A contract for interior design services should lock down the scope of work, the fee structure and payment milestones, reimbursable expenses, procurement and sales tax handling, copyright in the drawings, change-order procedures, insurance and liability limits, termination rights, and how disputes get resolved. Each party’s full legal name and address, along with the address of the property where work will happen, belong at the top of the agreement so it is clear who is bound and where the designer’s responsibility applies.1U.S. Securities and Exchange Commission. SEC EDGAR – Exhibit 10.3 Standard Form of Agreement For Interior Design Services Getting these terms right before design work or purchasing begins prevents most of the disputes that derail projects later.
Scope of Services
Most contract fights come out of a vague scope. “Design the living room” is not enough. The scope should list specific deliverables: space planning with dimensioned floor plans, furniture layouts, color and material selections, lighting plans, procurement of furnishings, and oversight during installation. If the designer is not doing something, say so.
The contract should also draw the line at work that belongs to other licensed professionals. Interior designers are generally not responsible for structural engineering, building code compliance, or pulling permits; those tasks belong to a licensed architect or engineer. Naming that boundary in writing keeps a client from expecting permit-ready construction documents from a designer who never agreed to produce them.
Fees and Payment Schedule
The three common fee structures are hourly billing, a flat fee for the entire project, and a percentage of the total project budget. Hourly works well for smaller or loosely defined projects. Flat fees give the client cost certainty but shift the risk of scope creep to the designer. Percentage-based fees tie the designer’s compensation to the project’s scale, which can create an incentive to spend more on materials and furnishings.
Whichever you choose, state the exact rate or total fee, not a range. For hourly work, spell out whether travel time and phone calls are billable. For flat fees, tie the number to a defined scope so the designer can charge separately if the client adds rooms or changes direction mid-project.
Payment Milestones
Most full-service design contracts break the fee into milestones rather than billing everything at the end. A common structure:
- Contract signing, 20–25%, covering the initial consultation, site measurements, and mood boards.
- Concept approval, 20–25%, due when the designer presents the overall design direction, space plans, and material selections.
- Design development, 15–20%, covering detailed drawings, final furniture selections, and lighting plans.
- Procurement launch, 15–20%, due before the designer places purchase orders with vendors.
- Installation and closeout, 10–15%, due at or shortly after installation is complete.
Milestones protect both sides. The client does not pay the full amount before seeing results, and the designer does not carry months of unpaid work. Specify what triggers each payment and how many days the client has to pay after an invoice is sent.
Late Payment
The contract should say what happens when an invoice goes unpaid. One widely used standard form applies a 10% annual late charge compounded monthly on balances more than 45 days overdue and lets the designer stop work entirely while payment remains outstanding.1U.S. Securities and Exchange Commission. SEC EDGAR – Exhibit 10.3 Standard Form of Agreement For Interior Design Services Without a clause like this, a designer’s only recourse for late payment is collections or a lawsuit, both slower and more expensive than the leverage a well-drafted stop-work provision creates.
Reimbursable Expenses
Design fees cover the designer’s time and expertise. They rarely cover every out-of-pocket cost the project generates. List which expenses the client reimburses separately: shipping and freight (often the largest line item), printing and drafting services, travel and lodging for out-of-town projects, delivery charges, and storage fees for furniture awaiting installation. State whether the designer marks these up or passes them through at cost.
Procurement, Markups, and Sales Tax
When a designer buys furniture, fixtures, and materials on the client’s behalf, the contract needs to say who bears the financial risk during that process. AIA standard forms treat procurement of furniture, furnishings, and equipment as a separate agreement from the design services contract, governed by the Uniform Commercial Code rules for the sale of goods rather than the rules for professional services.2AIA Contract Documents. Interiors Family Even outside an AIA form, the procurement section should state whether the designer is acting as a purchasing agent (buying on the client’s behalf) or as a reseller (buying at wholesale and selling to the client at a markup).
That distinction has tax consequences. Designers who buy for resale typically obtain a state resale certificate that lets them purchase from vendors without paying sales tax at the time of purchase; they then collect sales tax from the client and remit it to the state. Rules vary from state to state, and some states tax design services themselves. The contract should specify who collects and pays sales tax, and whether any tax is included in or added on top of quoted prices.
If the designer charges a markup on goods, state the percentage. Common markups fall between 10% and 35% of the wholesale price, depending on business model and project size. Custom and trade-only vendors often require non-refundable deposits, and the contract should address who absorbs that cost if the client changes direction after an order is placed.
Copyright and Intellectual Property
Federal copyright law protects original works of authorship in eight categories, including pictorial and graphic works and architectural works.3Office of the Law Revision Counsel. 17 USC 102 – Subject Matter of Copyright In General A designer’s floor plans, renderings, and technical drawings are protectable as pictorial or graphic works. The U.S. Copyright Office has stated that copyright does not protect interior design itself, meaning the selection and placement of furniture, lighting, paint, and similar decorative choices.4U.S. Copyright Office. Circular 41 – Copyright Registration of Architectural Works The drawings and digital files are protected; the finished look of the room is not.
