What clauses belong in every agency contract?
What does the Contract clause library do, and who is it for?
Browse 27 agency contract clauses with plain explanations.
For: Any agency owner
27 clauses across 9 categories
Scope
Scope of work
Defines exactly what you are delivering, in specifics rather than adjectives. A precise scope is the single best defence against scope creep, because anything outside it is visibly a change, not an assumption.
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Scope of work
Defines exactly what you are delivering, in specifics rather than adjectives. A precise scope is the single best defence against scope creep, because anything outside it is visibly a change, not an assumption.
The Agency will deliver the services and deliverables set out in Schedule A. Anything not listed in Schedule A is outside scope and handled under the change order process.
A vague scope is where margin quietly disappears.
Change order
Sets out how new or expanded work gets agreed and priced once the project is running. It turns scope changes into a quick, factual conversation about cost and timeline rather than an awkward favour.
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Change order
Sets out how new or expanded work gets agreed and priced once the project is running. It turns scope changes into a quick, factual conversation about cost and timeline rather than an awkward favour.
Any change to the scope, timeline or fees must be agreed in writing by both parties before the additional work begins. Each change order updates the relevant Schedule.
Makes saying yes to extra work a commercial decision, not a free one.
Acceptance criteria
States how a deliverable is reviewed and signed off, and what happens if the client does not respond. Without it, projects stall in an endless review loop and final payment slips.
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Acceptance criteria
States how a deliverable is reviewed and signed off, and what happens if the client does not respond. Without it, projects stall in an endless review loop and final payment slips.
The Client has 5 business days to accept a deliverable or request changes in writing. If no response is received in that window, the deliverable is deemed accepted.
Stops projects stalling in silent, open-ended review.
Payment
Payment terms
Sets when invoices are issued and when they are due. For agencies, a deposit plus staged payments protects cash flow far better than billing everything on completion, when your leverage is lowest.
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Payment terms
Sets when invoices are issued and when they are due. For agencies, a deposit plus staged payments protects cash flow far better than billing everything on completion, when your leverage is lowest.
The Client will pay a 50% deposit on signature and the balance on delivery. Invoices are due within 14 days of the invoice date.
Cash flow, not profit, is what closes most agencies.
Late fees
Adds interest or a fee to overdue invoices. The point is rarely the extra money. It is the gentle pressure that moves your invoice up the client's payment queue ahead of suppliers without one.
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Late fees
Adds interest or a fee to overdue invoices. The point is rarely the extra money. It is the gentle pressure that moves your invoice up the client's payment queue ahead of suppliers without one.
Invoices not paid by the due date accrue interest at 1.5% per month on the outstanding balance until paid in full.
Gives a polite reason to chase, and a queue position.
Expenses
Clarifies which costs are billed on top of fees, such as stock, software, travel or third-party licences. Spelling it out avoids the uncomfortable conversation where the client assumed everything was included.
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Expenses
Clarifies which costs are billed on top of fees, such as stock, software, travel or third-party licences. Spelling it out avoids the uncomfortable conversation where the client assumed everything was included.
Pre-approved third-party costs (stock, licences, travel) are billed at cost plus 10% and itemised on the relevant invoice.
Stops pass-through costs eating your margin by surprise.
IP and ownership
IP ownership on delivery
Says who owns the finished work. Most agency contracts assign ownership to the client, but only on full payment, so unpaid work stays yours. Assignment transfers the right outright, which is different from a licence.
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IP ownership on delivery
Says who owns the finished work. Most agency contracts assign ownership to the client, but only on full payment, so unpaid work stays yours. Assignment transfers the right outright, which is different from a licence.
On receipt of full payment, the Agency assigns to the Client all intellectual property rights in the final deliverables created specifically for the Client under this agreement.
Ties ownership to payment, so unpaid work stays yours.
Pre-existing IP
Protects the tools, templates, code and methods you bring to the work. You assign the final deliverable but keep the underlying building blocks, otherwise every project quietly signs away your toolkit.
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Pre-existing IP
Protects the tools, templates, code and methods you bring to the work. You assign the final deliverable but keep the underlying building blocks, otherwise every project quietly signs away your toolkit.
The Agency retains ownership of all pre-existing materials, tools and know-how. The Client receives a licence to use them only as part of the delivered work.
Keeps your reusable toolkit yours across every client.
Licence to use
An alternative to full assignment, where the client gets the right to use the work but the agency keeps ownership. Common for ongoing or templated work, and often paired with a lower price than outright assignment.
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Licence to use
An alternative to full assignment, where the client gets the right to use the work but the agency keeps ownership. Common for ongoing or templated work, and often paired with a lower price than outright assignment.
The Agency grants the Client a perpetual, non-exclusive licence to use the deliverables for its own business purposes. Ownership remains with the Agency.
Lets you price ownership and usage as two different things.
Portfolio rights
Reserves your right to show the work in your portfolio, case studies and award entries. Easy to forget, painful to lose, since your past work is how you win the next client.
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Portfolio rights
Reserves your right to show the work in your portfolio, case studies and award entries. Easy to forget, painful to lose, since your past work is how you win the next client.
