Featured on this episode:

• Grab Your Free Script Guide here
• Access the full video interview with Elana Steele of Steele Appliance here

What you will learn from this episode:

• Why a good contract isn’t enough to prevent every client dispute.
• How clear scopes, payment terms, and communication help protect your business.
• Why strong client relationships and consistent processes matter just as much as legal language.

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I recently welcomed my friend Wendy Estela back to the podcast, and there was a very good reason I wanted to continue our conversation.

Wendy is the founder of Estela Law and Designed Counsel™, a contract template and subscription service created specifically for interior designers. With 25 years of experience in business law, she works with designers at every stage of their careers, from those just starting out to AD100 and Elle Decor A-List professionals.

What I appreciate about Wendy is that she understands our industry. She doesn’t just look at the legal language. She understands the relationships, financial realities, and everyday decisions that can make or break a design business.

When she joined me for Episode 276, we talked about what belongs in a solid interior design contract and why designers need that protection in the first place.

But here’s the thing. Even the best contract in the world cannot guarantee that a project will go smoothly.

Clients can become difficult. Contractors can overstep. Scope creep happens. And sometimes, despite doing everything you thought you were supposed to do, you find yourself in a situation you never anticipated.

So this time, I wanted to talk about what happens when things go wrong anyway.

And one of the biggest takeaways from our conversation was that protecting your business involves a lot more than having a good contract.

Your Interior Design Contract Is Only One Part of the Protection

Wendy opened our conversation with a story about a designer who told her she didn’t use contracts because she did business with a hug.

Now, I certainly wouldn’t recommend that approach, and neither would Wendy. But she made an interesting point.

That designer clearly understood how to build relationships with her clients. And while relationships don’t replace contracts, they can make a tremendous difference when something goes wrong.

As Wendy explained:

“It’s the relationship building, it’s the contract, it’s the insurance, and it’s running the solid business with the contract being a part of it.”

I think that’s such an important distinction.

You never want to reach a point where your only response to an unhappy client is to pull out your contract and point to a paragraph that says you’re right.

Of course, you need those protections. But ideally, you’ve established enough trust and communication that you can have a productive conversation before the situation reaches that point.

I’ve become much more selective about the clients I work with for this very reason. I take my time during discovery, ask questions, develop the scope of work, and pay attention to how we communicate.

Because if we can’t establish a good working relationship at the beginning, how are we going to manage things when the project gets difficult? And believe me, every project has difficult moments.

Your Contract Should Reflect How You Actually Run Your Business

Here’s something I’m happy to admit.

For years, my contracts weren’t particularly good.

They were a few pages long, and I’d pieced them together from contracts I’d seen other designers use. I’d update the client’s name, address, and project details, then move on. I wasn’t reading every word each time.

When I finally started reviewing my contracts more carefully, I discovered two things. Some important protections were missing, and I’d agreed to responsibilities I hadn’t even realized were in there. That’s a problem.

Wendy emphasized that having a contract is not enough if you aren’t following the procedures you’ve agreed to.

If your contract says you’ll invoice a certain way, you need to do that. If additional work requires approval before you begin, you need to get that approval.

You can’t ignore those requirements and expect the contract to protect you when a disagreement arises.

One of Wendy’s suggestions was to go through your contract and identify everything you’ve promised to do.

I think that’s an excellent exercise. Don’t just focus on what the client is required to do. Look at your own obligations. Are you actually following them? Do your internal processes support them? And does the contract accurately describe the way you work today?

If not, that’s something to address before your next project.

Don’t Assume Your Client Understands the Contract

This part of our conversation really resonated with me because I do something that some designers might find intimidating.

I walk my clients through my contract.

It’s a page-by-page conversation, and I explain what the different provisions mean for the way we’ll work together.

I once did this with a client who was a corporate litigator. I was absolutely sweating bullets. But at the end, she told me I’d done a good job.

Wendy made an excellent point about why these conversations matter. A client may receive a lengthy contract, but that doesn’t mean they’ve read it or understood how your business operates.

She suggested creating a frequently asked questions document to explain the reasoning behind important contract provisions.

Why do you collect money in advance? How does your pricing work? What happens when the scope changes?

