If you are reading this article, you may be a new coach who wants to start your practice legally. Or, you have been coaching for some time now and realize that the contract you have been using will not just cut it.
Your clients ghosted you.
Or, you had clients who just refused to pay.
Or, you have a client constantly stirring trouble in your groups and want to kick her out.
Or, probably, you want to scale and start getting clients from other parts of the world, and you simply don’t know if your locally drafted contract will cut it.
Whatever your reason, you know you need to protect your business and investment. And you know that a coaching contract does exactly this.
So today, let me tackle everything about coaching contracts, and hopefully, you can apply what you have learned to your business.
Who am I anyway, and why you should read on:
I am Vena Verga-Danemar, an Onlinepreneur Legal Strategist. I am both a licensed lawyer and an Online Business Owner.
I helped dozens of my students legally start and grow their coaching business using a simplified strategy that doesn’t require spending all your time on your business 24/7.
To guide you in this Article, here are the things I will discuss:
WHY DO YOU NEED A COACHING CONTRACT ANYWAY?
Contracts serve as your roadmap to determine the path you and your fellow driver will traverse. It states exactly what will happen in your relationship if certain things occur. For example, someone gets sick and needs to postpone a coaching session. What happens if the client fails to pay or keeps on arriving late?
And because it is a roadmap, coaching contracts build trust. You and your client know that there will be no surprises. This certainty removes the drama.
I’ve seen it over and over again –
Friends who started a coaching relationship but ended up worst enemies.
Or clients blaming a coach for not reaching a promised result.
Or nightmare clients who lodge a chargeback or a refund despite knowing you don’t give any refunds.
You see, like all relationships, you need to set boundaries; this is exactly what a coaching contract does. You can set your terms early on, and most importantly, you set it without emotional entanglements.
Compare these two scenarios:
You have a client who is always late.
With a properly drafted contract with a waiting policy, you can say, “Hey, Ana, according to our contract, I only have a 15-minute waiting policy. If you arrive late, I can cancel the session without a refund. Our session is at 3:00. And it is now 3:30. We agreed that in this situation, I can forfeit the session and the amount paid.”
A long, dramatic conversation about respecting one’s time can be interpreted negatively by your client.
The first example is direct and factual, without any drama. It avoids awkward conversations.
And it is neither one-sided because a good coaching contract protects you and your client.
So you see, a written client agreement, either a one-on-one coaching contract, a group coaching contract, or even a service agreement, is key to protecting your business and investment both in money and time. It protects your current income and also the future of your business.
When you are running a business, it is necessary for you to feel safe and secure. And having a legal contract does exactly this.
When the terms of the relationship are spelled out, there is no room for drama or interpretation. And most importantly, it saves you time having to dig through your emails or your brain trying to remember what you agreed upon.
Having a contract protects you from your clients and third parties as well.
For example, in the case of a chargeback. It would be best to show Stripe or Paypal that you have a clear agreement with your client and that your client is not following what was agreed upon. It helps these third parties decide the chargeback on your favor. WHAT SHOULD BE THE CONTENTS OF YOUR COACHING CONTRACT?
Now that you know how important a coaching contract is, the next question is, what should be its contents?
The answer will differ if you ask a lawyer with no experience dealing with online coaching clients and one who is immersed in this industry.
You see, lawyers are like doctors. We have our specialties. You really wouldn’t want a dermatologist to operate on your heart, do you?
It’s the same thing with lawyers. Not every lawyer has the knowledge and experience drafting contracts for online businesses, much more online coaching businesses. Why?
Simply because this industry has many nuances that are unknown to general practitioners.
Let me give you an example – Chargeback.
Do you know that the greatest threat to coaches, online coaches in particular, is not that they will be dragged into court cases? No. It is chargebacks.
General practitioners do not know this and would draft a contract that is focused on court litigation.
Therefore, it is best to go to a lawyer with experience dealing with online business and coaches in particular.
Otherwise, you might find yourself in the same shoes as my client.
She asked someone to draft her a contract and website policies. Barely a month after she was using her contract, a client of hers filed a chargeback, and she didn’t know what to do because her contract did not contain any provision for chargeback, and neither was it explained to her by the lawyer who drafted it. She had to hire me to look into her contracts and her policies. She paid double!
So, what can we learn from this?
Whoever is helping you should have experience dealing with coaches in your industry. A generalist will not suffice. You need to have a contract that fits your situation, risk, and exposure, which will differ. You cannot depend on templates as well because you need to customize these templates, considering your situation.
That being said, your contract should have the following provisions:
1. Provisions introducing the parties and the purpose of the agreement.
2. A detailed scope of service
3. Agreement on schedule, communication, cancellations and refunds
4. Payment terms
6. Provision on Intellectual Property rights
7. Guarantees and waivers
8. Boiler Plate provisions
WHEN SHOULD YOU HAVE A COACHING CONTRACT?
You need to have a coaching contract in place before you ask for payment and before starting any sessions.
This is important to remember because if you ask to be paid first before sending the contract, then there is a possibility that your client will not agree. Likewise, you need to prove that the client accepted your terms. Signing the contract is one proof. Sending you payment after seeing the contract can also be evidence of acceptance.
HOW DO YOU ENFORCE A COACHING CONTRACT
For a contract to be enforceable, it needs to be properly signed.
When we talk about enforcement, it just means that you invoke the contract's provisions when the other party violates them.
For example, if your client fails to pay, you can give a grace period according to your contract and, after that, impose penalties according to your terms.
Here is my tip: always open the lines of communication with your client. Before taking drastic measures, try to settle issues amicably. This is always better than going to court or arbitration because nobody wins in these situations.
A good contract will always have a provision on how conflict is resolved. Explore this provision and utilize it to settle your differences amicably.
CAN YOU HAVE A SHORT CONTRACT
OK, so this question is always asked by my clients. Often, they go to me insisting that I make a one-pager contract because they are afraid to scare their clients away.
Here is the reality: A client who is serious about your services will never be afraid of signing a contract, no matter how long it is.
On the other hand, clients who are not so serious and who are planning to ask for a refund after trying your services are often the ones who are afraid of signing tight contracts because they know they can't easily get out of it. So, use your contract to qualify your contracts. This is one way to get quality clients you love to work with. Check out this Podcast Episode to learn more about this topic.
FREE RESOURCE FOR YOU
So, you want to build a coaching practice that supports your lifestyle? Check out this Legally Fluent® E-MAP Checklist on creating a practice to create leads and sales worldwide. You can access the checklist here.