A retainer contract is an employment agreement based on set hours and predetermined rates. It’s needed when a client wants to hire an independent contractor or freelancer for a set amount of hours, usually per month. The service provider will always be paid the agreed hours, whether or not they are fully met by the end date of the retainer contract.
If you plan on having more than one client, you’ll also want to set up a retainer agreement template. This is basically a draft version of your retainer agreement and preloaded with all the terms and conditions that are your must-haves for every job.
Note: Need a retainer contract now? Sign up today with Bonsai and start creating your own personal retainer agreement template for free.
Where a retainer agreement or contract can be for any specified date, a monthly retainer contract is for a set amount of hours over a period of a month's time. This allows a lot of flexibility for both parties, as every month can be renegotiated and the set hours can be changed based on the projects involved.
Whether you’re a graphic design retainer or a consultant retainer, a monthly contract is perfect when you want flexibility with security on a short-term basis.
A monthly retainer contract is going to benefit you for five main reasons:
Because you’re being contracted to work a set amount of hours and being paid a set amount each month, there’s a lot of flexibility involved with your monthly retainer arrangement. The client is guaranteed the independent contractors time and skills, while the independent contractor is guaranteed cash flow.
A monthly agreement of this type is fundamental in establishing communication and outlining key tasks and projects needed to be completed. Because the client has to be aware of the projects at hand each month, communicating with the independent contractor becomes easy and efficient. This will help to eliminate any conflict and misunderstandings while helping to secure your partnership together for the future.
Also, because of the nature of a monthly retainer agreement, a new one will have to be regularly negotiated. If you plan on having a freelancing career, knowing how to negotiate is going to be a key skill to master. By doing it each month, you’ll be consistently honing and improving this skill.
All your retainer agreements will need a section that outlines the work and services you provide. The descriptions of the work may change with every monthly retainer agreement, so it’s important to be as detailed as possible and only list key responsibilities that apply for that month.
No retainer wants to jeopardize their future work with a client, so being clear and detailed about your responsibilities will also have you meeting deadlines and keeping your client happy.
Give a timeline or scope of delivery for all tasks and projects for the month — both parties will need to decide what these are to determine any deadlines. The client can use this to plan the retainer model for any future work they’ll need to do.
This section will outline what the client pays and when. This can include your retainer or monthly fee, your hourly rate if you go over the set amount of hours, the advance payment, any reasonable attorneys fees that you may have to pay, and any other expenses incurred.
You and your client may want to come to an agreement on any performance-related payments, which can work as an incentive to get the work completed faster.
It’s always a good idea to include a section on any intellectual property and copyright pertaining to the work you produce. This can include permission to use the work for your portfolio after it’s completed and handed over.
Any non-disclosure agreements (NDA’s) and non-compete clauses will need to be included here. These are important for both parties so that any confidential information, such as personal details or social security numbers are legally protected to remain private.
Depending on the state or country you’re in, you should always seek legal advice for any applicable or governing laws that may affect an NDA or non-compete agreement.
Even a monthly retainer agreement needs a termination clause. This will usually become effective on a specific date and is agreed upon by the two parties involved. The termination of this agreement isn’t always the end of your working relationship together, however, for legal reasons you’ll need to end the contract after the month is up.
You should also include any reasons why the contract may terminate early, and if written notice is needed.
Determining any other factors involved will always be dependent on the type of work you do and the project involved. This could be around access to tools, liability waivers, or even a specific section around expenses incurred — anything you believe to be necessary to protect your rights.
There's a lot of paperwork that goes into creating your own retainer agreement template. There's time, effort, and even legal fees involved to make sure it's a verified contract. With Bonsai’s retainer agreement template, all the necessary information is there, right off the bat, for retainers to get a fair agreement. It’s also completely vetted by other professionals and legal experts, so you won’t have to spend additional money legally verifying your contract.
Choose our specialized contract template, or start with a blank template. Add your client name, project name, preferred currency.
Next, fill in your basic information. This includes your location (country and state/province), your legal entity (if you operate via an LLC), and your client’s legal name (company or person), and contact details.
Describe the scope of work in as much detail as possible. You can also attach a separate statement of work file here if you wish.
Determine how, and how much, your client will pay you for your services here. You can choose from a flat fee, milestone payments, or hourly, daily, weekly, monthly or per-word rates.
You can also outline payment terms (net 15 days for invoices, for example), late fees, and contract start and end dates here.
