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The importance of digital marketing continues to grow as traditional media subsides in popularity. Many niche digital marketing agencies are popping up, specialising in areas such as engaging social media influencers, search engine optimisation (SEO) or ad retargeting. However, the success of your media agency depends on having the right contracts in place. This article highlights the main contracts you need, such as a:

  • client agreement;
  • contractor agreement; and
  • employment agreement.

Client Agreement

Your media agency primarily makes money by performing work for clients. A client agreement sets out clear terms between you and your clients about the work and protects you from any disputes that arise.

For media agencies, a client agreement will usually set out the following details:

  •  how much you are going to get paid;
  •  when are you going to get paid;
  •  what work you have to perform;
  •  any specific deliverables that may relate to the work (such as social media graphics);
  •  in what circumstances will you offer a refund; and
  •  the identity of those who own the intellectual property.

Those details will protect your business from any issues that arise from client disputes.

For example, you may create a Facebook sales funnel for a client, who then decides to cancel their business with you. However, they continue to use the funnel you built to drive clients to their page. A carefully drafted client agreement will:

  • make it clear to clients that they must continue to pay to use your Facebook sales funnel; and
  • allow you to enforce your rights and protect your business.

As your business grows, you may need to review whether your client agreement adequately covers new issues. You may need different terms or conditions for different types of clients or to streamline any dispute resolution processes based on your past experience with clients. You may also want to adapt your client agreement to address any future issues that are part of a media agency.

Contractor Agreement

Once your business takes off, you will have clients asking you to do more and more work that you can’t manage by yourself. There are two main ways media agencies engage extra sets of hands: either as a contractor or an employee.

Most media agencies rely on a network of contractors to perform one-off jobs relating to your scope of work for the client.

For example, you might use a photographer to do a photoshoot or a graphic designer who designs marketing material. When you engage one of these people to do specific pieces of work, you are in a contractor relationship with that person. Therefore, your media agency should have a contractor agreement in place to govern the terms and conditions of that relationship.

A contractor agreement will set out the:

  • terms the contractor will be performing the work for you;
  • rights and obligations under the agreement.

For example, your agreement should cover the necessary intellectual property rights to use the contractor’s work for its intended purpose. That might mean obtaining permission from a photographer to use their photos for a client’s press release. If the client has given you specific requirements such as a milestone date or a particular quality of finished product, you are then obliged to pass on this information to the contractor.

Employment Agreement

If your business is getting repeat clients, you will need some ongoing help in running your day-to-day operations. At this point in your business, you should consider hiring employees. Hiring employees allows you to grow your business quickly as you can take on more work.

For example, you may want to hire someone to manage your finances and administration during business days so that you are free to focus on attracting new clients.

You will need to have an employment agreement outlines the working conditions, pay and expectations of your employees. An employment agreement will cover different rights and obligations to a contractor agreement. You should be careful to know the difference or else you may be using ‘sham contracts’. 

A ‘sham contract’ is where an employer passes off an employment relationship as a contractor arrangement rather than as an employee. Such contracts are designed to avoid paying out entitlements such as superannuation or annual leave.

In general, if you are looking to engage a person for a set piece of work, they will likely be seen to be a contractor. If you are looking to engage a person on an ongoing basis, you may be engaging this person as an employee.

Key Takeaways

If you’re a media agency who has a thriving client base and relies on external labour (whether they are employees or contractors), you need to have the right contracts in place to protect your business and clarify your working relationships with clients, employees or contractors. If you need assistance with contracts for your media agency, get in touch with LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page.

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