The Agency may display the deliverables and describe the engagement in its portfolio and marketing, unless the Client requests confidentiality in writing.
Your past work is your best sales tool, protect the right to show it.
Liability
Limitation of liability
Caps how much the agency can be held liable for if something goes wrong, often at the total fees paid. It is one of the most negotiated terms in any services contract, and going without one is a real risk.
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Limitation of liability
Caps how much the agency can be held liable for if something goes wrong, often at the total fees paid. It is one of the most negotiated terms in any services contract, and going without one is a real risk.
The Agency's total liability under this agreement is limited to the total fees paid by the Client in the 12 months before the claim. Neither party is liable for indirect or consequential loss.
Caps a worst-case claim at a number you can survive.
Indemnification
One party agrees to cover the other's losses from specific third-party claims, such as an IP infringement claim over delivered work. Read carefully, since an uncapped indemnity can sit outside your liability cap.
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Indemnification
One party agrees to cover the other's losses from specific third-party claims, such as an IP infringement claim over delivered work. Read carefully, since an uncapped indemnity can sit outside your liability cap.
Each party indemnifies the other against third-party claims arising from its own breach of this agreement, subject to the limitation of liability above.
Decides who pays when a third party sues over the work.
Insurance requirements
States the cover each side must carry, typically professional indemnity and public liability for the agency. Larger clients often require it, so naming your cover up front avoids a scramble at signature.
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Insurance requirements
States the cover each side must carry, typically professional indemnity and public liability for the agency. Larger clients often require it, so naming your cover up front avoids a scramble at signature.
The Agency will maintain professional indemnity insurance of at least the amount stated in Schedule A for the term of this agreement.
Often a condition of working with bigger clients at all.
Confidentiality
Confidentiality
Protects the private information both sides share during the work, from client strategy to your pricing. A mutual clause is fairer and easier to agree than a one-way one that only binds you.
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Confidentiality
Protects the private information both sides share during the work, from client strategy to your pricing. A mutual clause is fairer and easier to agree than a one-way one that only binds you.
Each party will keep the other's confidential information private and use it only to perform this agreement. This obligation survives termination for 3 years.
Protects both sides, and survives the project ending.
NDA reference
Where a separate non-disclosure agreement already exists, this points to it so the two documents do not contradict each other. Tidy housekeeping that saves a painful conflict if a dispute ever arises.
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NDA reference
Where a separate non-disclosure agreement already exists, this points to it so the two documents do not contradict each other. Tidy housekeeping that saves a painful conflict if a dispute ever arises.
Where the parties have signed a separate non-disclosure agreement, that agreement governs confidential information and is incorporated by reference.
Stops two documents quietly contradicting each other.
Term and termination
Term
Sets how long the agreement runs, whether it is a fixed project, a rolling retainer or an annual term that renews. Retainers especially need a clear term so neither side is trapped or surprised by a renewal.
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Term
Sets how long the agreement runs, whether it is a fixed project, a rolling retainer or an annual term that renews. Retainers especially need a clear term so neither side is trapped or surprised by a renewal.
This agreement begins on the start date and continues for the initial term in Schedule A, renewing for successive periods unless either party gives notice.
Defines the runway, and how a retainer renews or ends.
Termination for convenience
Lets either side end the agreement without a reason, on notice. Pair it with a notice period and payment for work done, so a cancellation is orderly rather than a sudden loss of a month's revenue.
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Termination for convenience
Lets either side end the agreement without a reason, on notice. Pair it with a notice period and payment for work done, so a cancellation is orderly rather than a sudden loss of a month's revenue.
Either party may terminate this agreement on 30 days written notice. The Client will pay for all work performed up to the termination date.
Makes an exit orderly, with notice and payment for work done.
Termination for cause
Allows faster termination when one side seriously breaches the agreement and does not fix it. The cure period is the key detail, giving a chance to put things right before the contract ends.
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Termination for cause
Allows faster termination when one side seriously breaches the agreement and does not fix it. The cure period is the key detail, giving a chance to put things right before the contract ends.
Either party may terminate immediately if the other materially breaches this agreement and fails to remedy the breach within 14 days of written notice.
An exit ramp when a relationship has genuinely broken down.
Effect of termination
Spells out what happens on the way out: final invoices, return of materials, which clauses survive. Without it, a clean break turns into an argument over half-finished work and unpaid hours.
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Effect of termination
Spells out what happens on the way out: final invoices, return of materials, which clauses survive. Without it, a clean break turns into an argument over half-finished work and unpaid hours.
On termination, the Client will pay all outstanding fees for work performed. Clauses on confidentiality, IP and liability survive termination.
Turns a messy break-up into a defined handover.
Data and privacy
Data processing
Where you handle personal data on the client's behalf, this sets out how, often as a data processing addendum. It is a legal requirement under GDPR and similar laws, not an optional extra for EU and UK clients.
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Data processing
Where you handle personal data on the client's behalf, this sets out how, often as a data processing addendum. It is a legal requirement under GDPR and similar laws, not an optional extra for EU and UK clients.
