Anatomy of an Interior Design Agreement 2.0

A couple of years ago, I wrote The Anatomy of an Interior Design Agreement.  It became one of my most successful posts.  Today, I am refreshing and revitalizing that post because my interior design agreement has been updated with all that I have learned over the past few years.  Not just what I have learned in my own experiences, but in my fellow designer's experiences as well.

This is the first lesson.  You should be continually updating and revising your interior design agreement.  Each project will be a new lesson and you want to record those lessons in your design agreement.

This article also has a bit of a different perspective than the first.  The first was geared more toward helping clients navigate a design agreement.  This article, 2.0, is for designers to help clarify their interior design agreement.

Which brings me to my second lesson.  You should have a professional look over your interior design agreement.  Hire a lawyer, don't just use a contract you find off the internet.  Your business is special and unique, don't try to protect yourself with someone else's contract.

This is a residential interior design agreement.  I have not done commercial and have no experience with commercial design agreements.

This is a long one already, so let's get into it.

INTERIOR DESIGN AGREEMENT

This Interior Design Agreement is between legal company name (Designer) and client's name (Client) with respect to interior design services to be rendered for full project address (Project) by Designer for Client dated date.

Designer and Client agree as follows:

SCOPE: Designer shall develop interior furnishing specifications that may include coloration, fabrics, lighting, and furnishings as required. Designer’s services do not include contractor services, landscape design, or architecture. Designer shall consult other professionals such as lighting consultants, landscape architects, architects, and others. Client acknowledges that Project deadlines are subject to the vagaries of the marketplace and the performance of third parties.

This is where you want to be as detailed as possible.  This portion is especially important if the client wants to cap the number of hours or if you are NOT charging hourly.  Fixed fee scopes' should be very detailed, spelling out everything that the designer will do and deliver to the client.

DESIGN FEES: Designer shall be compensated on an hourly basis at the rate of$rate per hour.  All hours or partial hours Designer is working on and/or for the Project will be considered design fees. Hourly charges will be invoiced to Client in 10-hour increments and are payable by Client upon receipt of invoice. Upon signing this Agreement, Designer shall receive a non refundable initial advance of $rate, which constitutes the minimum fee due Designer for Design Services. The advance will be credited against hourly fees otherwise payable by Client to Designer for Design Services at completion of project. All Design Fees are non refundable.

How do you charge?  Be exact.  Leave no question, make no assumptions.  This is where disputes happen, so the clearer you can be about how the clients will be charged the more protected and happy everyone will be.

PURCHASING: Purchasing is billed at a rate of $rate per hour. Full deposit is required for each item and only upon receipt of deposit Designer will place order. Designer shall arrange delivery and installation of Designer-purchased furnishings and other items purchased on behalf of the Client for the Project. If available, Client will receive 50% of Designer discount and Designer will receive 50%. When practical, Designer will present specification to Client for Client to purchase direct from vendor. Client is wholly responsible for all items purchased by the Client.

This clause goes into how purchasing works and procurement fees.  Charge different mark-ups? Write them down here.  Again, you need to set up client expectations and lay it out on the table.

REFUNDS & CANCELLATIONS: Once purchased, most items cannot be returned or cancelled, therefore requests to do so will be assessed on a per-item basis with no guarantee of return or cancellation; custom items cannot be cancelled or returned. Requests for returns and cancellations will be billed hourly. Design Fees and reimbursable expenses are non-refundable, even when associated with a return or cancellation.

If you've ever had a client who didn't think the purple sofa would be THAT purple, you know how important this clause is in your contract.  This is also why CFAs (cuttings for approval) are important and getting your clients to sign proposals before purchasing.  In fact, maybe you want to put this clause on your proposals as well.

NO PRICE GUARANTEE: Designer cannot guarantee prices of merchandise, interior installation, or other services not performed by Designer. Vendor pricing is subject to change and out of the control of Designer.

Sometimes clients take a long time to pay for proposals and sometimes prices change.  This clause is really about setting client's expectations.

REIMBURSABLE EXPENSES: Client agrees to reimburse Designer for all out-of-pocket expenses actually incurred by Designer in relation to the Project, including but not limited to, renderings, drafting services, postage and handling, freight, delivery and storage costs. Client shall reimburse Designer for all travel, lodging, and meal expenses incurred by Designer and Designer’s staff (where necessary) in connection with the Project.

More explanations of how you charge and bill.  Gotta put it in there.

