How to create an airtight contract for your creator business

Business Models Take Yourself Pro
15 min read
In this Article

Imagine this: you’ve been creating stellar YouTube content for the past two years.

You open your email and see you’ve received a collaboration proposal from a well-known brand. You’re excited, and after reading their proposal, you get on a call and enter into a verbal agreement around deliverables and pricing. You do your part, but when you follow up with them for your payment—radio silence. Sound familiar?

Gone are the days when business relationships started with a handshake and got formalized through dinners. Sure, most partnerships are still born that way but add a legally binding contract to protect both parties, and the relationship becomes much more solidified.

We’ll cut right to it. No matter how big or small a transaction is, all creators need contracts. It acts as a failsafe against delayed payments, scope creep, and an overall tank in business revenue because of misaligned cash flow.

But contrary to popular belief, creating a contract doesn’t have to be complicated. Invest your time creating contracts, and it’ll pay dividends for years to come.

In this article, we’ll talk about all things contracts—what it is, what types of contracts you need, how to create them, and top tips from creators on how best to create an ironclad contract

What is a contract, and how does it help?

A contract is a legal document between a creator and the company or individual they collaborate with. It governs the scope of the collaboration and defines the terms for every action between the creator and brand.

While a Scope of Work (SoW) document only defines the specific tasks the creator will deliver, and a T&C’s document only outlines the guidelines around the deliverables—a contract is a combination of both. The former are also legally binding, but they’re not signed and are more documents than a solid, watertight agreement.

Now, you might be wondering that while contracts make sense for high-value transactions, do you really need them for the tiniest collaborations? Short answer: yes. Here's how they help:

1. Ensures absolute transparency

Verbal or email agreements are easy but not effective. A lot goes unsaid, and the constant back and forth on “who said what and to whom,” in the middle of the collaboration paints a gray area that’ll only waste your time or, worse, not get you the compensation you agreed upon.

Contractors keep creators safe and on track. As small of a sponsorship as it is, it’s imperative to get it on paper and signed so that there’s no lack of understanding as deliverables come down the line. I’ve heard stories of close friends working together without contracts, which at surface level, might sound totally fine, but money brings out the worst in people, and there’s nothing that keeps you as safe as an ironclad contract does.”

Eli Weiss, Senior Director of CX and Retention, Jones Road Beauty

By adding another step before beginning to work for someone, you’re setting the stage for crystal clarity. This contractual agreement will outline the what, why, and how of your creator relationship down to the tiniest details, like during what times in the week you can get on a call.

This transparency will protect both parties’ interests and ensure an understanding of the deliverables, timelines, compensation, and payment milestones. Without this, you’re just putting yourself at risk of doing more than and getting less than what was promised.

2. Makes your agreement legally-binding

While it’s human nature to believe it when the next person says, “don’t worry, we’ll get this done,” you can’t afford such risks or build a successful creator business based on such verbal exchanges.

To ensure both parties hold their ends of the bargain—whether it’s a brand partnership, affiliate collaboration, unique influencer arrangement like whitelisting, or one-off subcontracting assignment—hard-bounding your contract with legalities is essential.

Contracts help formalize and document any exchange of services—providing protection to both parties in case things go south, or simply act as a reference point in any role-oriented conversation. Plus, there's always scope to revise a contract. Nothing set in stone, only legally-binding papers that can be tweaked any time you or the other party wants—based on mutual consent.

Amiksha Srivastava, Freelance Digital Marketer

3. Streamline your business operations

Without a contract, you’ll never know when to expect payments, so your cash flow will fluctuate often, or you might not know when one contract ends, making it challenging for you to look for additional partnerships to maintain (or scale) your revenue.

So, a contractual agreement will help you set frameworks for your business. For example, a definite day during the month when you need to send invoices and when you’re likely to receive payments. Or clarity on each collaboration’s termination date so you can adjust your marketing activities accordingly.

Although contracts may seem like an unnecessary hiccup at first, they're also crucial for maintaining a financial backlog, so whenever you need information for tax season, you have a line of contracts that validate each piece of work you’ve done and what you’ve earned through it.

Four different types of contracts every creator needs

In a sea full of business contracts, it’s important to know which contract you need to create for what type of situation. For example, a contract with an affiliate to promote your online course will vastly differ from what you make for a brand’s LinkedIn collaboration.

Here are some common contract types for creators:

1. General agreement contract

A general agreement is a standard contract between a creator and another business. It’s the most common type of contract, states the nature of the relationship, and guides the collaboration forward by listing the deliverables and expected delivery terms between both parties.

