead of the competitors.
The alternative to our templates is.... scary.
You either don’t have a contract at all, or you can get something for free or very cheap on the internet or at “big-box” template sites, but these Frankencontracts you piece together from various sites that don’t take into account your unique business needs. Or you spent waaaay more money than you needed to hiring a few lawyers who have no idea what an "online course" even is…
For example, if you’re a wedding photographer, one of the biggest questions you’re going to get from couples is “how can I use my images once they’re delivered to me?”
(Either that or your clients are just going to start doing all kinds of wacky shit with your photos. Like putting ugly ass filters on them. Or screenshotting them and using their crappy resolution screenshot as their profile photo.)
A contract is there to lay down the law and tell them exactly what they can or can’t do, but unless you’re a photographer (been there) and have experienced this first hand (done that) there’s no way a regular lawyer or big box site is going to know they should include this.
2. The truth is that your business just isn’t that unique at its core structure.
At the end of the day, you provide a service. Clients need that service. Now, what you do and how you provide that (and how well you provide that) is indeed unique—I’m not discounting that.
However, I have yet to see state laws that are significantly different from state to state. Where language is important, these state-specific statutes have been included with our templates. For example, the equine photography contract template comes with state-specific equine statutory language since the exact wording varies by state.
As far as the reader’s question, however, IRS regulations around independent contractor classifications don’t differ very much from the states I’ve seen. My guess is that the reader’s friend/her attorney have experienced what we all do at some point—classifying an independent contractor vs. an employee is a gray area and frankly can be a pain in the ass.
I don’t think there’s anything tricky in the contract or regulations of states per se, but I do think most business owners have a hard time distinguishing when someone becomes an employee because it’s so unclear.
3. It’s better to start with a template and let your attorney add or tweak.
Consider this, in my law firm, which is a separate company from The Contract Shop®, fully custom agreements typically run a purchaser anywhere from $2,500-$3,500 even with our modest (for a law firm) hourly rate of $250/hour.
Tweaking and revising one of our templates costs the client much less—somewhere around $500.
Since the templates are pretty complete, they save purchasers hundreds of dollars should that purchaser choose to get it reviewed by an attorney. As you might imagine, to make these templates absolutely perfect for every state/province at any given moment is impossible—laws change, industries change, and technically there are federal, state, city, township and licensing rules to comply with.
Rather than spend 80 million hours making the perfect template for your profession in your zip code, I ask myself this question when I create any template:
What is the most important outcome for both the service provider and client?
To me, the most important thing to preserve within any contract template is the client experience. Therefore, when I draft or revise these templates, my main concern is how the terms benefit both you as the service provider (since you all have stolen my heart) and how you can provide the best experience possible to these clients.
Client experience starts with their contract, and ends with a referral + a five star review on Google in my opinion.
Do you know the 3 legal terms you should know as a creative business owner? Click here to find out.
Think it's time to double-check your contract? Me, too. And, I actually suggest doing this once or twice a year because your business changes as you change your services and products. Get the Client Contract Checklist to dot your i's and cross your t's.
Did you end up here because you want to DIY your contract? You should also take a look at these reasons why you should consider becoming an LLC.