You’re ready to review your fully fleshed-out and vetted retainer agreement. If you want to make any edits to the template, you can do it at this stage.
And if you’re happy with the finished contract, you can click “SIGN CONTRACT” to e-sign it with legally binding electronic signatures from both parties.
As we said, it’s simple! Now you can return to your Freelance Dashboard to track when the contract has been delivered, opened, and signed.
Below you can find our retainer agreement sample, which will give you an example of what the document will look like.
Note: Ready to create your own retainer contract? Sign up and get started with Bonsai today!
Being on a monthly retainer means a client will pay you advanced monthly payments. This is to ensure they acquire your services for future use.
Try Bonsai's free professional monthly retainer contract templates to kickstart a client relationship. Our templates are easily customizable, look professional, and are reviewed by lawyers (so you'll be covered).
A retainer fee is simply an amount of money that an independent contractor will charge their client upfront. It’s an advance payment that helps to secure the services of the retainer for the client. It’s separate from the total amount charged at the end of the contract or project, and in some cases, partially refunded if the services end up costing less.
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This Contract is between Client (the "Client") and Acme LLC (the "Contractor").
The Contract is dated [DATE BOTH PARTIES SIGN].
1.1 Project. The Client is hiring the Contractor to do the following: [PROJECT SCOPE].
1.2 Schedule. The Contractor will begin work on [START DATE] and will continue until the Contract is ended. This Contract can be ended by either Client or Contractor at any time, pursuant to the terms of Section 6, Term and Termination.
1.3 Hours. The Contractor will work up to [HOURS] hours per month. The Contractor will stop working each period if and when those hours are used up. Unused hours do not carry over to the next period. The Contractor will be available to the Client from 9:00 AM to 5:00 PM, Monday through Friday. The Contractor may agree to be available outside of those hours, but any work that is required to be done outside of those that the Client and Contractor explicitly agree to do will be billed separately at a rate of [OVERAGE RATE] (USD) per hour.
1.4 Payment. The Client will pay the Contractor an ongoing rate of [PROJECT RATE] per month. Of this, the Client will pay the Contractor a non-refundable deposit of [DEPOSIT AMOUNT] before work begins, to be deducted from the first invoice payment. This deposit is non-refundable due to the Contractor reserving their schedule on behalf of the Client.
1.5 Expenses. The Contractor may request additional payment for any agreed-upon, non-cancellable expenses, which must approved by the Client in advance.
1.6 Invoices. The Contractor will invoice the Client [INVOICE FREQUENCY]. The Client agrees to pay the amount owed within [X DAYS TO PAY] days of receiving an invoice. Payment after that date will incur a late fee of [LATE FEE PERCENTAGE] % per month on the outstanding amount.
1.7 Support. The Contractor will not provide support for any deliverable or once the Client accepts it, unless otherwise agreed in writing.
2.1 Client Owns All Work Product. As part of this job, the Contractor is creating "work product" for the Client. To avoid confusion, work product is the finished product, as well as drafts, notes, materials, mockups, hardware, designs, inventions, patents, code, emails, email content and anything else that the Contractor creates as part of this project. The Contractor hereby gives the Client this work product once the Client pays for it in full. This means the Contractor is giving the Client all of its rights, titles, and interests in and to the work product (including intellectual property rights), and the Client will be the sole owner of it. The Client can use the work product however it wants or it can decide not to use the work product at all. The Client, for example, can modify, destroy, or sell it, as it sees fit.
2.2 Contractor's Use Of Work Product. Once the Contractor gives the work product to the Client, the Contractor does not have any rights to it, except those that the Client explicitly gives the Contractor here. The Client gives permission to use the work product as part of portfolios and websites, in galleries, and in other media, so long as it is to showcase the work and not for any other purpose. The Client does not give permission to sell or otherwise use the work product to make money or for any other commercial use. The Client is not allowed to take back this license, even after the Contract ends.
2.3 Contractor's Help Securing Ownership. In the future, the Client may need the Contractor's help to show that the Client owns the work product or to complete the transfer. The Contractor agrees to help with that. For example, the Contractor may have to sign a patent application. The Client will pay any required expenses for this. If the Client can't find the Contractor, the Contractor agrees that the Client can act on the Contractor's behalf to accomplish the same thing. The following language gives the Client that right: if the Client can't find the Contractor after spending reasonable effort trying to do so, the Contractor hereby irrevocably designates and appoints the Client as the Contractor's agent and attorney-in-fact, which appointment is coupled with an interest, to act for the Contractor and on the Contractor's behalf to execute, verify, and file the required documents and to take any other legal action to accomplish the purposes of paragraph 2.1 (Client Owns All Work Product).