Where the Agency processes personal data on the Client's behalf, it does so only on the Client's documented instructions and under the data processing terms in Schedule B.
A legal requirement the moment you touch client personal data.
Data return on termination
Says what happens to the client's data and accounts when the work ends: returned, deleted or handed over. A clear handover protects both sides and signals you run a professional shop.
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Data return on termination
Says what happens to the client's data and accounts when the work ends: returned, deleted or handed over. A clear handover protects both sides and signals you run a professional shop.
On termination, the Agency will return or securely delete the Client's data within 30 days, except where retention is required by law.
A clean data handover protects both reputations.
Breach notification
Commits each side to flagging a security incident quickly. Many privacy laws require notification within tight windows, so agreeing the process in advance avoids panic and finger-pointing in the moment.
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Breach notification
Commits each side to flagging a security incident quickly. Many privacy laws require notification within tight windows, so agreeing the process in advance avoids panic and finger-pointing in the moment.
The Agency will notify the Client without undue delay, and within 72 hours where feasible, of any personal data breach affecting the Client's data.
When an incident hits, the clock is already running.
People
Non-solicitation
Stops the client hiring your staff or contractors directly during the work and for a period after. It protects the team you have invested in, and is far more enforceable than a broad non-compete.
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Non-solicitation
Stops the client hiring your staff or contractors directly during the work and for a period after. It protects the team you have invested in, and is far more enforceable than a broad non-compete.
During the term and for 12 months after, the Client will not directly solicit or hire any Agency staff involved in the work without the Agency's written consent.
Protects the team you trained from being hired out from under you.
Subcontracting
Confirms your right to use trusted freelancers and partners to deliver, while staying responsible for the result. Without it, a client could insist every hour is delivered by your payroll staff.
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Subcontracting
Confirms your right to use trusted freelancers and partners to deliver, while staying responsible for the result. Without it, a client could insist every hour is delivered by your payroll staff.
The Agency may subcontract parts of the work but remains responsible for the deliverables and for any subcontractor's compliance with this agreement.
Keeps your flexible delivery model contractually allowed.
General
Independent contractor
States that you are a supplier, not an employee, so the client cannot later claim an employment relationship with its tax and benefit obligations. Standard, but important to have in writing.
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Independent contractor
States that you are a supplier, not an employee, so the client cannot later claim an employment relationship with its tax and benefit obligations. Standard, but important to have in writing.
The Agency is an independent contractor. Nothing in this agreement creates an employment, partnership or agency relationship between the parties.
Heads off any later claim of an employment relationship.
Governing law
Names which country or state's law applies and where disputes are heard. Easy to overlook until a cross-border dispute arises, at which point it decides how hard and expensive any disagreement becomes.
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Governing law
Names which country or state's law applies and where disputes are heard. Easy to overlook until a cross-border dispute arises, at which point it decides how hard and expensive any disagreement becomes.
This agreement is governed by the laws of the jurisdiction stated in Schedule A, and the parties submit to the exclusive jurisdiction of its courts.
Decides whose law and which courts settle a dispute.
Force majeure
Excuses both sides from obligations they cannot meet because of events outside their control, such as natural disaster or major outage. The pandemic taught every agency why this clause is worth reading.
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Force majeure
Excuses both sides from obligations they cannot meet because of events outside their control, such as natural disaster or major outage. The pandemic taught every agency why this clause is worth reading.
Neither party is liable for delay or failure caused by events beyond its reasonable control. Affected obligations are suspended for the duration of the event.
Protects both sides when the genuinely unforeseeable happens.
How this is calculated
Each clause carries a plain explanation, a short sample of the kind of language used, and a one-line note on why it matters. The samples are illustrative, written to show the shape of a clause, not to be dropped into a contract unedited.
This is a starting point for a better conversation with a lawyer, not a substitute for one. Always have a qualified solicitor review your contracts before you sign.
Sources
- Business Law Section model agreements and clause guidanceAmerican Bar AssociationModel contract and IT-agreement guidance on indemnity, warranty and liability.
- Resource Library: contracts and clausesAssociation of Corporate CounselIn-house counsel clause references on indemnity and limitation of liability.
- Wex Legal EncyclopediaCornell Legal Information InstitutePlain-language definitions of common contract terms.
- IP assignment and licensing guidanceWorld Intellectual Property OrganizationGuidance on the difference between assigning and licensing IP.
Frequently asked
What clauses should an agency contract have?+
At a minimum: scope, payment terms, IP ownership, limitation of liability, confidentiality, termination and governing law. The library groups all 27 into the categories most agency contracts need.
Who owns the work, the agency or the client?+
It depends on the IP clause. Most agency contracts assign ownership to the client on full payment, while the agency keeps pre-existing IP and the right to show the work in its portfolio.
What is a limitation of liability clause?+
It caps how much the agency can be held liable for if something goes wrong, often at the fees paid. It is one of the most negotiated terms in any services contract.
Is this legal advice?+
No. The explanations and samples are educational, written to help you have a sharper conversation with a real lawyer. Always have a qualified solicitor review your contracts before signing.
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