Include a Kill Fee in Your Contract

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Before you begin freelance graphic design work for any client, take the time to draw up a contract to protect yourself in case something goes south with the job. When you write the freelance contract, don't forget to include a kill fee.

Just as deposits help protect you from doing a lot of work and then not being paid for it, a kill fee or cancellation fee serves a similar purpose. The kill fee ensures that you are paid for all work that you have done up to the time that the client notifies you they are not going to continue. A client may cancel for any number of reasons, perhaps because they've decided not to pursue the project due to timing, money or change of focus. They may also cancel the work because they are not happy with your initial designs. Whatever the reason, the kill fee helps cover your billable time and any tangible expenses, such as delivery fees, you incur up to the point of cancellation.

Non-Refundable Deposit Serves as Kill Fee

Some designers may specify that the deposit, which is usually a percentage of the project estimate, serves as a kill fee. Your freelance design contract might specify that the kill fee is equal to the amount of the initial deposit plus any additional expenses incurred above and beyond the deposit amount.

One important reason for explicitly including a cancellation clause or non-refundable deposit in your contract is that most canceled design projects are done so before you deliver anything tangible to the client other than a few preliminary sketches. Because of this, clients may believe that they shouldn't have to pay much because you haven't done much. They don't understand how many hours of thinking time goes into a project at the beginning.

A non-refundable deposit and cancellation clause protects you from having hours of uncompensated work during the critical research, brainstorming and conceptualization phase of a project. You don't want to work with a client who objects to a cancellation clause because that client is just the type that a cancellation clause or kill fee is designed to protect you from.

Additional Specifications

Additionally, the cancellation clause of your contract may further specify:

  • All materials delivered to the client to date in connection with that specific project must be returned.
  • The use of work done in connection with the project without your consent could result in additional fees or legal action.
  • You keep all original artwork and digital files prepared in connection with the project.

Some of these stipulations may also appear in other parts of your freelance design contract, such as a specific Ownership of Artwork clause.

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