You have a contract. You send it to every client before you start work. You feel covered. But here is the question worth asking before the financial year wraps up: is your contract actually doing its job?

Because having a contract and having a contract that protects you are two very different things.

A contract full of gaps, vague language, or missing clauses is not protection. It is a false sense of security. And the gaps only become obvious when something goes wrong — a client disputes your invoice, demands a twelfth round of revisions, or ghosts you halfway through a project.

EOFY is the right time to run a quick audit. Here are the five things your contract needs to actually work for you.

Table of Contents

• The difference between having a contract and having one that works
• Scope of work: the clause that stops scope creep
• Payment terms: why 'due on completion' is not a payment term
• Revision caps: protecting your time and your sanity
• IP ownership: who owns what you create
• Termination clause: your clean exit when things go sideways
• The EOFY audit: what to do if your contract has gaps

The Difference Between Having a Contract and Having One That Works

Most business owners know they need a contract. The problem is not the intention. It is the execution.

A contract drafted years ago for a different version of your business. A free template downloaded from a generic website. A document that covers the basics but skips the clauses that actually come up in disputes. All of these feel like protection. None of them necessarily are.

The clauses that matter are the ones that answer the hard questions before the relationship turns difficult. What is included in this project? What is not? When does the client pay? What happens if they ask for more? Who owns the final work? And what happens if either of you wants out?

If your contract does not answer those questions clearly, it is leaving money on the table and stress in your future. Let us go through them one by one.

Scope of Work: The Clause That Stops Scope Creep

Vague scope is the number one cause of contract disputes for service-based businesses. And it is almost always preventable.

When your contract says something like 'design services as discussed' or 'social media management', you have handed the client the power to define what that means. And clients, with the best intentions in the world, often define it broadly. Very broadly.

Scope creep looks like this: you are hired to design a logo. The client then asks for business card concepts. Then a colour palette. Then a quick look at their website header. Each individual ask feels small. Cumulatively, you have done twice the work you quoted.

A strong scope of work clause names exactly what is included, and equally importantly, what is not. It specifies deliverables, not just a category of work. It sets a process for requesting work outside scope and what that costs. And it gives you something to point to when the project starts expanding without the budget following.

If your contract currently says 'as discussed', that is the first thing to fix.

Payment Terms: Why 'Due on Completion' Is Not a Payment Term

'Payment due on completion' sounds reasonable. In practice, it is a cash flow problem waiting to happen.

Who defines completion? The client does, until you have a contract that says otherwise. A client who is unhappy, slow to respond, or simply holding out can delay 'completion' indefinitely, and your invoice along with it.

A contract that actually protects you on payment sets out:

• A deposit amount, due before work begins (typically 30 to 50 per cent)
• A specific payment schedule tied to milestones, not just 'completion'
• Exact due dates, '7 days from invoice', not 'on completion'
• Late payment consequences, including interest or the right to pause work
• What happens to deliverables if final payment is not received

That last one matters more than most people realise. If your contract does not say you retain ownership of deliverables until final payment is made, a client could technically use your work without paying the final invoice. The ACCC's guidance on consumer guarantees for services is useful context here, but your contract is what governs the commercial relationship.

A payment clause with teeth changes the dynamic. It sets expectations upfront, and it gives you options when they are not met.

Revision Caps: Protecting Your Time and Your Sanity

Unlimited revisions is not a service offering. It is a trap.

It might feel generous when you write it. In reality, 'unlimited revisions' means the project never ends until the client decides it does. And some clients never quite decide.

Revision cycles without a cap erode your profitability, extend your timelines, and create resentment on both sides. The client feels like they can keep pushing. You feel like you are being taken advantage of. Neither of you ends up happy.

A revision clause should specify:

• How many rounds of revisions are included in the quoted price
• What counts as a revision (minor tweaks) versus a new direction (additional fee)
• The process for requesting revisions
• What additional revisions cost if the included rounds are exceeded

Being clear about revisions is not about being difficult. It is about being professional. Clients who understand the scope of what they have paid for are better clients. And you get to deliver great work without running at a loss.

IP Ownership: Who Owns What You Create

This is the clause most people skip over and then deeply regret.

When you create something for a client, who owns it? The answer is not obvious. And under Australian copyright law, it is not always the person who paid for it.

Generally, the creator of original work owns the copyright unless they have assigned it in writing. That means if your contract is silent on IP, you may retain ownership of work a client believes they have fully paid for and owns outright. Cue the dispute.

There are two main ways to deal with IP in a contract:

Licence

You retain ownership of the intellectual property, but grant the client the right to use it. You can specify the scope of that licence (exclusive or non-exclusive, the territory, the purpose, and whether it is time-limited). This is common for photographers, designers, and content creators who want to retain a portfolio or resell assets.

Assignment

You transfer ownership of the IP to the client. Once assigned, you no longer own it. This is often what clients expect when they commission custom work, but it should be documented clearly in writing with any conditions attached (like final payment being received first).

Neither approach is wrong. But leaving the question unanswered is. An IP clause that clearly states who owns what, under what conditions, and when that ownership transfers removes ambiguity and protects both parties.

The above can all be addressed within our services agreement.

Termination Clause: Your Clean Exit When Things Go Sideways

Clients go quiet. Projects fall apart. Sometimes you need to walk away. Without a termination clause, you have no clear path for doing that.

A missing or weak termination clause means that when a client stops responding to your emails, you are stuck in a grey zone. Are they ending the project? Are you still technically working on it? Are you entitled to payment for what you have done so far? The answers are not obvious without a contract that addresses it.

A strong termination clause covers:

• How either party can end the contract (written notice, timeframe)
• What happens to payment for work already completed
• Whether a kill fee applies if the client terminates without cause
• What happens to deliverables on termination (who retains what)
• What triggers the right to terminate immediately, like non-payment or a breach

The termination clause is the one you hope never to use. But when you need it, you really need it. A client who has gone quiet for six weeks while your invoice sits unpaid is a situation your contract should have a clear answer for.

The EOFY Audit: What to Do If Your Contract Has Gaps

The new financial year is the ideal time to look at what you are working with and make sure it still fits your business. That means asking:

• Does my contract reflect how my business actually operates now, the services I offer, the way I work, and the clients I take on?
• Are my payment terms specific enough? Do I have a deposit, a schedule, and consequences for late payment?
• Does my contract cap revisions? Or does it leave that open?
• Is IP ownership clearly addressed? Does the client know what they are getting and when?
• Do I have a termination clause that gives me an actual exit?

If you answered 'I'm not sure' to any of those, that is your answer. Your contract has a gap.

A contract that was good enough two years ago might not be good enough for the business you are running today. And a contract that was never quite right is not going to get better by itself.

Upgrade Your Contracts Before 30 June

The Foundd Legal template range includes lawyer-drafted contracts for service-based businesses, freelancers, designers, coaches, consultants, and more. Each one is written in plain English, compliant with Australian law, and built to cover the clauses that actually come up.

If your current contract has gaps in scope, payment, revisions, IP, or termination, or if you are still working from a free template you found online, this is the right time to fix it.

Until 30 June, you can take advantage of the Foundd Legal EOFY sale. Spend $150 or more and save 30%. Whether you are replacing a contract that has never quite done the job or filling in the gaps in what you already have, now is the time.

Browse the Foundd Legal contract templates and find the right one for your business.

SHOP THE EOFY SALE HERE

Because a contract with gaps is not protection. It is a problem you have not had yet.