12 clauses every agency agreement (contract) needs
Scope, payment, IP, termination and eight more clauses that protect your agency and your client, each with plain-English example wording you can adapt.
The Bitrack team· ·8 min read
Every agency agreement needs twelve clauses: scope, deliverables and acceptance, change requests, payment terms, deposit, IP ownership, confidentiality, client responsibilities, timelines, termination, warranties and liability, and governing law. Each one answers a question that will otherwise get answered in the middle of a dispute, when nobody is in a generous mood. Below is what each clause does, with plain-English example wording you can adapt.
Why plain English beats legalese
Agency agreements fail less often because of missing Latin and more often because nobody on either side understood what they signed. A clause your client can read in one pass is a clause they'll remember when they ask for "one more small thing." Your lawyer can tighten the language; your job is to make sure the business terms are right and clear.
The examples below assume a fictional agency, Brightline Studio, and a client called the Client. Where you see a number, it's an example, not a recommendation.
Clauses 1 to 3: what you're doing
1. Scope of work
The scope clause points to the exact list of work you've agreed to, usually in the accepted proposal or a statement of work (SOW). Everything not listed is out of scope.
Example wording:
Brightline will provide the services and deliverables described in Statement of Work #2026-014 (the "SOW"). Any work not described in the SOW is outside the scope of this agreement and will be handled under the Change Requests section.
2. Deliverables and acceptance
Define how a deliverable becomes "done." Without an acceptance window, a project can sit at 95% complete for months while the final invoice waits.
Example wording:
When Brightline delivers a milestone, the Client has 5 business days to approve it or send a written list of specific changes needed to meet the SOW. If Brightline receives no response within that period, the milestone is treated as accepted. Each milestone includes two rounds of revisions.
3. Change requests
Scope changes are normal. Unpriced scope changes are how agencies lose money. This clause gives both sides a simple, agreed way to add work. Our guide to scope creep covers the conversation side of this.
Example wording:
Either party may request a change to the SOW in writing. Brightline will respond with the effect on cost and timeline within 3 business days. No change work begins until the Client approves the estimate in writing. Approved changes are billed at the rates in the SOW or, if not listed, at $150 per hour.
Clauses 4 and 5: getting paid
4. Payment terms and late fees
State when invoices are issued, when they're due, how they can be paid, and what happens when they're late. Check your state's rules on late fee limits before choosing a rate.
Example wording:
Brightline will invoice according to the payment schedule in the SOW. Invoices are due within 15 days of the invoice date. Late balances accrue a fee of 1.5% per month, or the maximum allowed by law if lower. If any invoice is more than 30 days overdue, Brightline may pause work until the account is current, and the timeline will move accordingly.
The "pause work" sentence is the one that actually gets invoices paid. For the follow-up side, see our guide to chasing late invoices.
5. Deposit
A deposit confirms commitment and covers your early costs. Make it clear that work doesn't start until it's paid, and whether it's refundable.
Example wording:
The Client will pay a non-refundable deposit of 40% of the project fee before work begins. The deposit is credited toward the final project fee. Project dates are reserved only once the deposit is received.
Clauses 6 and 7: who owns what, and who knows what
6. Intellectual property ownership and transfer on payment
Clients usually expect to own the final work. That's reasonable, as long as ownership transfers when they've paid for it. Keep ownership of your pre-existing tools, code libraries and methods, and grant the client a license to use them as part of the deliverables.
Example wording:
Once the Client has paid all fees due under this agreement, Brightline assigns to the Client all rights in the final deliverables. Until full payment, Brightline retains ownership and grants the Client a limited license to review the work. Brightline keeps ownership of its pre-existing materials, tools and know-how, and grants the Client a permanent, non-exclusive license to use any of them included in the deliverables. Third-party assets (fonts, stock images, plugins) are subject to their own licenses.
7. Confidentiality
Both sides will share things they don't want repeated: pricing, plans, customer data, logins. A mutual clause protects both of you. For larger engagements, a separate NDA may come before the agreement.
Example wording:
Each party will keep the other's confidential information private, use it only to perform this agreement, and share it only with people who need it for that purpose. This does not apply to information that is public, already known to the receiving party, or required to be disclosed by law. This obligation lasts for 3 years after the agreement ends.