PAYMENT: Proposals are due with payment within 3 days.  Invoices for time billing and reimbursable expenses are due within 14 days. Invoices more than 30 days past due will accrue a 10% late fee per month and all work will cease until invoice is paid.  Designer does not accept credit cards.  Designer shall be entitled to withhold delivery of any item purchased on behalf of Client should Client fail to make any payments due to Designer in a timely manner.

You can't expect clients to know how to pay you and when to pay you.  Let them know.  And then tell them what happens when they don't pay.

DRAWINGS: Designer’s drawings are conceptual in nature and are intended to set forth design intent; they are not to be used for architectural or engineering purposes. Designer services do not include modifications to structural, heating, air conditioning, plumbing, electrical, ventilation or other mechanical systems in the Project. Designer shall be held harmless for relying on the accuracy of information provided by the Client.  Project drawings and documents cannot be used by Client for any purpose other than completion of Project by Designer as laid out in this agreement.

Clarity on the purpose of your drawings and how they can be used.

CONTRACTORS & CONSULTANTS: Designer is not a general contractor and does not provide contractor services. If Project requires contractors and/or consultants to perform work based on Designers concepts, Client will enter in a contract directly with each contractor and/or consultant.  Designer provides no warranty, guarantee, certification, or responsibility for the performance, quality, or timely completion of any work performed or materials installed by Contractors, nor their agents or employees.  Designer shall cooperate with and observe Consultants for the purpose of general conformity of the design plan but is not responsible for their oversight.

This clause is important and you should research for your own area.  For example, in Arizona, designers can get in hot water for acting as a contractor, which includes hiring and scheduling subcontractors.  Hiring and scheduling an electrician to hang chandelier, possible trouble.  Hiring and scheduling the tile layer for the kitchen backsplash, possible trouble.  The water is murky and a lawyer can help you navigate these waters.

PERMITS: Client is responsible for permitting and or any and all approvals and compliance required by any governmental agency.

If you need permits, you probably need a general contractor or architect, who should help the homeowner with the proper permits.

INSURANCE: Client is required to have insurance coverage for all furnishings and materials during handling, moving, storage, and installation. Client is responsible for ensuring that their insurance coverage is sufficient per this Agreement. Designer cannot be held responsible to inadequate insurance coverage.

Not only should the client be insured, but the designer needs to be insured as well.  Do not work without insurance.  Especially on large jobs you want to make sure that there is sufficient coverage for the project.

PHOTOGRAPHS &PUBLICITY: Client agrees to allow Designer and/or Designer's representatives to photograph Project during all stages of Design Services including when project is complete. Photographs will be used for business purposes, including, but not limited to: press, publications, online, social media, marketing, advertising, and print. Designer will not disclose address or Client’s name without prior consent.  Costs of photographs and publicity are the responsibility of the Designer.  Additionally, if Client or Client's agents document the Project, Designer shall be given credit as the designers if documentation is released publicly.

This can be a touchy clause because you really don't want to force yourself into someone's home if they don't want you to take photos.  That said, when you put this in your contract in the beginning it sets up client expectations and lets them know that you will be photographing for the duration of the project.

HAVE FUN: Capella Kincheloe Interior Design strives for the most comfortable, enjoyable, and transparent design experience possible. We require open communication and honest feedback.

I put this in my interior design agreement as a reminder that despite the serious nature of the agreement, interior design should be fun.

FAQS & POLICIES: I have read, understand and agree to the policies outlined in the document FAQs & POLICIES.

I've essentially split my contract into two parts.  The agreement and FAQs & Policies.  This makes the contract less daunting, but still includes all the important information.  I believe an informed client is a happier client.

TERMINATION: Designer or Client can terminate this agreement by notifying the other party in writing. Client will be responsible for any outstanding reimbursable charges and hourly fees. All in-process proposals and orders will be completed by Designer and delivered to Client at hourly rate. If a balance remains in Client’s account, the amount will be refunded less any outstanding reimbursable charges or design fees. Client agrees to take no action which is intended, or would reasonably be expected, to harm the Designer’s reputation or which would reasonably be expected to lead to unwanted or unfavorable publicity to the Designer.

Let the client know how to get out of the agreement.

LIMITATION OF LIABILITY: Neither the Designer, Designer’s Consultants, nor their agents or employees shall be jointly or individually liable to the Owner for an amount in excess of the proceeds of the available professional liability insurance coverage.

General limitation of liability clause, talk to your lawyer about what is right for your business.

DISPUTES: All disputes arising from this Agreement shall be resolved by binding private arbitration in Maricopa County, Arizona with each party to bear its own fees and costs. This agreement is governed by Arizona law.

This clause keeps disputes from escalating to a lawsuit, but arbitration isn't always the best solution in every location. Talk to your lawyer.

