A contract protects both the designer and the client by spelling out the specifics of a project, estimated costs, responsibilities, usage rights and an approximation of the outside expenses. Expenses such as photography, illustration, proofs, scans, couriers, materials, etc. are not fixed prices and are normally billed as needed. Any mark-up charges would also be noted on the contract. Other additional costs include author's alterations (AAs), which cover changes made by the client to the project above and beyond the time budgeted in the estimate. In many cases a prepayment of one-third to one-half of the total estimate is required. The contract should also indicate at which point invoices will be submitted and the time frame for payment.

A critical part of the contract designates who retains copyright, or ownership of the final design. Legally, the designer owns the copyright and usage is purchased only for the project specified on the designer's contract. Upon receipt of the final payment, the client is entitled to receive mechanical art, or a postscript (non-application) version of a digital file which can be output but not altered. Understand that purchasing a specific design does not include every variation of that design, unlimited usage must be negotiated up front (a functional digital file, including color and paper specifications) by requesting a "buy-out" of the format. This means the designer agrees to release all rights to the client or company who commissioned the work, including the right to alter, add to, or reproduce a design, using the same format, without additional charges or legal ramifications. In most cases, the agreement to release all rights goes into effect at the time final payment is made. When dealing with illustrations or photos included in the file, specific usage rights must be purchased as well.

For more information about the terms of a typical contract,
see Code of Fair Practice and Trade Customs.

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