The Most Important Part of a Digital Agency Contract

It's best practice to vet any digital agency you plan to hire and work with. But the final decision should hinge on a single question: "What's your cancellation policy?" Why is this important? Unfortunately, all relationships, even the good ones end eventually. So you'd best be prepared for how that will go down when the time comes around.

by Drew Barton

News & Announcements

Reading Time | 4 min

It’s critical to vet any digital agency you’re considering hiring, but the final decision to work with the digital agency should hinge on a single question. If the agency does not answer it to your complete satisfaction, you should walk away and keep looking. Period. Ready? Here’s the question:

“What is your cancellation policy?”

That’s right. The most important question to ask any digital agency is effectively “What happens when we part ways? What happens when we break up?” Because you will break up.

Every relationship ends

In polite society, we avoid talking about when things will end, especially when your relationship is just beginning. But in reality, every relationship ends. Whether it’s a business relationship lasting a few years, or the happiest, longest lasting marriage you can think of, everyone is going to part ways at some point, whether through dissolution or death. You’re starting a new relationship with this digital agency; believe it or not, the healthiest way to do that is to talk about what happens when the relationship ends. Think of it as sort of a prenuptial agreement: when you break up (not if), who gets what? Granted, if you tried to start a romantic relationship this way—well, let’s just say you might want to plan on staying single for a while. But in a business relationship, it’s actually one of the best ways to preserve goodwill on both sides. If your digital agency is uncomfortable even broaching the subject, that’s a red flag.

The benefits of prior experience

An experienced professional agency will have had clients close their account in the past, and thus they will have a proven process by which the client leaves their agency. A good digital agency won’t evade the “what’s your cancellation policy?” question, because they realize many of the people seeking them out have already had to deal with breaking up a rocky relationship with another agency. If their answer is confident, cool, and assured, you know you’re dealing with a professional. They’ve ended relationships with other clients, and they’ve acted professionally. However, if they jokingly laugh off the question with a “Why would you ever want to leave us?” spiel, then be prepared for a messy breakup down the road. If they make inflated promises about how they’ll ensure you never want to leave and bend over backward to keep you, chances are you’re not dealing with a reputable agency. They might have good intentions, and there may be no scam involved, but when you choose to leave that company (again, not if, but when), it’s going to be a sticky situation because they don’t have a process in place. You’ll have to ride the learning curve with them should you ever decide to leave.

But what if the deal is really good otherwise?

Some deals may seem too good to pass up, so much so that you might be tempted to risk the messy breakup. If you’re willing to assume that risk, more power to you. I’m not saying you should automatically run away if the digital agency doesn’t have a set cancellation policy. All I’m saying is you need to be satisfied with the answer. Mark my words, you’ll get to put their policy to practice one day. If the cancellation policy isn’t clear but you trust them otherwise, you simply have to weigh the benefits against the risk, and be satisfied with your choice.

What should be included in a cancellation policy?

Optimally, when you ask the cancellation question, the digital agency should provide an initial response that puts you at ease — something like, “If you cancel with us, we’ll hand over our work product, and we’ll cooperate with your new digital agency to help make the transition seamless.” This is the best sort of answer you can hope for, because once again, it’s a signal that the agency has been around the block. Here are some questions to ask before entering the engagement, so you’ll know how the relationship will end:

  • What happens to the money already invested? Is there a full or partial or any refund?
  • How is a partial refund calculated? By time spent, or by milestones reached?
  • Can either side trigger a cancellation? If so, how?
  • Are there “exit points” — that is, specific points in the development process where cancellation can occur? And what, if any, penalty is there?
  • When we part ways, what becomes of the work, such as the design files and the website? Do the files belong to the agency, or can you take them with you?
  • What happens to the website if the digital agency gets bought or merges with another agency?
  • What happens to the website if the digital agency goes out of business? How do you access your files?

To sum it up — if you’re not aware of your digital agency’s cancellation policy, you could be putting yourself at risk.

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Drew Barton | President and Founder

Drew Barton is the President and Founder of SiteCare, LLC. For over two decades, Drew has helped thousands of businesses grow online. He is the author of the Buyer’s Guide to Websites, an Eagle Scout, and a Board Member of the Atlanta chapter of Entrepreneurs' Organization.