The major purpose of a general agreement contract is to ensure all terms of the partnership are clearly stated and that both parties are protected.
It includes:

  • Nature of relationship between the two parties
  • Deliverables and their timelines
  • Collaboration purpose
  • Ownership and exclusivity
  • Compensation amount, payment method, and milestones
  • Payment terms
  • Termination clauses
  • Dispute resolution clauses
  • Working process
  • Signatures

This contract is the guiding factor for creator-brand collaborations, and in case of disputes or misunderstandings, this contract also becomes the only source of truth to settle between two parties.

This contract will also be helpful if you plan on hiring any contractors to support your creator business, like a writer to write your video scripts and a video editor to create professional-looking videos.

It'll help your future collaborations, get payments on time to maintain consistent revenue, ensure the brands respect your working process, and legally bind the entire relationship to act as a mark of authenticity.

Here’s a template you can use to create a general agreement contract.

creator contracts
Use this template

2. Service agreement contract

While not all creators provide services, if you do, you can’t miss creating a service agreement contract. This is similar to a general contract, but instead of just mentioning the terms of your relationship, here you’re also defining the terms of service delivery.

For example, if you’re a marketing YouTuber and also provide marketing strategy services to clients, you need to have a contract stating in what capacity you’ll operate, who you’ll report, and which processes you’ll follow to reach the brand’s marketing goals and how you will measure success.

Under a general agreement, the creator and business agree to collaborate for set deliverables, like promoting the company’s products on Instagram or featuring the brand in the second newsletter every month. But in a service agreement, the creator is responsible for delivering + getting results for the brand.

You’ll more or less include everything in the general agreement contract. In addition, you can include:

  • Working process, goals, and KPIs
  • Working hours and schedule
  • Mode of communication (email, SMS, Slack)
  • Independent contractor and remote work terms
  • Contract duration
  • Subcontractor clauses (optional)
  • Emergency clause (optional)

Here’s a template you can tweak and start using right away:

creator contracts
Use this template

3. Non-disclosure agreement (NDAs)

Although non-disclosures often come from the client side to prevent contractors or creators from revealing their internal business or transactional data outside, creators can also create NDAs for purposes like whitelisting, where you give brands the access to operate your social account.

NDAs are essential to ensure the information doesn’t go outside the company’s doors and that your ideas, content, data, assets, processes, or other sensitive information are secure.

This can be a part of your general or service agreement, or you can create a separate NDA document stating the terms of disclosure like duration and gravity, what is confidential, what disclosure can lead to, and how disputes will be settled.

Here’s a simple NDA contract template you can use:

creator contracts
Use this template

4. Subcontractor agreement contract

If you provide services to your clients and create content, you might benefit from hiring subcontractors. They can do the heavy lifting while you focus on your creator business and build an audience. However, even for this relationship, you need a contract.

It should include all the generic clauses like that in a general agreement like the scope of work, timelines, compensation, and payment terms, ownership, non-disclosure, subcontractor working terms, delivery processes, termination, and dispute resolution.

When sending a subcontractor agreement, be open to negotiating terms that don’t sit well with them to create a holistic contract that respects your boundaries.

Here’s a contract template you can use:

creator contracts
Use this template

Five pro tips for creating rock-solid contracts

Simply creating a contract and sending it to every brand or individual you collaborate with isn’t enough to protect your business from conflicts or lawsuits. You need to tweak this contract based on the partnerships you enter and actively take measures to safeguard your business.

Here are five best practices to help you create ironclad contracts:

1. Zero in on the tiniest of details

In an ideal world, contracts would be one-pager documents written in plain English with just two signatures at the bottom. But that’s not how it works. Contracts are never-ending for a reason—no one wants to take a chance. So, it's essential to be extremely clear on all the details around guidelines and obligations, so everything’s black and white.

Max Benz, the Founder and CEO of BankingGeek, says one of the most common mistakes creators make while drafting contracts is failing to properly identify the scope of work. This can lead to disputes down the road about what work needs to be completed and can even result in one party breaching the contract.

To avoid this, it’s important to be as specific as possible about what work needs to be done and include language that allows for changes to the scope of work if necessary. Additionally, creators should ensure that all deadlines and payment terms are clearly stated in the contract.

Failing to do so can often lead to misunderstandings and conflict. By being clear and concise from the outset, creators can help ensure their contracts are enforceable and both parties are held accountable for their obligations.

