Jaime Bell is the founder of the Contracts Market where she provides legal contract templates for Canadian entrepreneurs.
In addition to Contracts Market, Jaime runs her own law firm, Wild Coast Law, where she provides legal services to businesses in British Columbia.
In this episode, Jaime and Mohammed talk about how Canadian freelancers can better protect themselves with legal contracts.
Short on time? Skip to the parts you're most interested in.
[01:59] Getting started as a lawyer
[04:37] Launching a legal contract business
[06:38] Common legal mistakes freelancers make
[11:42] Components of a legal contract
[15:25] What to look for when buying a contract template
[17:54] What to look for in a contract sent by the client
[22:26] How to enforce a contract
[24:46] Protecting yourself from a change in scope
[27:59] When you don't need a contract
[30:34] Jaime's advice for Canadian freelancers
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Mohammed: Let’s get started. What is it that you do?
Jaime: So, my name is Jaime and I’m a lawyer and founder of Contracts Market.
Mohammed: And what is [the] Contracts Market?
Jaime: Contracts Market is an e-commerce store that provides legal contract templates that are instantly downloadable for Canadian entrepreneurs specifically, entrepreneurs that are in the online space like freelancers that provide web design, graphic design, photographers, copywriters, VAs, that kind of area.
Mohammed: And in terms of your law practice, what is it that you do there?
Jaime: For my law practice, which is Wild Coast Law, I help entrepreneurs here in my home province of British Columbia navigate the legal side of their businesses. So, that’s, yeah, more individual legal support.
Mohammed: And how did you get started with, (a), the law practice but then of course getting Contracts Market started up as well?
Jaime: Yeah. So, [I] came out of law school and did the typical law firm stint and that was for about six or seven years and then I went in-house because I always knew in the pit of my stomach that I wasn’t going to be a typical lawyer. Probably ever since I went into law school. I just — looking forward, I couldn’t picture myself working in a big law firm forever. And so I didn’t know what I wanted to do. At some point, I ended up taking nine months off from law and travelling a little bit.
I was always addicted to business podcasts and entrepreneurial podcasts and self-help and development and tried coaching and all those kinds of things to try and see like if I was set on leaving [the] law. And then after which — now I’m back in it, but it was after a lot of soul searching where I was like, “Is it law? Is it the people that I’m serving in the typical law firms? What is it that has this disconnect?” and I eventually realized it wasn’t so much law but it was the people that I was serving previously.
So, when I sat down and thought about who I wanted to be serving, who were the people I wanted to be having as my clients because those are my main touch points during the day, I really wanted to get into the entrepreneurial space and be serving all those people that I was listening to in podcasts and hearing about the businesses that they dreamt up and created and I really wanted to support them.
So, that’s how [the] Contracts Market was born, [it] was having a more affordable way that entrepreneurs and the people that I wanted to connect with could access legal when they were first starting out in their business and then my law firm started because mama gotta eat too. So, I had all the basics of knowing the basics of the law that I needed to help my clients with and I also wanted to have a law practice where I could really get into helping people start their businesses or grow their businesses.
And so, that’s how I have the two arms. So, one, it’s more individual legal advice, specifically for each client and then Contracts Market was the way that I could provide more affordable legal services for those just starting out or perhaps who just didn’t really need a lawyer.
I am a proponent of everyone should have access to contracts for their business and they — everyone should feel supported and confident in the business that they’re growing.
Mohammed: Right. And I suppose thinking of creative markets, like what was that, I guess, aha moment, if you will, or what were those factors that sort of just came colliding together that we’re like, “Okay, I’m going to start creating contracts for photographers, for copywriters, and I’m going to sell them all online.” Like what drove that decision specifically?
Jaime: I am a proponent of everyone should have access to contracts for their business and they — everyone should feel supported and confident in the business that they’re growing. And when I was — specifically, when I was working in law firms, there’s a high barrier to entry. You know, if you’re working with a bigger law firm, the hourly rates start about $350 and then go up from there. So, that was not something that I wanted to continue in my personal law practice or for the Contracts Market at all.