2.4 Contractor's IP That Is Not Work Product. During the course of this project, the Contractor might use intellectual property that the Contractor owns or has licensed from a third party, but that does not qualify as "work product." This is called "background IP." Possible examples of background IP are pre-existing marketing strategies, code, type fonts, properly-licensed stock photos, proprietary marketing practices and web application tools.
The Contractor is not giving the Client this background IP. But, as part of the Contract, the Contractor is giving the Client a right to use and license (with the right to sublicense) the background IP to develop, market, sell, and support the Client's products and services. The Client may use this background IP worldwide and free of charge, but it cannot transfer its rights to the background IP (except as allowed in Section 11.1 (Assignment)). The Client cannot sell or license the background IP separately from its products or services. The Contractor cannot take back this grant, and this grant does not end when the Contract is over.
2.5 Contractor's Right To Use Client IP. The Contractor may need to use the Client's intellectual property to do its job. For example, if the Client is hiring the Contractor to build a website, the Contractor may have to use the Client's logo. The Client agrees to let the Contractor use the Client's intellectual property and other intellectual property that the Client controls to the extent reasonably necessary to do the Contractor's job. Beyond that, the Client is not giving the Contractor any intellectual property rights, unless specifically stated otherwise in this Contract.
The Contractor won't work for a competitor of the Client until this Contract ends. To avoid confusion, a competitor is any third party that develops, manufactures, promotes, sells, licenses, distributes, or provides products or services that are substantially similar to the Client's products or services. A competitor is also a third party that plans to do any of those things. The one exception to this restriction is if the Contractor asks for permission beforehand and the Client agrees to it in writing. If the Contractor uses employees or subcontractors, the Contractor must make sure they follow the obligations in this paragraph, as well.
Until this Contract ends, the Contractor won't: (a) encourage Client employees or service providers to stop working for the Client; (b) encourage Client customers or clients to stop doing business with the Client; or (c) hire anyone who worked for the Client over the 12-month period before the Contract ended.
The one exception is if the Contractor puts out a general ad and someone who happened to work for the Client responds. In that case, the Contractor may hire that candidate.
5.1 Overview. This section contains important promises between the parties.
5.2 Authority To Sign. Each party promises to the other party that it has the authority to enter into this Contract and to perform all of its obligations under this Contract.
5.3 Contractor Has Right To Give Client Work Product. The Contractor promises that it owns the work product, that the Contractor is able to give the work product to the Client, and that no other party will claim that it owns the work product. If the Contractor uses employees or subcontractors, the Contractor also promises that these employees and subcontractors have signed contracts with the Contractor giving the Contractor any rights that the employees or subcontractors have related to the Contractor's background IP and work product.
5.4 Contractor Will Comply With Laws. The Contractor promises that the manner it does this job, its work product, and any background IP it uses comply with applicable laws and regulations.
5.5 Work Product Does Not Infringe. The Contractor promises that its work product does not and will not infringe on someone else's intellectual property rights, that the Contractor has the right to let the Client use the background IP, and that this Contract does not and will not violate any contract that the Contractor has entered into or will enter into with someone else.
5.6 Client Will Review Work. The Client promises to review the work product, to be reasonably available to the Contractor if the Contractor has questions regarding this project, and to provide timely feedback and decisions.
5.7 Client-Supplied Material Does Not Infringe. If the Client provides the Contractor with material to incorporate into the work product, the Client promises that this material does not infringe on someone else's intellectual property rights.
This Contract is ongoing, until ended by the Client or the Contractor. Either party may end this Contract for any reason by sending an email or letter to the other party, informing the recipient that the sender is ending the Contract. The party that is ending the Contract must provide notice by taking the steps explained in Section 11.4, Notices. The Contractor must immediately stop working as soon as the notice has been given, unless the notice says otherwise. The Client will pay the Contractor for the work done up until when the Contract ends and will reimburse the Contractor for any agreed-upon, non-cancellable expenses. The following sections don't end even after the Contract ends: 2 (Ownership and Licenses); 3 (Competitive Engagements); 4 (Non-Solicitation); 5 (Representations); 8 (Confidential Information); 9 (Limitation of Liability); 10 (Indemnity); and 11 (General).
The Client is hiring the Contractor as an independent contractor. The following statements accurately reflect their relationship:
8.1 Overview. This Contract imposes special restrictions on how the Client and the Contractor must handle confidential information. These obligations are explained in this section.