Because interior designers are typically independent contractors rather than employees, the default under federal law is that the designer owns the copyright in the drawings and plans they create. The hiring party owns the work only if it qualifies as a “work made for hire,” which for commissioned works requires both a written agreement and that the work fall into one of a handful of specific categories.5Office of the Law Revision Counsel. 17 USC 101 – Definitions Interior design drawings do not fit those categories, so absent a contract clause saying otherwise, the designer keeps ownership.6Office of the Law Revision Counsel. 17 USC 201 – Ownership of Copyright
Address this directly. Most agreements grant the client a limited license to use the drawings for the specific project at the designated property while the designer retains ownership of the underlying work. If the client wants to own the copyright outright, the contract needs a written assignment of rights, and designers reasonably charge extra for that transfer. Leaving this section blank invites a fight later.
Change Orders
No project survives without some changes, and the change-order clause is what keeps them from blowing up the budget or schedule. Every modification to the original scope should be documented in writing, signed by both parties, and should specify how the change affects cost and timeline. State whether the designer can proceed with changed work before the client signs the change order, or whether work pauses until the approval is in writing. A mid-project switch from stock cabinetry to custom-built pieces does not just change the price; it can push delivery dates back by months.
Insurance and Liability
Two types of insurance come up. Professional liability (also called errors and omissions) covers claims of negligence in the design work itself, such as measurement errors that delay a project or specifying unsuitable materials. General liability covers bodily injury and property damage, like a delivery crew damaging a client’s floor during installation.
Commercial clients and general contractors frequently require designers to carry specific coverage limits and to provide a certificate of insurance before work begins. Common limits are $1 million per occurrence and $2 million in aggregate, though high-value commercial projects sometimes demand more. Specify required coverage types, minimum limits, and whether the designer must name the client as an additional insured.
Indemnification and Liability Caps
The indemnification clause defines who bears responsibility for losses caused by each party’s mistakes. A narrowly drafted clause makes the designer responsible for losses arising from the designer’s own negligence. A broadly drafted clause could make the designer responsible for any loss connected to the project, including losses caused by the client’s decisions or a contractor’s errors. Designers should resist broad language because professional liability insurance typically excludes coverage for liabilities the designer assumed by contract that would not exist under ordinary negligence law.
Liability caps work alongside indemnification. Most design contracts cap the designer’s total financial exposure at the amount of their fee for the project.7AIA Contract Documents. Limitations of Liability in Construction Contracts Without a cap, a designer on a $30,000 contract could face a six-figure claim over a procurement error or a design choice that caused water damage. The cap does not eliminate liability; it sets a ceiling both parties agree to in advance.
Termination
Every design contract should explain how either party can walk away. Most agreements allow termination with written notice, commonly 15 to 30 days. On termination, the client typically owes payment for all services rendered and expenses incurred through the cancellation date, and the designer delivers whatever work product has been completed.
The harder question is what happens to third-party commitments. If the designer has placed orders with vendors or engaged subcontractors, the contract should say who is responsible for those obligations after termination. Non-refundable deposits on custom furniture, restocking fees on cancelled orders, and contractor cancellation charges all need a home in writing. A termination-for-cause provision, covering situations like a designer abandoning the project or a client refusing to pay, should also specify whether different financial terms apply than a no-fault termination.
Dispute Resolution
The contract should specify how disagreements get resolved before anyone ends up in court. The two main alternatives are mediation, where a neutral third party helps both sides reach a voluntary agreement, and arbitration, where a neutral decision-maker issues a binding ruling. Many design contracts require mediation first and arbitration if mediation fails.
Arbitration is faster and less expensive than a courtroom trial, and the proceedings stay private, which matters when the dispute involves a client’s home. The tradeoff is that arbitration decisions are difficult to appeal, and arbitrators may lack authority to issue certain types of relief, such as ordering a party to stop specific conduct. Name the administering organization, such as the American Arbitration Association, specify how many arbitrators will hear the dispute, and identify which state’s law governs the agreement. A savings clause preserving the right to seek emergency court orders while arbitration is pending is worth including.
Confidentiality and Photography Rights
Designers often gain access to sensitive information about a client’s finances, daily routines, security systems, and personal preferences. A confidentiality clause obligates the designer and their team to keep this information private and to use it only for the project. Standard form agreements typically bar the designer from sharing client information with any third party without prior written consent, except where disclosure is required by law.1U.S. Securities and Exchange Commission. SEC EDGAR – Exhibit 10.3 Standard Form of Agreement For Interior Design Services
Photography rights pull the other way. Designers rely on portfolio images of completed projects to attract new clients, and many contracts grant the designer the right to photograph the finished space and use those images in marketing, social media, and publications. Some clients, particularly those with high-profile residences, will want to limit or prohibit publication. A common compromise grants photography rights but requires the client’s written consent before images are published, or lets the client opt out of publication entirely.
Signing the Agreement
Under federal law, an electronic signature carries the same legal weight as a handwritten one for any transaction in interstate commerce, and a contract cannot be denied enforceability solely because it was signed electronically.8Office of the Law Revision Counsel. 15 USC 7001 – General Rule of Validity Electronic signature platforms provide a timestamped audit trail showing when each party signed, which can be valuable evidence if the signing itself is ever disputed.9Adobe. Electronic Signature Laws and Regulations – United States Interior design agreements do not generally require notarization.
Once both parties sign, the contract is binding, but most agreements tie the start of work to receipt of the initial deposit. Until that first milestone payment clears, the designer has no obligation to begin. Keep a fully executed copy with all attachments, including scope exhibits, fee schedules, and insurance certificates referenced in the agreement. Attachments referenced but not physically included are a common source of confusion months later, when no one can agree on what was attached at signing.