I wanted there to be an easier barrier to access — or lower the barrier to access legal. So, in my law firm, I have a lower hourly rate and even still with that, because I also have to still make an income, but with that, I was still turning away people who couldn’t afford the individual services and I was doing work that I was doing over and over and over again. I knew that I could create templates and make that accessible on a mass scale and give people the tools that they needed which is a guide on how to customize those contract templates for themselves.
All the people that were coming to me and perhaps my rates were too expensive were people who were fine to put a couple [of] hours in or even just an hour to customize the template for themselves and then they have something that they feel confident in. So, really, for me, it was being able to still serve the people I want to serve in my law firm but then make it more accessible to everyone.
Mohammed: And I suppose with the idea around contracts and making sure you’re legally protected, what would be some examples of common legal mistakes freelancers that you were interacting with or coming across that were making that you’re like, “Okay, this is exactly why you need a contract to protect yourself from going forward”?
Jaime: Yeah, that’s a good question. So, a lot of the time, when people have got free templates off the internet or they’ve Googled cut-and-paste contracts or clauses that they’ve seen or that they think they need in their business and the biggest mistake that I see — well, there’s two. One is that it just doesn’t cover what they don’t know about and that’s not a slight on entrepreneurs because they didn’t go to law school for three years and I don’t expect them to have a law degree, but you don’t know what you don’t know.
I think that’s what keeps entrepreneurs up at night with their contracts they’re sending them out hoping that, if they’ve created them themselves, that they’ve covered everything. So, a lot of the time, they’re just missing key pieces. The other issue or mistake that I see are contracts that are one-sided and often not in favour of the entrepreneur and I think that comes from a really good place in an entrepreneur’s heart is that they’re trying to serve their clients as best that they can.
They want to show their clients that they will go over and above what is expected of them to perform this job that they’ve been hired to do really, really well, but it comes off that why bother having a contract because it’s so in favour of their client that they might as well not have it. So, those are the two things that I see as mistakes most commonly and so I believe in fair, balanced contracts.
Yes, you want to show your client that you’re professional and you’re going to deliver on the services that they’re hiring you to complete but you also want to make sure that, in the end, you are protected as well. And then one thing I often see with — and this might be a good takeaway from your audience, is if you’re incorporated, like you’ve gone that extra step of forming a company, make sure that you’re signing your contracts on behalf of the company.
A lot of the times, I see — it’s so like — it’s just something that is overseen all the time, but they’re signing all their contracts personally because maybe the person on the other side doesn’t know or they just haven’t been told like now that you’re a company, you should be signing on behalf of your company, not personally, because that’s one of the reasons you incorporate is to separate yourself from your company. So, yeah, just a quick little takeaway there.
Mohammed: A very important one.
Jaime: Very important, yeah.
If you’re providing website design, perhaps, maybe it’s — it just says, “We’ll provide a website with eight pages or layouts,” but then you have this contract that’s so open-ended to the client, like what does that actually mean?
Mohammed: And when you said that freelancers make things one-sided because they’re trying to do right by their clients, what are some examples of that?
Jaime: Yeah. So, examples of that might be a cancellation clause where the client has all these options to cancel the contract on [a] certain amount of notice, perhaps, but then what happens if something comes up for you, the freelancer, and you just can’t — you can’t make it on the services that you agreed to? Perhaps you get sick or you — whatever reason, you can’t make it on the services. You should have a way to get out of that contract if you need to and a fair way.
A lot of times, I see deliverables that are really vague so if you’re providing website design, perhaps, maybe it’s — it just says, “We’ll provide a website with eight pages or layouts,” but then you have this contract that’s so open-ended to the client, like what does that actually mean? Does it mean they get 30 different edits on that? Do they have access to you all the time?
Like making sure — so, one of the things I talk about with my clients is make sure that, yes, you can promise your clients certain deliverables but make sure they’re really specific because you want to avoid that scope creep situation where their contract is so vague that your client just gets all these different advantages worked into the services you’re providing and you — as these requests come in, your hourly rate or your fee for the services is just — you’re watching it diminish and diminish.