These are questions your client may have, even if they never ask them directly. A contract can outline the terms of your relationship, but it cannot replace a conversation about expectations. And those expectations need to be clear long before a disagreement develops.

Scope of Work Is Where So Many Problems Begin

You know I talk about scope of work all the time. There’s a reason for that. When designers and clients have different ideas about what’s included, the potential for conflict grows quickly.

A client may think you’re responsible for coordinating something that you never intended to manage. A contractor may start asking you to take on responsibilities that belong to someone else.

And if the scope isn’t clear, those assumptions can become very difficult to untangle.

Wendy and I talked about how important it is to define responsibilities and explain them in language the client understands.

It’s not enough to say that you’re providing design services or construction management support. What does that actually mean? What are you doing? What is the contractor doing? What decisions belong to the homeowner? And what happens when someone asks you to do something outside the agreed scope?

The more clearly you establish those boundaries, the easier it becomes to recognize when a request requires an additional conversation or fee.

This is also why I believe a thorough discovery process is so valuable. It gives you an opportunity to understand what the client expects before you agree to provide it.

A Good Contract Doesn’t Make You Bulletproof

One of the most important things Wendy said was that designers need to stop thinking there’s such a thing as a contract that eliminates every possible risk.

She hears from designers who want a bulletproof contract. But even a strong agreement doesn’t prevent someone from making accusations, filing a complaint, or starting a dispute.

As Wendy put it:

“You can always get sued. Always get sued.”

That’s not meant to frighten you. It’s meant to remind you that legal protection and preventing a dispute are two different things.

Your contract is important. Insurance is important. So are documentation, communication, and the way you conduct business every day.

Wendy also talked about how disputes can become expensive and emotionally draining, even when a designer believes they’re in the right.

Sometimes the question isn’t simply whether you can fight. It’s whether fighting makes sense for your business.

Sometimes Walking Away Is the Better Business Decision

I shared a situation involving a former client who refused to pay the remaining balance on some very expensive custom drapery.

I was furious. It wasn’t that she couldn’t afford to pay. She simply wasn’t going to. I spoke with Wendy about my options, and of course, there were legal steps I could have taken. But pursuing the money would have required more time, more expense, and more energy. At some point, I had to decide whether recovering that balance was worth everything it would take to pursue it.

And I decided it wasn’t.

That doesn’t mean the client was right. It doesn’t mean I was happy about losing the money. It means I made a business decision.

Wendy’s advice about payment practices also reinforced something I’ve changed in my own business: collecting the appropriate money in advance rather than putting myself in a position where I’m trying to recover it after the work is complete.

That’s a much better conversation to have before a project begins than after a client decides not to pay.

The Best Protection Starts Before the Contract Is Signed

Toward the end of our conversation, we came back to something I believe very strongly.

You have to explain how you work before your client has already formed a completely different set of expectations.

That includes your fees, your responsibilities, the purchasing process, and the limits of your services.

Your marketing materials may be beautiful. Your presentations may be polished. And you absolutely want clients to feel excited about working with you.

But the business relationship needs to be just as clear as the creative vision.

If you’ve spent weeks leading someone to believe you’ll handle everything, save them money, and make every problem disappear, a contract at the end of that process may not undo those expectations.

This is why I don’t rush through discovery anymore. I’m learning about the project, but I’m also learning about the person.

Are we a good fit? Do they understand what I do? Are they comfortable with how I charge? Can we communicate honestly when something doesn’t go as planned?

Those questions matter every bit as much as the legal language.

And I think that’s what I want you to remember from this conversation with Wendy.

A strong interior design contract is essential, but it cannot replace the work of running a strong design business.

Read your contract. Understand what you’ve promised. Establish clear scopes, explain your fees, document changes, and build relationships with the people you work with.

Most importantly, don’t wait until a project goes sideways to discover where your business is vulnerable.

Because the goal isn’t to win every disagreement.

It’s to build a business where you’re less likely to find yourself in one in the first place.

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Like this Episode?

Be sure to check out Episode #276: What Interior Designers Don’t Know About Contracts (But Should) with Wendy Estela

Be sure to check out Episode #291: How to Handle a Difficult Interior Design Client And When to Walk Away

Be sure to check out Episode #270: Client Red Flags in Interior Design: I Knew the Signs — And Took the Job Anyway