TERMS: The parties agree that the terms of this Agreement may be changed only by a writing signed by both parties and that no oral changes or waivers are permitted.

INTERIOR DESIGN AGREEMENT FAQS & POLICIES

This section is based on actual questions I have received from clients.  Your section may be similar or very different.  The important thing is to cater it to your clients and your business.  You can also just include this in your interior design agreement.

CAN I SHOP ON MY OWN? You have hired me to design and complete a vision for your space and I ask that you do not select or purchase items because that selection may not be a fit for the design, space, or budget. You will receive a detailed Specification for items to be purchased direct.

WHAT ADDITIONAL COSTS CAN I EXPECT? I do my best to give you a full cost outlook of each item, but additional costs such as storage, shipping, installation, or unexpected labor do occasionally happen. For a very detailed explanation of possible hidden costs read: The Hidden Costs of Interior Design

DO YOU WORK WITH CONTRACTORS? I work with the contractors hired by the client. I love working with other design professionals to create your custom space. I prefer to use professionals that I have worked with on previous projects and can provide recommendations when necessary. CKID does not provide contractor services; so independent architects and contractors hired by the client are an integral part of the process.

HOW LONG DO PROJECTS NORMALLY LAST? This depends on the scope of the project and what is purchased. Occasionally there are delays caused by weather, vendor vacations, factory errors, and other unpredictable influences, that are out of my control. The client as well as all professionals hired to work on the project are expected to not cause unreasonable delays in the project.

HOW DO I PLACE AN ORDER? Once you receive a Proposal you have 3 days to either accept or decline the item. For acceptance, a signed copy of the proposal or approval on Studio Projects along with full payment is required to place an order.  No item will be ordered by Designer until Designer receives signed proposal and full payment.

CAN I CHANGE MY MIND AFTER AN ORDER IS PLACED? Most often orders cannot be cancelled or refunded. In the event that a full refund can be attained you may cancel the order and receive a refund for the cost of the item minus the purchasing fee and any other applicable fees. You will be charged hourly for the time spent on cancelled orders. Custom orders are non refundable.

WHEN ARE PAYMENTS DUE? Proposals are due with payment within 3 days. Invoices for time billing and reimbursable expenses are due within 14 days. Invoices more than 30 days past due will accrue a 10% late fee per month and all work will cease until invoice is paid.

WHAT IF I DECIDE MID-PROJECT I WANT TO ADD MORE TO THE SCOPE? Since I work hourly, increasing the scope is not a problem.

WHAT IF I HAVE CONCERNS ABOUT AN ITEM? Please bring these to my attention immediately and we will discuss your concerns and if necessary, find a more desirable solution.  The decision about what is purchased and installed in your home is ultimately yours.

WHAT ABOUT BUDGET? We can work within your budget, whether you are looking for a completely custom masterpiece or more along the lines of Pottery Barn or a mix of the two. Having a budget is very important for the project running smoothly and for your expectations to be met.

WHAT IS THE DIFFERENCE BETWEEN A SPECIFICATION & PROPOSAL? A Specification is a document that I provide the details for you to purchase an item yourself. You will pay the vendor directly. A Proposal is a document where I am requesting payment for items so that I can purchase the item on your behalf. Proposals are payable to Capella Kincheloe Interior Design.

HOW ARE ITEMS DELIVERED? Our policy is to perform one large installation of all your items. This includes all furniture and accessories purchased. Items purchased by Capella Kincheloe Interior Design go into a licensed, bonded, insured and climate-controlled warehouse awaiting installation. It it our policy to not deliver items to client’s homes directly or in multiple trips. Clients are responsible for all shipping, storage, & delivery fees.

ADDITIONAL TERMS

Here are some additional terms that you may want to include in your interior design agreement, again, talk to a legal professional to determine if these are right for you and your business.

  • Indemnity
  • Site Visit Limitations
  • Consequential Damages
  • Fees for Project Delays / Agreement Expiration
  • Revision Limitations
  • Hourly Fee for Employees (Sr. Designer, Jr. Designer, Draftsman, Etc)
  • Project Access
  • Jobsite Safety
  • Ownership of Design - Designer shall retain ownership of the design, including but not limited to: drawings, renderings, sketches, samples, and other materials prepared by Designer for the Project.  Ownership shall include copyrights, trademarks, patents, intellectual property, or other proprietary rights existing in design.  Client shall not share or use design for additions to Project or any other project without explicit written permission of Designer.

Additional Resources:

The Interior Design Business Handbook

Business and Legal Forms for Interior Designers

The Golden Blueprint: Business Training Course for Interior Designers

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