So, those are the kind of things that just keep an eye out or, yeah, even intellectual property clauses. Maybe you’re just giving them everything but you need to retain some of that intellectual property because you need to use it in a different way for another client down the road or you’ve created a resource and you want to be able to use that resource again in your business and you don’t want to give that away to your client.
Mohammed: At times, freelancers won’t get a contract put together. Usually, they would have sent a proposal to the client with a fee structure and the client is like, “Yeah, okay this seems like a good scope of work and I’m okay with your price, send me your invoice,” or just to kind of like get some kind of paper and some kind of agreement going and not exactly a contract.
And so I’m wondering, is the contract still needed if you have that sort of back and forth and scope sort of defined along with the pricing and all of that? Or, I guess, what is lacking?
Jaime: That would be considered a contract, for sure. So, the three things that you need to form a contract are an intention to enter into that contract or that relationship, offer an acceptance on the party offering the services, the client accepting, and then some kind of consideration, which means some value exchange. So, it’s pretty easy in a situation with a freelancer because you have the freelancer offering the services and then the client paying the money.
So, if you have all those things, even though you don’t have the word “contract” written at the top of your paper, it’s still a contract. But, what you’re missing is, if you’re just sending the deliverables and an invoice setting out your fee structure and how you expect payment, might be all those other clauses that I was referring to at the beginning that entrepreneurs don’t know that they need which is so who owns those deliverables at the end of the contract?
For instance, for a photographer, maybe the photographer is keeping all the copyright in that and they’re just giving a license to their client to use those photos for their personal use or their branding or their website, et cetera, but they’re not allowed to go and sell those photos to a third party. The photographer wants to keep those copyrights.
So, those are the kind of clauses that I was mentioning earlier that often when I see just the services and how it’s going to be paid for, you’re missing out on a lot of the other nitty-gritties of the contract that don’t seem like a big deal at the beginning but when your client has questions down the road or is using the work differently than you expected them to, it ends up in a breakdown of communication because you didn’t have that all set in a more robust form.
That’s why I recommend having and going a little bit further those next steps of setting some of the other requirements. A big one, for instance, is a communication clause. Like I love having a client communication clause in contracts because it sets that expectation that if you send something to your client for delivery and review and you need approval as the freelancer to move forward with the balance of the work, you expect their feedback in 48 hours, perhaps, or maybe seven days on a longer project.
And that’s setting the tone for the relationship that your client needs to be involved but it also helps manage your workflow and your time because you know that even at the latest time frame when your client is expected to give you back communication, you can then move on to the next step. And then what happens if they don’t? So, perhaps if they don’t give you your feedback, you as the freelancer have the opportunity to delay the services that you provide a little bit longer because now you’re delayed because your client didn’t give you the feedback.
Or perhaps then if it goes beyond a certain rate, you can charge an additional fee to make up for all that lost, wasted time in between when you’ve lost your workflow. So, those are the kind of things that if you don’t have those clear terms from the get-go, your relationship can sour pretty quickly.
Don’t get too hung up on having this formal document if you’re just at the stage of your business where it doesn’t make sense, you have no extra money to purchase something or get independent legal advice.
Mohammed: And so here I am starting my freelancing and I decide that, “Hey, sure, I’ve had a great chat with this client, the discovery call went great, it looks like we’re gonna go ahead, we’ve talked about [the] scope of work and our pricing and all of that kind of stuff, but just to make sure I am protecting myself and covering all of my bases and sleeping sound at night, I’d like to get myself a contract.”
Now, typically, most people will just be freelancer contract or photographer contract online and just go to Google search and then there’s a bunch of different results that come in. As freelancers are sort of like going through that path or that discovery stage or looking things up, what should they be looking for when they’re purchasing contracts from an online vendor?