8.3 Third-Party Confidential Information. It's possible the Client and the Contractor each have access to confidential information that belongs to third parties. The Client and the Contractor each promise that it will not share with the other party confidential information that belongs to third parties, unless it is allowed to do so. If the Client or the Contractor is allowed to share confidential information with the other party and does so, the sharing party promises to tell the other party in writing of any special restrictions regarding that information.
Neither party is liable for breach-of-contract damages that the breaching party could not reasonably have foreseen when it entered this Contract.
10.1 Overview. This section transfers certain risks between the parties if a third party sues or goes after the Client or the Contractor or both. For example, if the Client gets sued for something that the Contractor did, then the Contractor may promise to come to the Client's defense or to reimburse the Client for any losses.
10.2 Client Indemnity. In this Contract, the Contractor agrees to indemnify the Client (and its affiliates and their directors, officers, employees, and agents) from and against all liabilities, losses, damages, and expenses (including reasonable attorneys' fees) related to a third-party claim or proceeding arising out of: (i) the work the Contractor has done under this Contract; (ii) a breach by the Contractor of its obligations under this Contract; or (iii) a breach by the Contractor of the promises it is making in Section 5 (Representations).
10.3 Contractor Indemnity. In this Contract, the Client agrees to indemnify the Contractor (and its affiliates and their directors, officers, employees, and agents) from and against liabilities, losses, damages, and expenses (including reasonable attorneys' fees) related to a third-party claim or proceeding arising out of a breach by the Client of its obligations under this Contract.
11.1 Assignment. This Contract applies only to the Client and the Contractor. The Contractor cannot assign its rights or delegate its obligations under this Contract to a third-party (other than by will or intestate), without first receiving the Client's written permission. In contrast, the Client may assign its rights and delegate its obligations under this Contract without the Contractor's permission. This is necessary in case, for example, another Client buys out the Client or if the Client decides to sell the work product that results from this Contract.
11.2 Arbitration. As the exclusive means of initiating adversarial proceedings to resolve any dispute arising under this Contract, a party may demand that the dispute be resolved by arbitration administered by the American Arbitration Association in accordance with its commercial arbitration rules.
11.3 Modification; Waiver. To change anything in this Contract, the Client and the Contractor must agree to that change in writing and sign a document showing their contract. Neither party can waive its rights under this Contract or release the other party from its obligations under this Contract, unless the waiving party acknowledges it is doing so in writing and signs a document that says so.
11.4 Notices.
(a) Over the course of this Contract, one party may need to send a notice to the other party. For the notice to be valid, it must be in writing and delivered in one of the following ways: personal delivery, email, or certified or registered mail (postage prepaid, return receipt requested). The notice must be delivered to the party's address listed at the end of this Contract or to another address that the party has provided in writing as an appropriate address to receive notice.
(b) The timing of when a notice is received can be very important. To avoid confusion, a valid notice is considered received as follows: (i) if delivered personally, it is considered received immediately; (ii) if delivered by email, it is considered received upon acknowledgement of receipt; (iii) if delivered by registered or certified mail (postage prepaid, return receipt requested), it is considered received upon receipt as indicated by the date on the signed receipt. If a party refuses to accept notice or if notice cannot be delivered because of a change in address for which no notice was given, then it is considered received when the notice is rejected or unable to be delivered. If the notice is received after 5:00pm on a business day at the location specified in the address for that party, or on a day that is not a business day, then the notice is considered received at 9:00am on the next business day.
11.5 Severability. This section deals with what happens if a portion of the Contract is found to be unenforceable. If that's the case, the unenforceable portion will be changed to the minimum extent necessary to make it enforceable, unless that change is not permitted by law, in which case the portion will be disregarded. If any portion of the Contract is changed or disregarded because it is unenforceable, the rest of the Contract is still enforceable.
11.6 Signatures. The Client and the Contractor may sign this document using online e-signature software such as Bonsai. These electronic signatures count as originals for all intents and purposes.
11.7 Governing Law. The validity, interpretation, construction and performance of this document shall be governed by the laws of the United States of America.
11.8 Entire Contract. This Contract represents the parties' final and complete understanding of this job and the subject matter discussed in this Contract. This Contract supersedes all other contracts (both written and oral) between the parties.
THE PARTIES HERETO AGREE TO THE FOREGOING AS EVIDENCED BY THEIR SIGNATURES BELOW.
