Avoid surprises and misunderstandings by drafting a payment agreement for all the work you do. A payment agreement should identify both parties, explain the terms and conditions of payment and note how disputes will be handled.


Create a payment agreement template ahead of time and fill in the pertinent information each time you get a new client.

Basic Information

RocketLawyer notes that any business agreement should include basic identifying information. In the introductory section of the payment agreement, include:

  • The full legal name of the person who will make the payment
  • The full legal name of the person who will receive the payment
  • The date the agreement goes into effect

Services and Payment Terms

Write, in detail, what services and goods you're responsible for and the payments the other party is liable for. Nolo.com suggests that the body of payment include information like:

  • A description of what services and goods will be rendered.
  • Payment amount or rate: Note if the payment is a fixed fee, or if it will be an hourly rate. If work is paid on an hourly basis, record the hourly rate and any cap on hours for the project. 
  • Payment Schedule; for example, you may receive payments on a monthly basis, or you may receive the entire balance when the work is complete. List exact dates, timelines and conditions of payment.
  • Payment method: Detail whether payments can be made by check, credit card, cash or bank transfer.
  • Explain your policy on late fees or interest charges if payments aren't made on time.

If the project involves any expenses, note what the common expenses are and which party is responsible for them.

Agreement Disputes or Termination

Agreements don't always go as planned. Detail ways that each party can terminate the payment agreement, if need be. It's a good idea to note procedures and timelines. You could, for example, require the terminating party give 30 days notice if they want to end the work.

Also include information about how you'll resolve any disputes that arise. Note any kill fee that the other party must make if you want to back out and you've already begun the work. If disputes can be resolved by mediation, arbitration or a court of law, include this information. Also note which state laws govern the payment agreement.

Agreement Between the Parties

At the bottom of the document, designate a space for both parties to sign and date the payment agreement. Write that, by signing the document, both parties agree to the payment terms. Make a copy of the payment agreement, and sign two originals, so that both parties can keep it for their records.


You can create your own payment agreement for free at websites like PrintableContracts.com.