Jaime: Yeah. First of all, I just want to say there’s no shame in bootstrapping. I think a lot of people get hung up on like, “Oh, I’ve got to invest a lot in the beginning,” like just even going back to your earlier question, like even if you just sit down and you write out on a notepad like these are what I expect from my client, this is what I expect my client expects from me and set that out and then put all that in an email, that’s a contract if your client accepts it.
So, don’t get too hung up on having this formal document if you’re just at the stage of your business where it doesn’t make sense, you have no extra money to purchase something or get independent legal advice. But when you’re looking at templates on the internet, just consider your sources. There are a lot of online templates out there that have been made specifically for American entrepreneurs and mostly they’re going to apply but just be really — review them.
I mean, I’m not an American lawyer but [the] common law system is very similar so a lot of it still applies in Canada, but that is just something to be aware of, that the laws are different in Canada and the US. And then just consider your source. Are you buying templates from someone where you could call them and ask a question? Or is it a faceless company and you’re not really sure who drafted them? Were they lawyer drafted?
Just make sure that you’re vetting your sources and it’s not drafted from your favourite blogger who doesn’t have a law degree, but if they have a law degree and they’ve practiced, then, by all means, buy from your favourite blogger.
Mohammed: And in terms of contracts that are sent by the client, what should freelancers be looking for? Or what specifically might be some things that freelancers should take into account before they sign a contract that a client had sent over?
Jaime: Yeah, so that’s a great question. So, I would definitely review it carefully and just make sure that everything’s in line with your business practices and how you typically do business. What are the payment terms? Do you have to submit invoices and wait 60 days? Like some bigger companies, if you start working with larger companies, they have a very set pay structure and so perhaps you submit your invoice and you’re not — they don’t have to pay you for 60 days down the road.
And then when it comes to negotiating changes to contracts, think of your leverage. I mean, if you’re negotiating with a big company, like Google, for instance, you might not have a lot of leverage but it doesn’t hurt to ask and I think a lot of entrepreneurs, if they see something in a contract they don’t agree with, they feel like they can’t negotiate. And — but if you’re dealing with another entrepreneur, another business that you have a bit more relationship with, then always ask for the changes that you’re wanting.
It usually shows that you have — you looked at it carefully, that you’re professional. I think a lot of people start sweating and hyperventilating when they feel like they have to ask questions [about] their contracts and just remember that it is a document that is going to govern your relationship while you’re working together so you both want to be on the same page from the start. So, just making sure that, again, it’s not one-sided. You’re not signing your life away.
Look for clauses in there, especially around [the] intellectual property which is anything that you’re creating as part of the deliverables or the works that you’re providing, who owns that at the end of the day? That’s usually where I see a lot of the disputes coming up. And then a big one, which is such a small clause in the contract that a lot of people overlook but is the governing law clause.
That is the clause that decides which laws of the world govern the contract and especially when you’re working with international clients, now everybody’s working with everybody everywhere, if it’s your contract, definitely make the laws of your province or if you’re American, your state, govern because it gets really expensive if you’re working with a client in Australia and there’s no governing laws clause in there and then you’re always wondering, “Well, what law is interpreting this contract?”
Does your client in Australia get to start a lawsuit in Sydney and you get to pay your way to go fight a lawsuit in Sydney? That’s not my idea of a good time when going to Australia when we eventually can again. So, just pay attention to the details. And then if your spidey senses are tingling and you’re getting that feeling in your gut that is saying, “Hmm, there’s something not quite right here,” I recommend — that’s what lawyers are there for and you might think — it might just be an hour of time and you might think that paying a lawyer’s hourly rate is not the best use of your time but I’ve seen that mostly it is.
And I’m not just saying that because I’m a lawyer but we can — that’s — we spend a lot of time digging through contracts and making them work for our clients and, often, it will just give you that peace of mind or we save you a lot of money down the road when a potential dispute is avoided because you took that extra time, because you got that feeling in your gut that there was something off. So lawyers are there to help you.