Even after working with a brand, if you realize that you missed adding an important clause in the contract, don't be afraid to update it. Prioritize clarity, and it’ll act as a failsafe, saving you time, money, and lost business—all of which are precious to a creator.

2. Don’t shy away from clarifying payment terms and methods

Every brand works with different payment terms, but before you read theirs, ensure you're clear on what type of payment cycle and modes of compensation you want to follow. Communicate it clearly to the brand in the contract itself.

Some important payment-related clauses you should clarify in the contract are:

  • Compensation details
  • Payment form—commission, flat fee, sale-basis
  • Payment terms—net 0, net 30, net 60
  • Advance payment
  • Payment milestones and timelines
  • Payment method—payroll software, PayPal, direct bank transfer

Often brands have rigid payment terms; they expect creators to blindly align with them. But, you can always negotiate the terms by explaining why it’s important to you and how it impacts your business and then find a middle ground.

For example, if you work with net 0 payments, meaning you like the invoices being paid almost instantly once the deliverables are done, but the brand has a 30-day payment cycle, you can negotiate to get paid within seven days. This will allow you to manage finances and cash flow and give the brand enough time to process the payment.

Remember: strong brand-creator relationships aren’t formed when only one side dominates the terms of working, but when both parties happily enter the agreement on favorable terms.

3. Make way for dispute resolution

Although dispute resolution sounds a little too legally heavy, it’s a necessary part of your contract, especially if you work with brands across the world. In a contract, everything is mentioned clearly, but in case things go south and a dispute arises, there should be specific clauses that guide the resolution.

When you’re working globally, this dispute resolution section will also highlight in which jurisdiction the disputes will be resolved, which state’s rules apply and how the case will proceed from filing to the decision.

Disclaimer: This is not meant to scare you but to look at business partnerships from a practical lens. You can try your best to identify red flags and vet brands before collaborating with them, but it’s better to be safe than sorry if something doesn’t work out, or a sensitive clause is violated.

So, don’t take dispute resolution lightly and ensure you’re using the right legal language to govern the terms and conditions of resolving such conflicts to enforce the contract in the right way.

4. Swallow the hard pill—create termination clauses

While no creator likes parting ways with a brand, it’ll inevitably happen, so your best bet is to be prepared for it so you and the brand can exit the partnership with respectable terms. This will help you leave the collaboration with dignity and avoid having the brand abruptly end the partnership with you.

With these clauses, you’ll also know exactly when the collaboration ends, so you can start your outreach or respond to brands with your availability. Besides, it will guide you if the brand wants to exit in the middle of the collaboration so you’re not left high and dry and can manage your work pipeline accordingly.

This is what a termination section in the contract should define:

  • What will the creator be paid if the brand ends the contract before the maturity period?
  • What are the terms of deposit refund if the contract is rescinded shortly after issuance?
  • How will the remaining deliverables be executed?
  • Will there be a kill fee?
  • Who will own the content if it’s rejected or the contract has ended?

Overall, this termination clause will give you peace of mind and ensure no one breaches the contract in the future, unintentionally leading to disputes.

5. Don’t make it more complicated than it has to be

Although contracts carry a legal and professional connotation, they don’t necessarily have to be jargon-y or super long. You can be concise and still relay intent to ensure maximum clarity in each section without making it too complicated.

Instead of including every clause in a general contract, only mention sections that make sense to your business and the nature of relationships with partners.

Sometimes brands also send their own standard contracts. While there’s no harm in signing these contracts, ensure you read them properly and negotiate the terms that don’t align with your working terms. Here’s some sound advice on this:

creator contracts
Image source

As a general rule of thumb, prioritize clarity over complicated wording. Chuck Moran, the creator of Online Video Mastery, agrees:

You should keep updating your contract wording as you encounter issues with clients. My agreement is written in very plain English and only has some of the more legal sounding stuff all the way at the bottom. I rarely get any pushback.

Put it on paper!

Creating contracts isn’t just for MNCs. And today, creators can’t afford to jump headfirst into building a creator business without setting the right systems in place.

Creators enter into frequent partnerships with brands, so they need contracts just as much as any other business. Apart from legal reasons, a contract is essential to lay ground rules and safeguard the businesses against unexpected setbacks that can severely impact creator revenue and motivation.

So, use these tips to formulate your contracts and align your operations to scale your creator business the right way!

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Komal Ahuja

Komal is a freelance B2B SaaS writer who specializes in writing data-driven blog posts around marketing, sales and eCommerce. When she's not writing, you can find her enjoying her hoop flow or creating content for freelancers on her socials!

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