Clauses 8 and 9: dependencies and time
8. Client responsibilities and dependencies
Most project delays start on the client side: late content, slow feedback, missing access. List what you need from them so delays are attributed fairly.
Example wording:
The Client will provide content, brand assets, system access and feedback as described in the SOW, and will name one person with authority to approve work. The Client is responsible for the accuracy and legal rights to any content it provides.
9. Timelines and delays
Connect the timeline to the client's responsibilities, and say what happens when a project stalls.
Example wording:
Project dates in the SOW assume timely Client feedback and materials. If the Client is late, dates move by at least the same amount, subject to Brightline's availability. If a project is paused at the Client's request or for lack of response for more than 30 days, Brightline may invoice for work completed to date and reschedule the remaining work.
Clauses 10 to 12: when things go wrong
10. Termination and kill fee
Either side should be able to exit. A kill fee compensates you for reserved time you can't easily resell.
Example wording:
Either party may end this agreement with 15 days' written notice. Either party may end it immediately if the other materially breaches it and doesn't fix the breach within 10 days of notice. If the Client ends the agreement without cause, the Client will pay for all work completed to date plus a kill fee of 25% of the remaining project fee. Ownership transfers only for work that has been paid for.
11. Warranties and limitation of liability
Promise what you control (professional work that matches the SOW), disclaim what you don't (business results, third-party platforms), and cap your exposure.
Example wording:
Brightline will perform the services in a professional manner consistent with industry standards. Brightline does not guarantee specific business results, such as traffic, rankings or revenue. Except for breaches of confidentiality or amounts owed, neither party's total liability under this agreement will exceed the fees paid to Brightline in the 12 months before the claim. Neither party is liable for indirect or consequential damages, including lost profits.
12. Governing law and disputes
Choose which state's law applies and how you'll resolve disagreements before they happen. Many agencies prefer a step up approach: talk, then mediate, then go to court or arbitration.
Example wording:
This agreement is governed by the laws of the State of [State]. If a dispute arises, the parties will first try to resolve it through good-faith discussion for 30 days, then through mediation. If mediation fails, either party may bring the dispute in the state or federal courts located in [County, State].
Bonus clauses worth adding
Portfolio rights
Without this, you technically need permission every time you want to show the work.
Example wording:
Brightline may display the final deliverables and describe the project in its portfolio and marketing, unless the Client asks in writing to keep the project confidential.
Non-solicitation
Protects you from a client hiring your designer directly after launch. Some states limit these clauses, so ask your lawyer how far yours can go.
Example wording:
During the agreement and for 12 months after, neither party will directly solicit for employment any employee of the other party who worked on this project, without the other party's written consent.
Quick reference
| Clause | Question it answers | Most common mistake |
|---|---|---|
| Scope | What exactly are we doing? | Pointing to a vague proposal |
| Acceptance | When is it done? | No deadline for approval |
| Change requests | How do we add work? | Starting before the estimate is approved |
| Payment terms | When and how do we pay? | No consequence for late payment |
| Deposit | What starts the work? | Starting before the deposit clears |
| IP | Who owns what, and when? | Transferring ownership on signature |
| Confidentiality | What stays private? | One-sided in the agency's favor only |
| Client responsibilities | What do we need from you? | Not listing them |
| Timelines | What happens when it slips? | Fixed dates with no dependency |
| Termination | How do we exit? | No payment for work in progress |
| Liability | How much is at risk? | No cap |
| Governing law | Where are disputes settled? | Leaving it out entirely |
Where these clauses come from: the proposal
The cleanest agreements are generated from the proposal the client already accepted, so the scope, price and payment schedule match word for word. If you're still working on that step, start with our web design proposal template. If you're deciding how to structure the fee itself, read retainer vs fixed price, since retainers need extra clauses for rollover and minimum term.
How Bitrack helps
In Bitrack, an accepted proposal can generate the agreement (a contract, SOW or NDA) from your own template, so scope and pricing carry over without retyping. Both sides e-sign online, and the signed agreement comes with a certificate. Clients can review and sign from the client portal, and invoices follow the agreed payment schedule. See agreements for how it works.
Get the twelve clauses right once, and every project after that starts on solid ground.