I understand that they can be expensive, for sure, but there is a whole group of — you know, lawyers aren’t what they used to be 30 years ago where the — like we’re more in the entrepreneurial space. A lot of us are moving to flat-fee retainers now just in response to that fear of the hourly rate which is terrifying. I’ve had to hire a lawyer before and I didn’t like paying their hourly rate. So, if you do have to hire a lawyer, I recommend asking if they work on a flat-fee and so that you can budget for that service. I know I do that in my law firm and I found that it’s a great way to make sure that everybody gets what they need.
The first instance when a client doesn’t get you back the work on time, just send them a friendly reminder, like, “Hi, remember the terms of the contract. I need you to get this back to me ASAP or else this…”
Mohammed: Okay, I’ve got my discovery call done, the client and I have agreed on the scope, I’ve sent them over the proposed rates and everything, they’ve signed off on it, then I send them over my contract, everything looks good, they’ve signed it, [the] project is done or there are some issues with the project and now the question is, how do I enforce this contract? Like how can Canadian freelancers enforce a contract that the client signed?
Jaime: Yeah. So, I think that a lot of issues can be avoided by having really clear communication and I think — I’ve been reading a lot about this with freelancers and it’s really interesting that you bring this up because someone brought this up the other day and it’s just — keep having those clear communication because it doesn’t do anybody any good by the time that something, like an issue’s come to a head, that you’ve let it go, let it go, let it go, and then your client keeps on doing it and then you finally blow up and turn to a lawyer first.
I think if you have those — that clear line of communication, like the first instance when a client doesn’t get you back the work on time, just send them a friendly reminder, like, “Hi, remember the terms of the contract. I need you to get this back to me ASAP or else this…” If that doesn’t work or people are going against the contract, I don’t recommend leaving it until it festers, like, at that point, it’s a good idea to hire a lawyer or speak with — there’s a lot of free legal clinics around.
I know in BC, if you have a contract that’s under $5,000, there’s a free civil tribunal [to] which you can submit your dispute to and it’s all done electronically which is great and then you have to enforce it. So, yeah, unfortunately, at the enforcement point, if it’s a high enough number that it’s worth your time, then — and you need to proceed with a claim against them, then I recommend hiring a lawyer at that point. But I do believe that if open communication is followed, a lot of the time, disputes can be avoided, but not all the time. So, that’s why lawyers are there. Yeah.
Mohammed: And with regards to working with a client, things are going well, and it’s like, “Oh, actually, we want you to also do x, y, z,” so, this change in the scope, should I go get a new contract and get them to sign all the other stuff? How should freelancers manage that increase or decrease in scope?
Jaime: Yeah. So, this happens all the time and usually, I see it as an increase in scope because a freelancer is doing such a great job that the client needs more or didn’t realize how much they needed. So, in all the contracts that are either on the Contracts Market or that I draft, I always put an additional services clause in there and there [are] two reasons for that. The first is that it lists all the additional services that you provide, which is basically marketing to a client that’s already decided to hire you because maybe they don’t even know that you provided social media management as their website designer.
So, they’re likely to turn to you and hire you first so that’s the reason why I love an additional services clause. Make your contract work for you. And then, the second reason is because the additional services says, “These are all the things that I can provide that you didn’t buy and that you didn’t hire me for, and if you want to hire me, this is my hourly rate or maybe we’ll agree on a different rate,” but it sets out clearly in your contract that these are the things over and above what you’ve been hired to do that you’re going to charge them more for it and there’s the opportunity to come back and talk to the freelancer to hire them for more.
In the event where they want to, I definitely recommend doing an amendment to the contract which is the formal recent way of doing it which is just saying, “We signed this agreement on x date. Client has decided they’re going to hire me for this and this is the additional fee scope,” or, more informally, which I see a lot, which is still enforceable, it just can get lost in the wash a little bit is an email confirmation saying, “In accordance with the contract, in addition to that, you’ve asked for these additional services and we’re happy to provide it for you at our hourly rate which we’ll track and invoice to you on the next date,” or whatever that is.
But definitely, this is when we’re coming back to your question about conflict. These are the things that people forget that they agreed to like, “Oh, yeah, I need these things but I forgot that I asked for it,” or a big one is that, like for wedding photographers or if you’re doing events and the couple wants the photographer to stay for an extra couple hours at the end and it’s a great idea to say, “These are the number of hours I’m shooting and if you want additional hours, then, and those are requested on the wedding day, this is my hourly rate.”
So, you then invoice them with those additional hours which they’ve already agreed to in the contract. So, yeah, definitely, the best way to do it is an amendment to the contract and the second-best way is an email showing that everybody’s agreed. And that goes for the decrease as well.
Any time there’s an exchange of value, I recommend having a contract, going back to the idea that a contract can be a simple email setting out the expectations that both people have.
Mohammed: And we’ve talked quite a bit about the reasons why people should get a contract, what they should be looking for, amending it, all of that. When does it not make sense to have a contract, if there is even a time when it doesn’t?
Jaime: When you don’t need a contract?
Jaime: I mean, that’s a judgment call. I, as a lawyer, don’t want to sit here and say there’s never a time that you should never contract, but like use your common sense. I mean, if there’s nothing at risk, if you don’t see — if you wouldn’t pursue them if they didn’t pay you for something — I mean, any time there’s an exchange, I feel like this is a trick question, but if at any time there’s an exchange of value, I recommend having a contract, going back to the idea that a contract can be a simple email setting out the expectations that both people have.
I see this a lot happen with people who collaborate, for instance, in the online space where they say, “You know, let’s do a workshop together,” “Yeah, yeah, let’s do a workshop,” and then it’s the night before and one party has done all their slide deck, they’ve presented materials, they’ve been posting it all over their social media and the other person’s done nothing and there is no agreement there, even in writing, to say like who’s responsible for what? What are the deadlines? What’s the value exchange?
Maybe it’s not a money exchange but perhaps it’s like, “Hey, I’ll post your information on my socials three times leading up to the event,” “I’ll post your information on my socials three times leading up to the event.” So, even in a situation like that where you’re not thinking, “Oh, there’s no money, I’m not being hired,” just think there’s still your time and your resources being spent on these things. That’s a value exchange.
So, perhaps not a formal contract and often these things go at the speed of light, but just make sure that you each are clear on the terms of why you’re working together or you’re teaming up to do something and what happens if it doesn’t.
Jaime: I think it’s just coming back to having really clear communication, setting out what each party expects so that you’re not souring that relationship at the end of the day. That’s a really good example of a relationship gone sideways and whether that’s salvageable at the end. I mean, you’re probably not going to sue them over it but it’s just more of like saving your relationship. Yeah, exactly. But I mean, webinars are big business sometimes.
Mohammed: Well, Jaime, I think there’s a lot that we’ve covered here. I really appreciate you taking this time to walk us through all of this and share your insights and expertise. It’s been great. I’d love to know what last advice you have for Canadian freelancers, whether it’s from a legal standpoint or just general business advice?
Jaime: Yeah, always register your business name. Always look — I think freelancers forget about that lovely thing called insurance which might be even unsexier than law stuff but insurance is there and a lot of freelancers don’t tap into that and it’s a good way to protect yourself. And then, at the end of the day, contracts and all of this stuff is just really about having clear, clear communication with the other parties. And I do find that if you spend a little bit of time learning about the legal side of your business, entrepreneurs feel so much more confident and protected in their business.
Mohammed: Love it.
Jaime: Yeah, I’ll leave you with that.
Mohammed: Awesome. Well, thank you so much, Jaime. I’d love to know where people can find out more about you and your work online.
Jaime: Yeah, sure. So, my contract template business is at thecontractsmarket.com and I’m on Instagram, mostly at the @contractsmarket, and my law firm, you can find me at @wildcoastlaw in British Columbia.
Mohammed: Amazing, amazing. Well, thank you so much for this opportunity to learn from you, Jaime.
Jaime: Yeah, my pleasure. Thanks so much!